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The Political Economy of the Environment

In the “Market System: What It Is, How It Works, and What to Make of It,” Charles Lindblom

defines the market system as a “system of societywide coordination of human activities not by

central command but by mutual interactions in the forms of transactions” (Lindblom 2001; p. 4).

Such system of social coordination functions “with a range and a precision beyond that of any

other system, institution, or social process” (Lindblom 2001; p. 14). Lindblom aims to better and

further our understanding of the market system – in the process, exploring its mechanism,

efficiency, historical connection with democracy and freedom, and social reach. Critically,

undoubtedly. through his assessment of the market efficiency.” and pose the very real possibility of “impoverish[ing] or bring[ing] an end to human life on Earth” (Lindblom 2001. in terms of air pollution. it conceives 1 Lindblom 2001. as it is not incurred by the participating parties. p. to be incurred by the society as a whole and not by those profiting off such business. p. 14). and limited efficiency. prior determination. 2 Lindblom aims to scrutinize the discriminating processes of the market system. Efficiency is defined through “the relation of valued output to valued inputs” (Lindblom 2001. The spillover effect of industries. Lindblom summarizes his overarching thesis as one which aims to determine the “place for the market system in the future of any society” (Lindblom 2001. Such spillover inefficiencies are enormous. Market system inherently encourages evaluation of “valued output” in narrow terms of personal gains/profits. elite control. and relationship with democracy. elite control. hostility towards popular democracy. p. which have reached “critical magnitude. While the market system disregards the spillover cost as irrelevant in terms of calculating efficiency. dispassionate in his analysis of the market system. that Lindblom constructs a case against the market system. 163). is rendered as an externality. 148).1 Lindblom is. Efficiency Externalities or spillovers are costs or benefits that affects those parties that did not choose to bear such costs/benefits of the transaction. but it is clear. I argue that the central thesis driving The Market System is the undermining of the “political phenomenon” of popular consensus in favor of the market system. Therefore. p. 12 . such narrow conception of “valued inputs/output” results in short- sighted appraisal of the market’s efficiency. for instance.

2 Large corporations and enterprises have become indispensable for the economies of most democracies. and morality. p. bioethics. and subsequently. through mechanisms of prior determination. Since the allocation of skills and resources are not weighed against considerations of efficiency. Democracy The Market System assumes a specific conception of a liberal and popular democracy. Prior Determination Lindblom assesses the market’s claim to efficiency through what he calls as the “prior determination” problem. wielding enormous influence over the political elites. often divorced from the interests of the “masses. Lindblom pits this version of democracy and popular control against the market system. The market is inherently dependent on the society’s underlying distribution of skills which are historically determined and regulated through custom and law. Such prior determinations are shaped through “historical accidents and by laws governing inheritance” (Lindblom 2001. it subverts market’s claim to meritocracy and democracy’s commitment to justice and equality. p. The pattern of outputs in any market system is a result of both “the market transactions and the prior determinations taken together” (Lindblom 2001. 172). provides the “dance floor” for the market’s dance. the 2 Lindblom 2001. 42 .” The state. Lindblom argues that the elected representatives of the state and the managerial elite of large enterprises and corporations. thus. 3 economic interests solely in terms of short-term monetary gains. while undermining important values adhering to justice. in effect. property rights. and monetary system. physical infrastructure. p. it is important to identify it as a working assumption of Lindblom’s argument. While the assumption is not problematic. exercise political power. Moreover. it undermines market’s claim to efficiency and perpetuates a system of historical injustices and inequalities. 171).

The vertical framework of communication naturalizes the values of the market system among the masses. then any significant economic inequality among citizens is an 3 Lindblom 2001. 220). p. the supporting beliefs of a market system” (Lindblom 2001. The practical manifestation of such a system results in an “assault on the mind” of the public where distraction and obfuscation form the largely unilateral communication from the elites to the masses. 233). Lindblom views it as a systematic subversion of “respect for truth or honesty long argued to be a requirement of civilized society” (Lindblom 2001. The status quo is conceived of as one benefiting all among the masses through deliberate propaganda. Such a position “enables them to extract from the state a variety of benefits. Such “assault on the mind. or. 213). p. elite stewardship of society. hierarchy. p. contributes towards the historical connection between the market system and democracy. Lindblom views market system as enabling minimal democracy. but it “consequently began and still persist in a deliberate “education” of the masses on the virtues of private property. in short. p. 234). The privileged position is further enhanced and sustained through the ownership of newspapers and broadcasting stations by the market elites. by definition. often at great cost to everyone else” (Lindblom 2001. and in effect. p.” Lindblom argues. The central thesis of Lindblom’s argument culminates when he states that “If genuine democracy requires. 63). private enterprise. with the “intention to control” (Lindblom 2001. shaping and even controlling their market choices. 4 masses. at least a rough equality of political influence or power among citizens in their attempts to control elites. protect and further their entrenched interests through “teaching mass allegiance to the market system” (Lindblom 2001. inequality. 230 .3 Both the political and market elites function to perpetuate the status quo. p.

In the U. 178 6 Lindblom 2001. is heavily influenced by market values.S. Lindblom’s central concern is the naturalization of market-system or capitalist values among the masses and its inherent conflict with values of democracy. p. The market’s gross inefficiency emanating from the prior determination problem and massive spillover effects contributes towards economic inequality in the society. The system rests on a foundation created by historical injustices and thefts (e. in the Manufacturing Consent by Noam Chomsky and Edward Herman. The hegemonic control over the vertical nature of communication in contemporary democratic societies entrench their narrow market values as the natural values of democracy. and opinions expressed are all serve to perpetuate the state ideology. largely. p. and morality. Moreover. the authors. bioethics.6 The interests of 4 Lutz. it is evident through facts.g. equality. while aggravating such inequalities by transferring the spillover costs to the masses. such interests. through case studies. only 6 corporations own 90% of all media outlets.4 Such concentration of ownership demonstrates Lindblom’s argument that market elites have structured a vertical framework of information and communication. 5 obstruction to democracy” (Lindblom 2001. which in Lindblom’s conception. colonialism). p. justice.5 The idea is that the “assault on the mind” of the masses is the only reason sufficiently explaining the fact that historically. The choice of topics and issues featured in the media.. While Lindblom does not offer quantitative evidence in support of his claim. (2012) 5 McGilvray 2014. Assessment One of the main claims of Lindblom’s argument is the “assault on the mind” of the masses by government and market elites through ownership of newspaper and broadcasting stations. Therefore. no democracy has existed without the market system. argue that mainstream media is corporate owned and reflects. A. 232 . 236). its premises.

Democracies such as Sweden have pursued redistributionist policies. fails to explain the uniformity of experiences of diverse forms of democracies with the market system. contradicting the capitalist ethos. This is not to argue that once established. It was the people who insisted on “bigness” long before the propaganda began. . It. Therefore. If so. and economies have all been historically tied with the market system. While I find this point convincing. as expressed in the previous paragraph. Democracies with varying history. The rise of the market system is due in large part to the active participation of the masses. assuming that socialization is a time-consuming process. how did every democracy remain tied to a system until that threshold was reached. 289). 6 the elites are too entrenched in the status quo to allow considerations of any alternatives. The naturalization of such values are bound to hold strongly in some cases than in others. without exception. I also think it employs circular logic. diversity. “renouncing the older virtues of personal autonomy and responsibility intrinsic to an economy of small firms in favor of the vast material wealth produced by big ones” (Adelstein 2002. the “assault on the mind” plays a crucial role in perpetuating the system. it implies that socialization has been achieved at least to the threshold in all democracies where any alternatives to it are deemed “unnatural” and antithetical to democracy. however. Not all cases of socialization in to market values are equal.

Business Insider. in-america-2012-6?IR=T . Lutz. Review of the book Market System: What It Is. How It Works. how it works. C. Constitutional Political Economy. 7 References Adelstein. E. by Charles E. and What to Make of It. 287-292. R. A. New Haven: Yale University Press. 13. Lindblom. (2012) These 6 Corporations Control 90% Of The Media In America. Retrieved from http://www. The market system: What it is. (2002). (2001).businessinsider. and what to make of it.

(2014). UK: Polity Press. 8 McGilvray. . politics. mind. Cambridge. J. A. Chomsky: Language.