Lindblom - The Market System - Afghan Journalists' Committee

Inefficiencies 149Enterprises impose an even wider variety of spilloverburdens than those that economic theory identifies as externalities.They impose, for example, burdens of bankruptcyon an enterprise whose customers have abandoned itin favor of a new competitor; burdens are then also visitedon employees and suppliers of the bankrupt enterprise.That everyone weighs benefits and costs almost exclusivelyfor self or family blows an enormous hole in argumentsfor market-system efficiency. Taking account of theuniversality of spillover burdens, it does not seem thatmuch can be said for the efficiency of market systems exceptin comparison with even less efficient systems.Can we believe the once-dominant opinion—still stronglyheld in some quarters—that spillovers are unusual, thatmarket transactions typically have little effect on personsnot party to the transaction? I do not believe there ever wasa market society in which that might have been true. In anycase the great energy-using technologies of our era commonlyproduce widespread spillover effects. Mines blightlandscapes, high-rises block sun and view, boom boxes andpower lawn mowers destroy tranquility, and autos bringwith them congestion, stress, and death.Of course, people who do not like the fumes from a factorychimney or the racket of a neighbor’s lawn mower canmove to a new location. They must nevertheless carry theburden or cost of moving, even if it turns out that they liketheir new locations as well as the old.Some people deprecate the significance of spillover burdensby claiming that, common as they may be, they representlosses of values of small intangibles, unlike the importantsolid values for which we are willing to pay poundsor rupees. The values we lose through spillover costs are