Lindblom - The Market System - Afghan Journalists' Committee

Enterprise and Corporation 83most, state-owned enterprises fall into the first group, as dosome conventional corporations. They are notorious forcalling on public funds to save themselves and their employeesfrom the consequences of their own managerialerrors. China is burdened with sick enterprises kept aliveby governmental funds for fear of the unemployment thatwould follow if each had to stand on its own feet. In theother category, do not look for industries that are neverbailed out—there are none. But there are many enterprisesfor which bailout is infrequent or even rare, not easy to win,and uncertain. Some state-owned corporations and manyconventional corporations fall into this category. The significanceof the first category, about which more is to besaid later, is worth some speculation at this juncture. Forthe existence and persistence of ostensibly private enterprisesin the first category undermine the common distinctionbetween the market-oriented enterprise and the centrallyplanned one.One last reminder. Enterprise outputs and prices areproximately decided by human beings, often in tough negotiationswith each other; they do not simply emerge from“market forces.” Such forces do indeed both push and constrain.But what are they? When an enterprise sets a price ornegotiates a wage with a union, the influences that bear onit, although often conceived of as abstract “market forces,”are, if spelled out, in fact the activities of all other marketparticipants. This is to recognize once more that the marketsystem is a system of human behavior, not wholly understandablein any other terms.