The Market System: What It Is, How It Works and What to Make of It

The Institution for Social and Policy Studies

by Charles E. Lindblom

In the wake of the collapse of communism, we hear much about the victory of the 'market system'. Just what is the market system? This clear and accessible book begins by answering this question, then goes on to explain how the market system works and what it can and cannot do. Charles E. Lindblom, writing in nontechnical language for a wide general audience, offers an evenhanded view of the market system. His analysis of the great questions that surround the market system is sometimes unexpected, always Is the market system efficient? Is it democratic? Does it despoil the environment? Does it perpetuate inequalities? Does it debase personality and culture? Big choices are yet to be made about the future of the market system, observes Lindblom. He outlines what these choices are and how they will affect not only our economic well-being but also our social and political lives. For market systems organise or coordinate more than just the flow of commodities, he shows. They influence human behaviour in all its dimensions.

Genres: Economics, Politics, Nonfiction, Sociology, Public Policy, Finance, Political Science

296 pages, Kindle Edition

First published March 1, 2001

Reviews

[Jamil · Rating 4 out of 5]

While I have not finished just yet, I think this book would be good as an introductory text. There is no doubt that "market fetishism" is a serious problem and for many Lindblom will be palatable because he begins by extolling and marveling at the level of "social coordination" that the market brings to society. I'm sure people will also get the impression that we be reduced to the state of barbarians without the markets in his more transhistorical sense, but Lindblom is careful in avoiding this tendency in some ways. First, Lindblom correctly notes that the system of market exchange does coordinate (in a sense) many millions more people in one unified system than other system in history. Second, as the book proceeds, Lindblom continually adds layers of historical detail, creating complication after complication—often creating more confusion than clarification.

Despite the fact that the book is getting more historical as i read on (at page 100 now), my main concern is Lindblom's tendency to universalize capitalism via description of the market, which, we are told, has no purpose. "It is a mindless and purposeless social system the accomplishes the great tasks of social cooperation" (40). Technically speaking, in the course of history no "mode of production," to use a Marxist phrase, has been consciously planned or designed. However, it is unlikely that Lindblom would deny the fact that that specific classes have exerted inordinate influence over each mode of production, shaping it to their needs and benefit. In other words, a "pure" market system does not exist; it is simply an ideal type. This can be useful for expository purposes but as indicated above, may eventually lead to more confusion.

That said, flashes of brilliant insight are not hard to find and I expect many more as I read on. For example, Lindblom points out that the central organizing institution in capitalist society is the firm. Inside of the firm, the decentralized and dispersed force of the market is replaced by the organizing principles of hierarchy, command, and control. "It is," in Lindblom's words, "a nonmarket or anti-market institution, though lodged within a market system.… To that extent—and it is a great extent—corporate coordination is a rival to rather than an instrument of market-system coordination" (75; emphasis added). Indeed, Marx was the first to venture beyond the sign posted at the gates of private property, warning "no admittance, except on business". And this one of the many reasons why his work is still so important today.

[Zo · Rating 2 out of 5]

Maybe good for someone at a different point in their familiarity with these concepts, but this book was way too full of generalities and lacking in substantive discussion of any of the issues. "Reinventing the Bazaar" was a far better version of a similar concept.

[Charity · Rating 5 out of 5]

formative

[Tarbuckle · Rating 4 out of 5]

Scholarly and yet utterly accessible and readable, Lindblom has written herein a thoroughly enlightening analysis of the market structure that underlies our globalized economies—indeed, it's a book that, ideally, every citizen should read and thusly assist herself in paring away the tendentious cant plastered about by all sides from similarly globalized soapboxes.

[Alex Brown · Rating 3 out of 5]

This is a good take on market economics for a broad audience. Lindbloom does a good job of explaining the market through the lens of social coordination, and I was intrigued by his discussion of the market's effect on democracy.

[Tidar Rachmadi]

This book helped me a lot in finding the theories for my thesis. Those who concern with economy-politics study, this might be one of the book you should read. Lindblom clearly explain the market system esp the capitalist regime both in the developed countries and developing countries.

[Jonathanstray Stray · Rating 5 out of 5]

The most lucid discussion of markets (and the philosophies, ideologies, and practicalities around them) that I have ever discovered.

[Trevor Carlsen · Rating 3 out of 5]

An easy enough read. It is agreeable that capitalism is the best system but the author's main point -that more regulation is needed - is misguided.

[JimZ · Rating 5 out of 5]

Among the very best, non-technical, books about the market. Recommended!