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 4:34 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
Reining in the EPA’s regulatory overreach
President Donald Trump turned heads and drew criticisms for his efforts to curb the regulatory reach of the Environmental Protection Agency. With the appointment of Scott Pruitt to lead the agency, Trump has vowed to create a leaner bureaucracy by requiring agencies to repeal two regulations for each new regulation enacted. This, however, is no small task considering the sheer number of regulations left behind by previous administrations. The Obama administration—which broke the record for the most rules and regulations...
How Genesis ties Christianity to economics and business
Many Christians have a distant, even negative, view of economics and business. Pastors discuss the need for moral activity within the business world, but often ignore whether business in itself is morally justifiable. Some even assume that business activity is a sort of necessary evil; that economics is an academic discipline with little connection to their faith, and often church leaders support economic proposals without understanding plexity of the issues involved. This harms the witness of the Church. In his...
Understanding the President’s Cabinet: OMB Director
Note: This is the post #22 in a weekly series of explanatory posts on the officials and agencies included in the President’s Cabinet. See the series introductionhere. Cabinet position:Director of the Office of Management and Budget Department: Office of Management and Budget (OMB) Current Director:Mick Mulvaney Department Mission:“The Office of Management and Budget (OMB) serves the President of the United States in overseeing the implementation of his vision across the Executive Branch. Specifically, OMB’s mission is to assist the President...
Neamtu: Choose the ‘Soros infantry’ or Tocqueville’s vision
George Soros is synonymous with a well-funded, highly partisan brand of “philanthropy,” which begs the question: Why are U.S. taxpayers underwriting it? During the Obamaadministration, USAID granted Soros’ Foundation Open Society-Macedonia (FOSM) and its counterparts$4.8 million,earmarking an additional$9.5 millionthrough2021. Macedonia’s center-Right president, Gjorge Ivanov,has charged Soros’organizations with rallying to destabilize his government and askedwhyAmerican foreign aid is attemptingto foist unpopular, EU-centric policies on his nation. One Macedonian official called these groups “the Soros infantry.” In a fascinatingnew essayfor Religion &...
Are slums a sign of human creativity and potential?
As humans, we are made in the image of God. We are co-creators, fashioned to produce and create, contribute and collaborate, give and receive, trade and exchange. Yet far too often, in our approaches to fighting poverty, we subscribe to a fundamental distortion of this reality, treating humans as mere consumers and“drains” on wealth and resources. In the context of poverty, this quickly leads to treating people as the problem, not the solution. “When we put the person at the...
Why Seattle’s minimum wage law is now destroying wages
“The city of Seattle has the highest minimum wage in the United States,” notes Dylan Pahman in this week’s Acton Commentary. “While economists and policy-makers continue to debate the issue, a recent working paper from researchers at the University of Washington (UW) raises serious questions about the effectiveness of minimum wage hikes.” In short, the study concludes that the “increase to $13 reduced hours worked in low-wage jobs by around 9 percent, while hourly wages in such jobs increased by...
Families with stay-at-home moms pay 5-times more taxes in this nation
U.S. taxpayers are familiar with marriage penalty, but it is not merely a problem facing American families. In the Netherlands, afamily with a stay-at-home mother could pay more than 560 percent more in taxes than an identical family making the exact same e. Ironically, the Dutch tax code treats families with es in vastly disparate ways in the name of equality, explains Arnold Huijgen, Ph.D., in a new essay for Religion & Liberty Transatlantic. This bizarre state of affairs e...
How God makes a smartphone
“Everybody has a cell phone,” Steve Jobs told John Lasseter, chief creative officer at Pixar, “but I don’t know one person who likes their cell phone.” The frustrated CEO of Apple decided to do something about the problem, which lead to one of the greatest products of the modern age. Ten years ago today he released the first version of the famed iPhone. Jobs didn’t invent the smartphone. And while he was the guiding force behind the iPhone, he really...
We now have proof higher minimum wages hurt the poor
In 2014 the city of Seattle announced it would be raising the minimum wage to $15 per hour. The minimum wage would increase from the state’s $9.47 minimum to as high as $11 on April 1, 2015. The second phase-in period started on January 1, 2016, when the minimum wage reached $13 for large employers. Under the law, by 2021 all businesses must raise the minimum wage for theirworkers to $15. At the time I noted that while this policy...
Joe Carter: Justice Gorsuch a ‘champion of religious freedom’
On Monday, June 26, the Washington Examinerpublished an article by Ryan Lovelace titled “Conservatives cheer Gorsuch amid flurry of decisions on final day of Supreme Court term.” After concurring with Chief Justice John Roberts on Trinity Lutheran v. Comer, a 7-2 decisionin favor of a church preschool in Missouri,Justice Neil Gorsuch leaves his firsttwo months inthe high court with the approval of many conservatives. In the article, Joe Carter, a senior editor at the Acton Institute, applauds Gorsuch: In his...
Related Classification
Copyright 2023-2026 - www.mreligion.com All Rights Reserved