ABSTRACT
This chapter discusses the role of the state in relation to private market power. It examines its role in relation to general economic performance and stability. The phenomenon of countervailing power does provide a negative justification for leaving authority over production decisions in private hands. Since the development of countervailing power is irregular and incomplete, it does not provide a blanket case for the exclusion of state interference with private decision. Moreover the state must be expected to participate in the development of countervailing power. In the competitive model there was a strong affirmative case for private production decision. Competition produced the most efficient use of resources; any interference by the state with private decisions concerning production could not therefore be beneficial and must accordingly be harmful. The process of decision-making has two dimensions, timing and quality. The objective of social control over production decisions is to make the resulting decisions more responsive to social needs and desires.
