Home
/
RELIGION & LIBERTY ONLINE
/
Top 10 Reasons to Rely on Private Sector Markets
Top 10 Reasons to Rely on Private Sector Markets
Jan 29, 2026 5:57 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
What you need to know: Today’s new Brexit transition agreement
On Monday afternoon, David Davis of the UK and Michel Barnier of the EU revealed that their governments had agreed on the shape of their relationship during the first two years after Brexit. Here’s what it will look like: A 21-month transition period: The UK will officially leave the European Union on March 29, 2019. Monday’s announcement adds a 21-month transition period, which will end on December 31, 2020. During this phase, the UK will enjoy all “thebenefits, the advantages...
How real GDP per capita measures standard of living
Note: This is post #72 in a weekly video series on basic economics. If money can’t buy happiness, why do we measure standard of living in economic terms, specifically GDP per capita? A primary reason is that increases in real GDP per capita also correlate to improvements in those things money can’t buy, such as health and happiness. In this video by Marginal Revolution University,Alex Tabarrok explains why it’s a helpful measure—and where it falls short. (If you find the...
Samuel Gregg: Why America needs a patriotic case for free trade
“While the economic arguments for free trade pelling, the political rationale requires a long-overdue overhaul,” says Samuel Gregg, Acton’s research director. Writing at Public Discourse, Gregg argues that America needs a patriotic case for free trade: So how does free trade bolster America’s standing in the world? Here are three particular benefits that free traders might consider emphasizing. First, free trade helps make America a more economically flexible and disciplined country. Openness to petition prevents, for example, American businesses from...
What has God got to do with banking and finance?
In the latest edition of The Independent Review, Gerald P. Dwyer Jr. reviews Samuel Gregg’s For God and Profit: How Banking and Finance Can Serve the Common Good. “The most unusual aspect of Gregg’s book is bination of topics advertised in its very title: For God and Profit,” says Dwyer, “We all know about defenses of free markets. God seldom appears in those arguments. What has God got to do with it?” Catholic social teaching is the framework Gregg uses...
What Christians should know about tariffs and balance of trade
Note:This is the latest entry in the Acton blog series, “What Christians Should Know About Economics.” For other entries inthe series seethis post.The purpose of the series is not to present a theology of economics, but simply to provide a basic level of understanding that will help Christians think more clearly about how to apply their mitments to economics and public policy. The Term: Tariffs and Balance of Trade What it Means:Balance of trade is the difference in value over...
How managers can help save the world
Why are some countries rich while other countries are poor? A primary reason, as economists have been pointing out for hundreds of years, is productivity—the efficient use of such resources as labor and capital. Imagine that panies have the same number of workers and use the same amount of materials to make identical widgets. pany A is able to make 100 widgets in the time it pany B to produce 50 widgets. Company A obviously has some “secret sauce” that...
The broom prophet: Lessons from a craftsman on sanctified work
Throughout its history, the American economy has transitioned from agrarian to industrial to information-driven. In turn, “work with the hands” has e less and mon, replaced by widespread automation and a host of intangible services. Meanwhile, a quiet resurgence in craftsmanship has begun, whether one looks to the massive online marketplaces for handmade goods or the diverse range of specialized artisans who continue to find niches in a globalized economy. Take Jack Martin, owner of Hockaday Handmade Brooms, who still...
Mao’s ‘rational faith’: How communist China sought to replace God
In light of Greg Forster’s Acton lecture on Whittaker Chambers, the famous Soviet spy who later converted to Christianity, I recently noted Chambers’ routine reminders munism is not, fundamentally, about a certain menu of economic theories or political tactics. “[Communism] is not just the writings of Marx and Lenin, dialectical materialism, the Politburo, the labor theory of value, the theory of the general strike, the Red Army, the secret police, labor camps, underground conspiracy, the dictatorship of the proletariat, the...
The winter of our disconnect: Green energy policies leave Europe out in the cold
“Human beings are called to be fruitful, to bring forth good things from the earth, to join with God in making provision for our temporal well being,” according toThe Cornwall Declaration On Environmental Stewardship,of whichActon Institute co-founder Fr. Robert Sirico was an original signer. “Our call to fruitfulness, therefore, is not contrary to but plementary with our call to steward God’s gifts.” This article about transatlantic policies thatput human well-being into opposition with environmental stewardship, whichappeared in MEP Daniel Hannan’s...
Why do Russian oligarchs hide their money in London?
Former Russian intelligence agent Sergei Skripal and his daughter Yulia are clinging to life after being attacked with nerve gas in Salisbury. British Prime Minister Theresa May and Foreign Secretary Boris Johnson plan to target the finances of Russian oligarchs in retaliation. Russian elites have spirited their cash to the UK via a dizzying array of British banks, businesses, and luxury properties: British banks reportedly processed $738 million in funds from an elaborate Russian money-laundering scheme known as “The Laundromat”;Transparency...
Related Classification
Copyright 2023-2026 - www.mreligion.com All Rights Reserved