Home
/
RELIGION & LIBERTY ONLINE
/
Top 10 Reasons to Rely on Private Sector Markets
Top 10 Reasons to Rely on Private Sector Markets
Jan 30, 2026 10:45 PM

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
Farewell, Father Neuhaus
First Things has announced that Father Richard John Neuhaus died this morning. I am hardly qualified to write a eulogy, having never met the man. No doubt others, including one or two Acton colleagues who knew him better, will perform this service admirably. But I pelled to offer a few words, as I have long admired Fr. Neuhaus and his vital work, in particular the journal he edited for many years, First Things (FT). In the mid-1990s, I was a...
Acton Commentary: A Second Opinion on Employer Responsibility for Heath Care
Health care reform is likely to move back into the public eye as a new Congress and a new Obama administration prepare to start work this month. In this week’s Acton Commentary, Dr. Don Condit argues for a move away from employer funded health care benefits to a portable system. “Corporate human resources departments should not be viewed as the main source of support for Americans’ health care,” he writes. “The iniquitous government subsidy for employer-based health care could be...
Book Review: My Grandfather’s Son
Perhaps the most striking theme of Associate Justice Clarence Thomas’s autobiography My Grandfather’s Son is just how many obstacles Thomas had to e to reach the high judicial position he currently holds. Thomas was born into poverty, abandoned by his father, and was raised in the segregated South all before achieving the American Dream. At the same time, it was Thomas’s poverty-stricken circumstances that would help propel him to a world of greater opportunity. Because of his mother’s poverty, when...
Conservative/Libertarian Books for the Acton Reader
It is the new year and the time of reflection is upon us. In 2008, we witnessed a revolutionary left-liberal presidential victory and the onset of substantial economic challenges. Under the circumstances, I thought now might be a good time to propose a list of outstanding books for the intellectually curious friend or fellow traveler. I would not dare attempt to put these in order based on excellence. Just consider it a series of number ones. 1. Lancelot by Walker...
One Good Thing about Term Limits
I’m ambivalent about the value of term limits, but one thing that can certainly be counted in their favor is that they (at some point at least), force lawmakers to go out and try to make a living in the economic environment which they helped to shape. In Michigan, nearly half of the 110-member House of Representatives will consist of new members. Of the 46 new members, 44 ing from seats that were open because of term limits. And now...
Summing Up a Great Man’s Life
Richard John Neuhaus is dead. We’ve lost some big ones in the last year. Many of you will not realize how big this one was. I pray Jody Bottum and some of the others in the First Things (Neuhaus’ hugely influential journal) world can carry on his legacy. Though Neuhaus’ death leaves a chasm to be filled, I think Dr. Bottum is the right man for it. Anthony Sacramone is a former managing editor of First Things. He is also...
Remembering Father Richard John Neuhaus
For those concerned with a vigorous intellectual engagement of the religious idea with the secular culture, these past 12 months have been a difficult period. On February 28, 2008, William F. Buckley, Jr. the intellectual godfather of the conservative movement in America, died. Only last month, Avery Cardinal Dulles, SJ, passed away at 90 years old. Cardinal Dulles was one of the Catholic Church’s most prominent theologians, a thinker of great subtlety, and a descendent from a veritable American Brahmin...
Cardinal Cormac Murphy O’Connor and the ‘Death’ of Capitalism
Cardinal Cormac Murphy-O’Connor, the Roman Catholic Archbishop of Westminster and President of the Bishops’ Conference of England and Wales, has touched off a row over remarks he made recently concerning the demise of capitalism. Here’s the context from the Daily Telegraph, a British newspaper: [the Cardinal] made the astonishing claim at a lavish fund-raising dinner at Claridges which secured pledges of hundreds of thousands of pounds for the catholic church. The Cardinal, dressed in his full clerical regalia, said in...
Ignorance, Humility, and Economics
I like Robert Samuelson’s recent column about the difficulty (impossibility?) of accurately analyzing economic reality, let alone predicting its future. Over the past several months a few people, mistaking me for someone who knows a great deal about economics, have asked what I think about the financial crisis, the stock market, the recession, etc. My response is usually something along the lines of the following: Anyone who pretends to know and pletely the causes of the economic meltdown and/or how...
Neuhaus and the Academy
Part of the reason Richard John Neuhaus will be remembered is for his impact on Christians in higher education. There is no question that his seminal book The Naked Public Square and then his journal First Things changed the way many of us think about religion and culture. He also did something I think is nearly impossible with FT. He created a serious journal that causes many people (a great many of them professors) to do a little dance when...
Related Classification
Copyright 2023-2026 - www.mreligion.com All Rights Reserved