Lindblom - The Market System - Afghan Journalists' Committee

Enterprise and Corporation 63“relations of reciprocity, altruism, friendship, reputation,and collaboration as principles of governance.”Corporations not only proximately control a society’sflow of the performances and objects that you and I wantbut also control great cumulations of whatever it takes tomake them available: land and capital, and a labor force.Custom and law permit corporations to acquire massivefunds with which to buy or hire these resources. Throughbank loans, issued stocks or bonds, and other forms ofcredit, corporations control aggregates of capital that theycould not own outright with their own wealth and income.The state often steps in to curb corporate market power,another reminder that the market system is always mixedwith other social institutions and processes. In our time,the market system is heavily and constantly regulated.Whether the state will curb the corporation’s market powerdepends on the political system, in which the corporation isa steady and powerful participant. In many circumstancesthe outcome turns out to be state support rather than a curbon corporate market power, as when the state imposes importrestrictions to protect the monopoly powers of a domesticcorporation.As everyone knows, whether they think about it or not,entrepreneurs and enterprises, especially corporations, exercisepolitical power beyond the capacity of ordinary citizens.Their power in government not only broadly distortsdemocracy, it also enables them to extract from the state avariety of benefits, often at great cost to everyone else: forexample, financial bailouts that protect executives, stockholders,lenders, and creditors from losses deriving frommismanagement. Common as such extractions are all overthe globe, they are unlikely to reach the magnitude of theAmerican bailout in the 1980s of the savings-and-loan