Lindblom - The Market System - Afghan Journalists' Committee

168 What To Make of ItAnother common overstated claim is that the marketsystem is efficient because it responds to popular preferencesregarding allocations. The fact is that at best it respondsonly to such preferences as can be expressed by voluntaryoffers of skills and assets. Change the allocation ofskills and assets, and the preferences to which the marketresponds will change correspondingly. A new and higherevaluation of, say, educational services in a market systemdoes not necessarily mean that participants have reconsideredthe value of education; it may mean only that assetshave been compulsorily redistributed. Again, the limitedcapacity of the market system disproves the broad efficiencyclaim.There has grown up around market systems an ideologythat declares compulsory allocations undesirable in anycase, hence the market system is deemed actually efficientbecause of its incapacity to compel. But as became apparentin Chapter 6, societies cannot survive and prosper withouta broad range of compulsions. They need taxation, of course.They also need such compulsions as are implicit in procedureslike elections, which compel outvoted minorities toaccept the decisions of the winners.Market systems not only fail to achieve compulsory allocationsnecessary to efficiency, but their existence obstructsthe efficient use of such other mechanisms as thestate. The taxes necessary for an efficient allocation of resources—toeducation or public health, say—will often actas a disincentive to tax-paying entrepreneurs. Entrepreneurshotly declare that environmental legislation will discouragenew investment, or even drive some enterprisesinto bankruptcy. Historically they have brought the sameobjection to government regulation of child labor, workhours, occupational safety, and against every other exten-