Lindblom - The Market System - Afghan Journalists' Committee

270 Thinking About Choicesacknowledging that it is a major instrument of governmentalcentral planning; and we can greatly advance our understandingof the market system if we see in a little more detailhow market-system planning contrasts with older ormore conventional concepts of planning.For production destined not for sale or other distributionto millions of individuals or families but for collectivepurposes—research, recruiting a military force, buildinghighways, and the like—decision makers or planners in amarket system enter into markets to buy what they havedecided needs to be produced. Unlike planners in a nonmarketsystem, they do not command, do not set productiontargets, do not assign inputs. They buy rather than commandthe goods and services they want. Efficiency pricestell them the cost of every choice they contemplate. Andbuying rather than commanding permits them to implementtheir decisions not through the coercion of commandsbut through the inducements of purchase.For production destined, on the other hand, to be distributedto millions of consumers—food, housing, entertainment,and the like—market-system planning takes a differentturn. We could imagine decision makers again simplybuying production in the amount they think needed (andthen selling it off to consumers, who for each product can intotal have only what the planners have decided on). But wehave seen that a much simpler method—and the one actuallypracticed in all market systems—is that decision makersraise the price paid to suppliers of a service or good forwhich they wish to increase production, and lower the pricepaid when they wish to decrease production. The formerthey do with a subsidy; the latter with a tax. Thus with asubsidy they increase the availability of housing or with atax decrease the production of automobiles.