Lindblom - The Market System - Afghan Journalists' Committee

Inefficiencies 163taxes, transfer payments, and other methods, any existingmarket society can significantly reduce or restructure inequalityif its people or rulers wish to do so. For these reasons,the inequalities of existing market systems do notconstitute a reason for abandoning it.Is inequality inefficient? Or does it pose, as many economistspropose, only a problem of equity or justice, not oneof efficiency? Efficiency, it will be remembered, turns onthe relation of valued output to valued inputs. If the valuedresult of social organization is taken to be a collectivevalue, such as “the good society,” then inequality is an efficiencyproblem. Or, looking at the market system as amethod of allocating Earth’s and society’s resources for thebenefit of humankind, one can indeed question whether ahigh degree of inequality is an efficient allocation. Consideringthe poverty of much of the world and the affluence ofparts of it, one may reasonably ask whether the market systemis efficient to leave so many in squalor.Either way, though, whether inequality is viewed as anequity problem or an efficiency problem, some people arenot disturbed by it. Others are frightened by the slow historicalmovements of societies away from it—they like inequalityand would prefer to hang on to it. Others regret inequalitybut believe it necessary for incentives and at leaston that score efficient. On the other side, many people—accordingto survey research, great majorities in many societies—wantto go on reducing inequalities. Of these, manydo not think abstractly about patterns of distribution butwant to reduce specific ills of inequality, such as obstructionsto education, inadequate medical care, or the incomeinsecurity of the aged.Considering inequality either abstractly or with referenceto specific social ills, no one can persuasively declare