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Charles Lindblom (1917 – 2017), one of the most important political scientists of the twentieth century, published in 2000 The Market System : What it is, how it works, and what to make of it. For the first time, Lindblom attempted to reach a large, general audience with his work. His motivation for doing so stemmed in part from his growing frustration over the superficial and one-sided way in which the market is thought about. Like other processes of “spontaneous mutual adjustment,” the market has great merits, and Lindblom did not fail to appraise them extensively in his book. But this instrument of social order also has very serious shortcomings. Increasingly, people seemed to forget this in the market-liberal euphoria that had been sweeping over them since the 1980s. Therefore, it was time for a thorough and balanced rethinking of the free market.
Following the publication of The Market System, I interviewed Lindblom in 2000 for the Dutch academic magazine Facta. Despite our not always very positive experiences with the market in the last two decades, our faith in this social instrument has hardly waned. Therefore, it is useful to review Lindblom’s insights once again. Before reporting on this interview, I will first place Lindblom’s thinking in context.
Introduction to Lindblom
Lindblom’s scholarly career, which began in economics, closely paralleled those of Robert Dahl (1915 – 2014) and Robert Lane (1917 – 2017). The three of them arrived at Yale University in the late 1940s, and together they made its political science faculty the centerpiece of the discipline for a long time. Dahl and Lindblom made their name together with Politics, Economics, and Welfare (1953), a magisterial book on social order. In it they exhaustively weigh the pros and cons of four different techniques of social control and coordination: the market, hierarchy (especially bureaucracy), polyarchy (the form of democracy that exists in the real world), and bargaining (the endless negotiations between stakeholders about the goals and instruments within a particular policy-field). The care with which they examine which technique, whether or not in combination with other techniques, leads to optimal social results in which domains, is still unparalleled.
Dahl’s attention has always been primarily focused on the political theory of pluralism; Lindblom has primarily been concerned with the policy processes within the societies described by this theory. As is customary in pluralism, he assumes that there is no consensus among citizens on a definition of the common good and that society consists of a large number of groups and institutions that pursue their own goals in constant competition with each other. Like pragmatists such as James and Dewey, Lindblom further believes, that values and purposes cannot and should not be defined in the abstract, but only in a concrete context and that, despite disagreements about the purposes of policy, agreement can often be reached about its instruments. Closely linked to pragmatism is his conviction that policymakers possess too little knowledge and information about society to be able to make responsible comprehensive and far-reaching decisions. It is better to try to solve manageable short-term problems through cautious trial and error. In this spirit, Lindblom makes a powerful plea for incrementalism: trying to improve the existing situation piece by piece, in an endless, continuous stream of marginal policy adjustments, in the knowledge that our knowledge and skills are extremely limited and that large leaps forward are therefore almost always doomed to failure. Critics of Lindblom’s incrementalism have often confused this with conservatism (Dror 1964; Etzioni 1967). However, being in favor of marginal policy changes says nothing about the pace at which these changes should follow and their direction.
A further characteristic of Lindblom’s thinking is that he extends the analogy between the economic market for goods and the electoral market for votes to the formation of policy. Stakeholders negotiate with each other on a policy market about the instruments and goals of policy, and in a similar way to what happens on an economic market, individual actions are hereby coordinated in an unconsciously pursued way. This process also ensures to a great extent that the different values that live within a community are represented by policy in a proportionate way. For Lindblom, however, the structure of the policy market is not a given: politics can and must regulate this market. It should be determined, among other things, which parties in this market negotiate with each other, under which conditions, and how strong their relative positions are in this respect. If, therefore, in the negotiations between stakeholders about, for example, the future of livestock farming, the interests of the natural environment and animals are insufficiently protected, then it is a task for government to strengthen the negotiating position of those groups which do adequately represent these interests.
For Lindblom, policy is therefore not the result of the preferences of electoral majorities, but comes about in a continuous process of negotiation between passionate minorities. Nevertheless, the eventual policy is a reflection of the values and convictions living in society and can usually count on the approval of the majority. Moreover, Lindblom argues that a political decision-making process in which many independent social organizations participate not only prevents concentrations and abuses of power, which is the usual perspective of pluralists. He also argues that such decision-making produces significantly more rational, balanced and legitimate policies than a centrally led system.
The elaboration and justification of these axioms forms the leitmotif of Lindblom’s work in the 1960s and 1970s. This is most notably in his A Strategy of Decision: Policy Evaluation as a Social Process (1963) and his The Intelligence of Democracy: Decisionmaking through Mutual Adjustment (1965). Both are classics in political science, although, as is so often the case, they are probably more frequently referred to than read.
It is noteworthy that while many of the ideas about policymaking developed by Lindblom in the 1950s and 1960s became almost commonplace in the 1980s and 1990s, Lindblom himself changed track in a number of areas from the late 1970s onwards. Manifestations of this are Politics and Markets (1977), Inquiry and Change (1990) and The Market System. In the 1960s, for example, Lindblom suggested that he, along with many other pluralists, assumed that there were no groups or institutions that possessed an extraordinarily privileged bargaining position in the policy market. As soon as this was the case, a social counterforce, a new action or pressure group, would generally develop to redress the balance. This suggestion is unequivocally rejected in his later work. Corporations in particular have incomparably more political resources (money, knowledge, organization, relationships), and thus political power, than other interest groups. In addition, and more importantly, their representatives will always find a more than willing ear in the government, since the latter has become highly dependent on the functioning of the private sector for its public legitimacy. A government falls when unemployment is high. Lindblom also considers it naïve to assume that companies are steered entirely by the market and that it is therefore ultimately the consumers who determine their policy. Entrepreneurs take numerous decisions with far-reaching consequences for individuals, groups and even societies, which are not or hardly forced upon them by the market, or the consumer. These include decisions about the location, the technology to be used, product development or innovation, management personnel, remuneration structure and labour relations. In our liberal political systems, the power to decide on these social issues has been largely transferred to individual entrepreneurs. Consequently, according to Lindblom, there are de facto two elites in these systems: a political one, which the citizens can still somewhat – but far too limited – call to account, and an economic one, which largely has free rein. The latter certainly also because, together with the other elites, they exert an enormous influence on the values and ideas in which people are socialized, values and ideas which invariably confirm the position of the elites.
Despite Lindblom’s severe criticism of the present social order, he remains an extremely cautious reformer. The description given by Robert Dahl in a friends book of Lindblom in 1993 is therefore apt: “Bold critic, cautious reformer, skeptical but hopeful rationalist.”
Interview with Lindblom
Starting with Politics and Markets and then in Inquiry and Change, you emphasize the tremendous impairment of citizens’ thinking by elites, especially elites associated with business. This theme also returns in The Market System. What do you understand by this impairment ?
I see history as a long process in which society has been divided into an elite and a mass. Elites can take many forms. Sometimes they are distinguished only by their exclusive possession of horses, a possession that allows them to gain and protect a position of power over those without horses. Sometimes they owe their position to their wealth and all the things they can buy with it. And sometimes there is an elected elite. But like all other elites, they also try to continue and also to strengthen their position. There is a long historical process of a constantly recurring struggle between an elite that seeks to perpetuate its power, and a mass that seeks to control and constrain it. History, of course, consists of more than this struggle, but it is a basic component. In some societies, the elites maintain their privileges through rather crude, unflinching threats of violence or through actual violence. They pick up, they kill, they terrorize. However, these methods are relatively costly and ineffective in the long run. Therefore, the elites seek more humane, less reprehensible, more legitimate methods. And so they try to capture the spirit: they proclaim the gospel of reverence, competence, obedience, the importance of hierarchy, the value of inequality, the dangers of equality, the dangers of skepticism and doubt, the need for trust … it leads together, not to a deliberate conspiracy, but to a tacit, implicit proclamation and recognition of a message that is extremely effective in defending the privileges of the social elite. You can see the effectiveness in the degree to which the message is accepted. As Bob Lane observed years ago in his Political Ideology (1962), we live in a society that is deeply suspicious of equality, even though it seems perfectly obvious that more equality would benefit many. A contemporary society can be frightened extraordinarily easily by the prospect of greater equality. People have a deep respect for hierarchy and leadership. It manifests most irrationally and dangerously in nationalism and patriotism. I could go on, but you get the point. My view is that no one escapes the massive, one-sided and unilateral messages in which these values – subtle, implicit and explicit, open and hidden – are transmitted. This is no less true for the elites themselves: they too eventually come to believe in them. All these constraints – this mindless adherence to values such as hierarchy, obedience, inequality, trust – constitute a ground level of impairment that prevents us from thinking clearly, in an unbiased way, about politics and economics. We don’t have good economic and political systems because we have been and are greatly impeded in our ability to recognize and design good systems.
The question, of course, is how we will ever break this impairment.
That is extremely difficult and I am therefore deeply pessimistic. Nevertheless, in the very long term, we are moving forward. The current situation is better than it was in, say 1850. And 1850 was better than 1750. If you are willing to think in periods of a hundred years, there is an upward trend. Perhaps hundred-year periods are the shortest intervals in which some progress can be seen. Of course, there are regular setbacks, but overall, I still see a slow, incremental progress.
Focusing on the short term, in what ways could the quality of the public debate, the diversity of views circulating, be improved? In your book you argue, among other things, for a legal prohibition on companies investing any more money in influencing the formation of opinion – no more political contributions, no more research grants, et cetera.
A great many communications in our society are not aimed at informing, but at controlling people. Almost all communications from business and from politics are attempts to control and to direct people. There is no healthy competition of ideas in which entrepreneurs and politicians make their contribution. They drown out all other possible participants. In addition, they do not represent real alternatives: the advertising messages of businesses overlap and the same is true of the messages of most politicians. It is also difficult to maintain that their messages are empirically based and respect the truth. We have become so used to advertising messages and politicians’ statements being beside the truth that we don’t even get angry about them anymore. The quality of political debate has reached an all-time low under the influence of mass media and marketing techniques. Further reinforced by this are the patterns of circularity: people’s preferences are not authentic but are largely shaped by the elite. The democratic idea that this elite is controlled by the masses has been completely corrupted as a result. A huge industry has emerged to influence citizens and consumers at the behest of the elites in politics and business. Anything seems to be permissible in this, as long as it works. This industry is not a necessary part of a market system, even though we have become accustomed to its presence. For the purpose of combating impairment, we can therefore do without it. There is no reason why we should conceive of companies in this field as legal persons, entitled to disseminate opinions and participate in public discussion. In the same way that corporations do not have voting rights, they do not need a right to support political campaigns, disseminate political opinions, support scientific research, education or the arts for the sake of their functioning. Nor is there any reason to believe that market systems would collapse if corporations were no longer allowed to advertise their products.
The idea of impairment implies that the presence of pluralistic information is not the only issue. The problem is that someone must be interested in it. The sociologist Alan Wolfe interviewed at length a very large number of middle-class people from suburbs across America (One Nation After All, 1998). What struck him was that these people were relatively open-minded about the relationship between men and women, parents and children, whites and blacks, immigrants and natives. But their interest in others was purely local and private. Anything that had to do with politics and transcended the immediate living environment had lost their interest. It goes well for them and all the others can work it out for themselves.
A few things. When you talk about the circle of people and subjects in which these suburbanites can take an interest, this circle is of course partly biologically determined. However, the present total lack of interest is also a consequence of impairment – a social product – and therefore, in principle, we can do something about it. There is room for hope. People are limited in many ways in their thinking about politics: politics is not interesting, gives little prestige, gives little satisfaction. Certainly, in the United States, they have been taught from high school onward to see politically active people as somewhat destructive elements of social life. So on the one hand we teach our schoolchildren that they should vote, and on the other hand we tell them, “never do anything more than that, because politics is a dirty business!”
Second point. It is conceivable that we will never have an extraordinarily humane and democratic society, even if people were significantly “disimpaired”. It is quite possible that the democratic dream is an impossible dream, and that societies are forever destined to be distant approximations of democracy, and forever enormously unjust, unequal and unnecessarily harsh. But again, you can ask the question, “do we have a greater fighting chance when the problem is biological or social?” I think the doctrine of impairment gives us a little more hope for a better future.
Finally, how large must the circle of politically active people be to change society somewhat for the better? How much intelligence do we need to mobilize? In my view, we do not need to make everyone an ideal citizen and a political activist. There is a nice parallel here between market behavior and political behavior. When I used to lecture in elementary economics, I would talk about the pressure on suppliers to keep prices low. There were always students who remarked that when their parents went to buy lettuce, they never asked about the price. They were used to buying a certain range of food and they bought it every week without paying attention to the price. I would always point out that their parents, like the majority of people, may never look at prices, but some did. And in a market, that is generally enough. A small minority of about 5 percent of the demanders who keep a close eye on prices, a swing group, keeps the pressure on the providers in practice. It might be the case that a similarly small group of politically active citizens is enough to increase the quality of democracy. Perhaps I am being far too optimistic, but it works in the marketplace.
You have always been fascinated by the potential of spontaneous processes of mutual adjustment to coordinate and control human behavior. The market is an example of this. Where does this fascination come from?
Probably the idea that you get something for nothing, I don’t know (Lindblom laughs). The market has something magical about it. Nobody tries to coordinate behavior, yet it happens. You can study economics for years – and many do – without ever coming to the discovery, that the market is a very powerful, all-encompassing, all-sided organizing and coordinating tool. But once you understand this, it’s an Aha-Erlebnis. Part of my fascination also comes from being able to draw parallels between political and economic processes. It is a challenge to explore these.
The market is usually defined as a system whose essence is competition. However, you define its essence as cooperation.
Indeed. When economists talk about competition, you shouldn’t think of two runners trying to cross the finish line first. Competition in the marketplace is about the impersonal relationship between, say, two grain farmers, one in North Dakota and one in Kansas. They don’t know each other. They don’t even know that the other exists. One is not trying to be better than the other. There is no enmity, rivalry or bread envy. Nevertheless, the market organizes them into a system. Because of the market, they have a distant competitive, impersonal relationship with each other, a relationship that makes their behavior predictable and not random. To make it possible for people to drink coffee in Italy, thousands of people, in an incredibly long chain beginning with the coffee planters in Columbia and ending with a waiter in Milan, interacted with each other. Not consciously, not out of altruism, but nonetheless they have collectively accomplished something.
You describe the rule that determines how the market system works as quid pro quo: what you get is proportional to what you put in. Today, this rule is increasingly taken for granted, both in economic and ethical terms. You think differently about this.
Yes, indeed I do not understand what is self-evident about this. First of all, the market rewards only marketable goods and services. However, there are a lot of extraordinarily valuable contributions to the market and society that are not traded in the market. What did Bill Gates’ mother get out of the market as a reward for raising Bill? What did the mother of Henry Ford get? What did Einstein get out of the market? Is there anyone who would seriously deny their contributions? There is an endless line of people who have made enormous contributions to society and have been and are rewarded by the market for doing so with nothing or hardly anything. So, it seems perfectly obvious to me that the market does not pay out in accordance with what you put in. Apart from this, I absolutely do not understand why we should agree to this rule in an ethical sense. What on earth is ethical about this rule? I can understand it when someone claims, that their application encourages people to work harder and longer and that the rule therefore increases output. This is a statement about empirics that we could test. It might be true. But as soon as you leave this level and call it a self-evident ethical principle, I wonder: what is the basis of this? I don’t understand its appeal. How does one come up with this? Where does this nonsense come from? The rule seems to me to be totally arbitrary and sought after.
Finally, among those who have followed your work over the last six decades, there is a long debate about whether you have become more radical over the years. In 1988, You addressed this in the preface to Your Democracy and the Market System. You essentially denied it. What would be your answer today?
I have become more inclined to the left. More than in the past, I am willing to reform the market system. I am a little more willing to try to realize collective values. But I am still hampered by a certain ambivalence here. I find the existing political and economic arrangements so unsatisfactory, so unequal, so unjust, and so irrational … I feel a certain desperation or bewilderment about how things are, compared to how they could be. This is my radical side. But then I look at the incompetence of the impaired people and their impaired leaders and then I begin to become very cautious and conservative in touting specific interventions for the betterment of this society. And so I continue to struggle with myself. But again, in this struggle, I have come to see more opportunities for prudent, incremental, testable interventions in an effort to create more respect in our society for collective values. I have also become more radical because I agree with the proposition, that there is an overall degeneration of the political process and political debate. This in turn encourages a radical, critical attitude and dampens hesitations to intervene and try to do something about it. My struggle manifests itself painfully when I think, for example, of the enormous shortcomings of the American Constitution. Then I ask myself, “Would I want a Constitutional Convention to write a new one?” My God! When I think of what people would participate in this convention and what values they would write into a new constitution … it would be a catastrophe!
Blokland, Hans T. 2006. Modernization and its Political Consequences. New Haven and London: Yale University Press
Blokland, Hans T. 2016. Pluralism, Democracy and Political Knowledge. New York and London: Routledge.
Blokland, Hans T., Rune Premfors and Ross Zucker. 2018. Charles Edward Lindblom, In Memoriam. Political Science & Politics, Vol.41, No.2.
Dahl, R.A. & Lindblom, C.E. 1953. Politics, Economics and Welfare: Planning and Politico-Economic Systems Resolved into Basic Social Processes, Chicago, The University of Chicago Press.
Dahl, Robert A., 1993. ‘Bold critic, cautious reformer, skeptical but hopeful rationalist’. In: Harry Redner (ed.) An Heritical Heir of the Enlightenment. Boulder, San Francisco and Oxford: Wetsview Press, pp.23-31.
Dror, Yehezkel. 1964. ‘Muddling through – “science” or inertia?’. Public Administration Review. Vol.24. No.3. pp.153-7
Etzioni, Amitai. 1967. ‘Mixed scanning: a “third” approach to decision-making’, Public Administration Review, Vol.27, No.3.
Lane, Robert E. 1962. Political Ideology: Why the American Common Man Believes What He Does. New York: The Free Press of Glencoe.
Lindblom, Charles E. 1965. The Intelligence of Democracy: Decision Making Through Mutual Adjustment, New York: Free Press
Lindblom, Charles E. 1977. Politics and Markets: The World’s Political-Economic Systems, New York, Basic Books
Lindblom, Charles E. 1988. Democracy and Market System. Norwegian University Press.
Lindblom, Charles E. 1990. Inquiry and Change: The Troubled Attempt to Understand and Shape Society, New Haven and London: Yale University Press.
Lindblom, Charles E. 2000. The Market System, New Haven, Yale University Press
Lindblom, Charles E. and David Braybrooke. 1963. A strategy of decision: policy evaluation as a social process, New York, Free Press.
Wolfe, Alan. 1998. One Nation, After All: What Middle-Class Americans Really Think About God, Country, Family, Racism, Welfare, Immigration, Homosexuality, Work, The Right, The Left and Each Other. New York: Penguin.