Lindblom - The Market System - Afghan Journalists' Committee

Market-System Efficiency 143Motivational EfficiencyIf efficiency requires, first, that choosers ascertain costs andcompare them with value received, it then requires thatchoosers are motivated to collect and act on that information.Here then is the second great and distinctive efficiencyclaim about the market system: its motivations forall market participants. Especially important, however, areits extraordinary motivations for entrepreneurs, who aremoved to undertake massive projects, at an extreme thecreation of entire new industries, as by the Rothschilds, theKrupps, and Gates.Informed by efficiency prices, participants are powerfullymotivated to act because they gain contingent specificbenefits from doing so. A rule of quid pro quo, whatever itsinequities and harshness, is a powerful motivator, admittedlynot of all kinds of performances, but of market performances.Compare the rule with the usual alternative, motivationby command, the deficiencies of which are oftenobvious. Commands frequently offend and motivate peopleto evade. They do not so immediately tap motivations ofself-interest as do the motivations of the market system.Familiar as we are with market motivation, I want tomention several aspects of it. It does what motivationthrough altruism or good will, even at their strongest, cannotdo. To achieve efficiency, it is not enough to motivate peopleto love their neighbors, do good, or work hard. For social cooperation,incentive systems have to draw people into specificassignments, like welding or managing a janitorial crew.Even under the most favorable circumstances, altruism cannotmotivate an allocation of energies to a required variety ofdifferent tasks. Market incentives can and do draw people toeach of the innumerable tasks to be done in any society.