In This Review

The Market System: What It Is, How It Works, and What to Make of It
The Market System: What It Is, How It Works, and What to Make of It
By Charles E. Lindblom
290 pp, Yale University Press, 2001

Except for anachronistic states such as Cuba and North Korea, communism is dead, along with its commitment to public ownership and central planning. Socialist parties everywhere have abandoned notions of command economies and the nationalization of key industries as main political objectives. Market economics has won the great ideological battle of the past half-century. But what exactly is the "market system?" Yale economist Lindblom takes his readers back to basics and provides a reasoned, accessible discourse on what a market system is, what it can plausibly do, and what its limitations are. Both praise and criticism of the market system may be misplaced, he argues, because their real targets may be technology, urbanization, or industrialization. The author sees a market system as a fundamental coordinating mechanism that adjusts the desires of households, firms, and governments. He sees no discernable alternative in modern, complex societies. But he does believe there is ample room for tweaking the market system along the lines desired by each society.