Lindblom - The Market System - Afghan Journalists' Committee

158 What To Make of Itcompetition by limiting the number of competing enterpriseslicensed to do business. Or it allows the regulation ofpublic utility prices, as for water or electricity, to slide intocorruption by industry influence. On the whole, althoughthe state on some points curbs monopoly, it is in many respectsmonopoly’s great friend.Broadly speaking, monopoly includes practices otherthan selling at a controlled price, practices that may accountfor more inefficiency than those of conventional monopoly.An enterprise negotiates with a municipality, regionalauthority, or nation-state, offering to establish, say, afactory. In return for tax concessions or other subsidies, itpromises to open up new jobs in the area. The corporationcan play one municipality or nation against another, inducingthem to compete in order to attract the enterprise. Euro-Disneyland was the recipient of French subsidies, local andnational, estimated to be the equivalent to $1 billion, paidto attract it to Paris. Poor small nations not only offer subsidiesto attract corporations from overseas but also have tobend or rewrite their laws to win them. In effect, an offeringenterprise “sells” job opportunities to a community at aprice, in the form of a subsidy. Studies of negotiations ofthis kind show a general pattern: the community pays ahigh price for each promised job—in one study of them,$70,000 per job, as it turned out—and often the jobs paid fordo not in fact materialize.Monopoly aside, governments make prices arbitrary insmall or large degree through explicit price fixing undertakenfor various purposes. As noted, developing countriessometimes force down food prices because they are fearfulof urban unrest, which sometimes flares into riots. Or governmentsanywhere may impose price ceilings to curb in-