Lindblom - The Market System - Afghan Journalists' Committee

Necessary to Democracy? 229market system—perhaps it does not—but why no societyhas tried democracy while dispensing with the market system.The wave of socialization of key industries in WesternEurope immediately after World War II was not an abandonmentof market system but a move from private to publicenterprise, the enterprises remaining firmly fixed in market-systembuying and selling. Governments have of coursealtered the domain of the market in tax policy, social insurance,and regulation of business, for example. French “indicativeplanning” of a few decades ago and the detail ofItalian government regulation of business today representsome movement away from the market system. So also didIndia’s succession of five-year plans, though the plans werelargely targets for government investment only. No democracyhas ventured into any displacement of the market systemgreater than its occasional partial displacement bywartime economic mobilization.How is it possible that no democratic state has tried—oreven tried and failed—to dispense with the market system?One would expect two hundred years of history to reveal atleast one wise or foolish democratic attempt, even if aborted,to end the market system. Market critics offered powerfularguments for doing so—not only Marxists but democraticsocialists like the English Fabians. Repeated depressionsstimulated debate on alternatives. The catastrophic severityof the Great Depression of the 1930s might have beenexpected somewhere in the world to stimulate a democraticgovernment to try central planning in that period of anguish.Even if we believe that it would have been an excessiverisk or a mistake for any nation to have abandoned it, wemust wonder why no democratic nation ever took such arisk or made such a mistake. For nations—even democratic