Home
/
RELIGION & LIBERTY ONLINE
/
Top 10 Reasons to Rely on Private Sector Markets
Top 10 Reasons to Rely on Private Sector Markets
Jan 1, 2026 3:10 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
5 Facts About Memorial Day
On Monday, Americans will observe Memorial Day, a federal holiday for remembering the people who died while serving in the country’s armed forces. Here are five facts you should know about this day of remembrance: 1. Memorial Day is often confused with Veterans Day. Memorial Day is a day for remembering and honoring military personnel who died in the service of their country, particularly those who died in battle or as a result of wounds sustained in battle. While those...
Wasting Away In Refugee Camps
A refugee camp, by definition, is meant to be temporary. Yet, in many places in Africa, young people know nothing but life in a refugee camp. And they are wasting away – perhaps not physically, but mentally, emotionally and in terms of feeling useful. In Tanzania, Ezad Essa explored some of these camp, talking to young people. Ilunga Malea Shabani, 26, says he does not recall his journey to Tanzania well. It was some time in 1997 when major fighting...
The Federal Government Spent $100 Billion on 18 Food Programs Last Year
The federal government spent more than $100 billion providing food assistance to Americans last year, according to recent testimony by the Government Accountability Office (GAO). Eighteen federal programs provided food to 46 million people—approximately 1 out of every 7 Americans. Here are the programs and the dollar amount spent: The GAO found significant overlap between these programs which “can create unnecessary work and waste administrative resources, resulting in inefficiency.” The GAO identified several food assistance programs that provide the same...
‘Advocacy Investors’ Are Activist Wolves in Sheep’s Clothing
Over at GreenBiz last week, reporter Keith Larson profiled Andrew Behar, chief executive officer of shareholder activist group As You Sow. In the article, Behar attempts to rebrand AYS activities as “advocacy investment.” For some capital market watchers, the term “activist investor” may bring to mind corporate raiders such as Carl Icahn or Bill Ackman. That’s why Andrew Behar, CEO of the nonprofit As You Sow, prefers to call social and environmental activist investors something a little more aspirational: “advocacy...
Has FLOW Changed Your Perspective? Share Your Story!
Have you beeninspired and influencedby the Acton Institute’s film series, For the Life of the World: Letters to the Exiles? What have you learned? How has it changed your perspective on work, culture, and whole-life discipleship? As Evan Koons explains, we’re interested in hearing your stories: Your story may get used in a blog post or a video, and if it does, you may even get some free stuff! Send your experiences to[email protected]. ...
Video: Hilton and Alderman on the Tragedy of Human Trafficking
Detail from Pamela Alderman’s “The Scarlet Cord” Those of you who are regular readers here at the Acton PowerBlog are very familiar with Elise Graveline Hilton’s extensive research and work on the subject of human trafficking, both here on the blog and also through her recently published monograph,A Vulnerable World.(For those of you who don’t have a copy, you can pick up a paperback version atthe Acton Bookshop; a Kindle version is available as well.) As Elise was doing the...
Why Baptists Loved Thomas Jefferson
Thomas Jefferson was a Deist who famously cut and pasted, with a razor and glue, his own version of the New Testament to remove all the miracles of Jesus and any reference to his Resurrection. So why did Baptists in New England cheer when he won the presidency and claim he had won a providential victory over John Adams? As Thomas S. Kidd and Barry Hankins explain, despite their differences the Baptists were able to mon cause with Jefferson on...
Why It’s Every Citizen’s Job to Interpret the Constitution
A few days ago I mentioned Michael Stokes Paulsen’s crash course on how to interpret the Constitution. Paulsen outlined five techniques of constitutional interpretation that courts mentators employ: (1) arguments from the straightforward, natural, original linguistic meaning of the text; (2) arguments from the structure, logic, and relationships created by the document as a whole; (3) arguments from history, original intention, or purposes behind an enacted text; (4) arguments from precedent; and (5) arguments from policy. Today, Paulsen has another...
Why Don’t City Governments Increase Minimum Wages Now Instead of in 2020?
Many of the current debates about minimum wage revolve around whether such laws increase unemployment. Such disputes often make it appear that there is a lack of consensus on the issue when, in fact, there is broad-based agreement. For example there are two groups who clearly understand the connection between government-mandated wage floors and unemployment of low-skilled workers: right-leaning economists and left-leaning politicians. Conservative and libertarian economists are frequently vocal in their opposition to the minimum wage because they know...
Vatican Conference Focuses On Women And Sustainable Development
The Pontifical Council of Justice and Peace, the World Union of Catholic Women’s Organizations and the World Women’s Alliance for Life and Family are currently meeting in Rome to discuss the role of women and global sustainable development. Cardinal Peter Turkson, president of the Pontifical Council of Justice and Peace, told Vatican News that he considered 2015 to be a crucial year for this issue. With the U.N. Millenium Development goals expiring this year, and new Sustainable Development goals to...
Related Classification
Copyright 2023-2026 - www.mreligion.com All Rights Reserved