Home
/
RELIGION & LIBERTY ONLINE
/
Top 10 Reasons to Rely on Private Sector Markets
Top 10 Reasons to Rely on Private Sector Markets
Aug 16, 2026 4:48 AM

This week’s Acton Commentary from Baylor University economics professor John Pisciotta:

Americans have less confidence and trust in government today than at any time since the 1950s. This is the conclusion of the Pew Research Center survey released in mid-April. Just 22 percent expressed trust in government to deliver effective policies almost always or most of the time. With the robust expansion of the economic role of the federal government under George W. Bush and Barack Obama, the Pew poll is evidence of an opportunity for advocates of freer markets.

That Americans distrust their government is not unadulterated good news. An effective rule of law, one aspect of which is a government that can be trusted to act justly and equitably, is a necessary precondition of the free and virtuous society. Still, in the context of the extraordinary extension of government control in areas such as finance and health care, news of political skepticism offers an opportunity for those who recognize that both the moral and economic wellbeing of our nation depends more on the health of individuals, families, and other institutions than on the engineering of bureaucrats. The apostle Peter advised Christians to “always be ready to give an answer” to those who ask for “a reason of the hope that is in you” (I Pt 3:15). This advice is relevant for defenders of private sector reliance. We must not merely repeat slogans regarding private enterprise. We must express the reasons why we defend decentralized, voluntary organization of our economy over centralized control. Here are my top 10 reasons, in reverse order, for the hope that is within me.

10. Difference petition. Competition is at work in both government and private markets, but petition in markets is more civil and evenhanded. petition is similar to golf. petitor works to improve his own performance. petition—between parties, between candidates for office, and among legislators—is more like basketball. While petitor works to elevate his own game, participants also attempt to undercut, debilitate, and intimidate opponents. It mon to see political advertising that is hostile, even to the extent of lying about the opponent. Combative ads are the exception in business appeals to consumers.

9. Enterprise expansion. In private markets, a business venture has to be profitable to expand, whereas expansion is “in the DNA” of government ventures and programs. Program beneficiaries and bureaucratic suppliers work in collaboration with elected politicians to expand particular government programs. The basic idea is this: If a government program is good, an expanded program would be even better.

8. Enterprise contraction or elimination. Business enterprises that incur chronic losses must either change or die. In contrast, “government program elimination” is almost an oxymoron. The political alliance that works to expand a government program can almost always fend off efforts for cutbacks or elimination. The market process, meanwhile, is a “sorting out mechanism” based on loss and profit. The life of any business venture is always tentative.

7. Gradations of success. Few industries are dominated by one or two firms. Instead, many pete, success is measured by small gains in profits and market shares, and there can be multiple winners. For political elections and legislative votes, however, it is “winner take all.” With a 49 percent vote in an election, you are a loser. The thin margins for many political es make elections and legislative battles rather brutal affairs.

6. Product diversity. Product differentiation is pervasive as businesses try to appeal to new consumers. Different businesses try to cater to different market segments, resulting in wide consumer choice. Government provision of a product or service tends toward “one size fits all.”

5. Sources of evaluation and accountability. Market accountability is “bottom up” from consumers, with diverse criteria of evaluation. Government accountability is “top-down” based on the discretion of political authorities. Performance measures are rather narrowly defined, as with high-stakes testing for K-12 education in “No Child Left Behind.”

4. Consumer knowledge. Individuals tend to be more knowledgeable about their market choices than about their government choices—for both candidates and policy issues. The reason is that a consumer gets to make decisions for him- or herself. With government, a citizen just gets to “weigh in” with a vote, a contribution, or phone calls to legislators. A citizen’s influence on political es is highly diluted and may be regarded as nil, diminishing citizen incentive to e informed. Moral responsibility is always enhanced by a close connection between actions and consequences; the political process weakens this connection. What economists call “rational citizen ignorance” is woven into the fabric of elections and public policy debates.

3. Influence of the ignorant. Rationally ignorant citizens are often decisive in politics. In a tight election contest, the ad wars in the days prior to the vote are focused on the less knowledgeable voters. The more informed citizens of the left, right, and middle have already decided. The stage is set for the ill-informed, perhaps a fourth of the electorate, to determine the election result. In contrast, private sector suppliers must cater to the more knowledgeable “voters.” For instance, puter producer caters puter geeks and purchasing executives at Walmart and Best Buy rather than attempting to take advantage of the poorly informed. Computer purchasers who know very little about gigabytes benefit from the dominant role of knowledgeable buyers.

2. Time horizon for decisions. Business management tends toward balanced consideration of short-term and long-term impacts. Even if a business owner expects to sell out shortly, the owner wants the enterprise to have healthy long-term prospects so as to fetch a high selling price. For our national government, elections can be no more than four years away for a president, two years for a representative, or six years for a senator. As a result, government decision-making tends to emphasize short-term costs and benefits relative to long-term impacts. Social Security and Medicare reform remains on the backburner because long-term solutions involve significant short-term sacrifice.

1. Cost control. Since we are in the grip of exploding federal deficits and debt, my No. 1 reason for concern about government is its inability to control costs. For the private sector, the profit motive means that managers are always in tune to avoiding unnecessary expenses and to controlling costs of production. Effective resource management translates to higher business profit. Profit is no part of the equation in the legislative process or in bureaucratic management. Rather than limiting costs, bureaucratic managers will spend every dime appropriated. And legislators are generally inclined to fund bloated budgets. “Cost-effective government” is an oxymoron.

Polling results show the tide is starting to turn against big government solutions to economic challenges. To intensify and solidify this shift, we must make the underlying case for decentralized market solutions. Preserving a sphere of action for private enterprise both makes economic sense and empowers individuals as actors with moral responsibility instead of relegating them to pawns in a high-stakes political game.

John Pisciotta is associate professor of economics at Baylor University.

Comments
Welcome to mreligion comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
RELIGION & LIBERTY ONLINE
Acton University: An Invigorating Intellectual Experience
Registration is now open for Acton University, planned for June 18-21, 2013. Courses for this year’s conference (subject to change) include Theology of Work, Social Entrepreneurship, Rise and Fall of the European Social Market, Fertility’s Impact on the World Economy, and Islam, Markets and the Free Society. (A full course listing can be seen here.) If you’re new to Acton, or would like to share the Acton University experience with someone, please enjoy Acton Institute Presents: Acton University. ...
What is the Purpose of Our Government?
If we asked many of our fellow Americans today “What is the purpose of government?,” undoubtedly, we might be barraged with some vexing ical answers. But I’m not one to believe that a good deal of our citizens can’t answer this question quite intelligibly. Still, I don’t think it would be enough to embody a healthy republic. It is time for our country to ask these basic questions again. It seems as if the looming chaos of our current national...
Vatican II and Religious Liberty
Of all the documents that came out of the Catholic Church’s Second Vatican Council, Dignitatis Humanae (Declaration on Religious Liberty) was, says Omar F.A. Gutierrez, the most revised, debated, and controversial. But as Gutierrez argues, it also represented a development, rather than a reversal of Catholic teaching: The perception of the Church’s teaching by many was that whenever she found herself in the minority, the Church would cry religious liberty. However, if the Church was in the majority, the state...
How to Develop a Christian Mind in Business School (Part IV)
Note: This is the fourth in a series on developing a Christian mind in business school. You can find the intro and links to all previous posts here. As I mentioned in the last post, when in this series I talk about developing a Christian mind in b-school I’m referring primarily to learning how to think Christianly about things as they are symbolized, things as they are known, and things as they municated. That is, how to think Christianly about...
Why Would Anyone Choose Twitter Over Indoor Toilets?
Do most people value electricity and indoor plumbing more than cell phones and the Internet? In his article, Is U.S. Economic Growth Over?, economist Robert Gordon argues that they obviously do, and offers this thought experiment to prove his point: A thought experiment helps to illustrate the fundamental importance of the inventions of [the second industrial pared to the subset of [computer age] inventions that have occurred since 2002. You are required to make a choice between option A and...
Audio: Samuel Gregg discusses ‘Becoming Europe’ in two new interviews
Samuel Gregg, director of research at the Acton Institute, recently had two interviews discussing his latest book, ing Europe. Here is his interview on the Armstrong & Getty Show: [audio: Here is his interview on the Dennis Miller Show: [audio: Lord Griffiths of Fforestfach, the vice chairman of Goldman Sachs International and former special adviser to Margaret Thatcher, said this about ing Europe: Highly readable, well researched, and extremely timely. This book is the definitive case why America should cling...
Samuel Gregg: ‘Becoming Europe’ – A Heritage Event
Author of ing Europe” and Acton’s Director or Research, Samuel Gregg, will be at The Heritage Foundation on Thursday, February 7 to speak on “Economic Decline, Culture, and How America Can Avoid a European Future.” The event can be attended in person or viewed online. Visit the Heritage events page for more details. Read an excerpt of ing Europe” and purchase the book here. ...
Building ‘With Haitians, for Haitians’
It has been three years since the nation of Haiti was overwhelmed by earthquake devastation. In those three years, to the naked eye, it often appears as if little has been done. After all, at least 360,000 people still live in tent cities and infrastructure remains dubious. However, three years is a short time in a nation’s history, especially a nation like Haiti, with its background of political turmoil, slavery and natural disaster. According to Catholic New Service, progress –...
Access vs. Ownership in ‘Collaborative Consumption’
New rental markets are popping up all over the place, as detailed by a recent Wall Street Journal article. The trend is beginning to drive a larger movement labeled by some as “collaborative consumption,” wherein “sharing” is pushed as a way of “reinventing old market behaviors.” Over at Carpe Diem, Mark J. Perry provides a helpful round-up on the phenomenon, pointing to the already mentioned WSJ article, a new Collaborative Consumption Hub web site, and a host of relevant products...
Samuel Gregg: Americans’ ‘Absurd Expectations’ and the Economic Crisis
Samuel Gregg, Acton’s Director of Research and author of the book ing Europe“, says one of America’s real debt dangers is our increasing sense of entitlement from the government. In today’s Investor’s Business Daily editorial, Gregg states our “insatiable appetites” are getting us into the very deep economic trouble that no one, least of all politicians, seems to want to face: …Luxembourg’s Prime Minister Jean-Claude Juncker famously lamented in 2007: “We all know what to do, but we don’t know...
Related Classification
Copyright 2023-2026 - www.mreligion.com All Rights Reserved