# Which is more important to the economy, government or private sector? **URL:** \ **Category:** Great Debates\ **Created:** [June 18, 2016, 8:06pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724 "2016-06-18T20:06:13Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Starving\_Artist](https://avatars.discourse-cdn.com/v4/letter/s/aeb1de/32.png) [@Starving\_Artist](https://boards.straightdope.com/u/Starving_Artist)\ **Post date:** [June 19, 2016, 12:32pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/21 "2016-06-19T12:32:42Z")
> [@septimus](#): > > These comments are bizarrely wrong on multiple grounds. Let me help you step by step. > > - \*“very little.” \* Was the Interstate Highway System little? How about the Apollo moon-landing program? This comment by **panache45** was so supremely wrong, he’ll find some other basis to quibble than size or wealth. For example, he may claim that the Moon landing lacked value in a way that privately-created sports events do not; that if the Moon landing has any entertainment value … Ah, I’ll just let **panache45** hoist his own petard. > > - _“would have been created anyway.”_ So, without government we’d have gotten our highways? Sooner and better, I suppose? And if only the U.S.A. were a libertarian anarchy in 1941, the forces of free enterprise would have defeated Hitler sooner and better? I’m sorry — I just can’t refute you, **panache45** — whenever I contemplate your claim I just burst out laughing. > > - _“doesn’t create wealth”_ Perhaps we need to start with a definition of wealth. I guess, according to Mr. Artist, infrastructure like pipelines and wires built by private companies are “wealth” but highways built by the government are not? > > _“redistributes it”_ When an employee of Pepsico buys an iPhone, money is being transferred, in steps, from Pepsi to Apple. What else is new? > > _“Where do you think those government funds come from if not from those engaged in free enterprise?”_ And Apple’s money comes from Pepsi. And Pepsi gets revenue by selling soft drinks to government employees. > > I could go on, demonstrating the absurdity of these under-informed complaints. But it seems more generous to first give anti-government nuts a chance to improve their “arguments.” You hardly have room to be calling anyone’s arguments bizarre. In the first place, “wealth” generally refers to the value of one’s holdings, not to the holdings themselves. In other words, a person’s car may be a part of his wealth, but virtually nobody would say his car is wealth. Same with his house or his boat or his furniture. So for that reason, no, Mr. Artist does not contend that pipelines and wires are wealth. Nor does he agree that highways and dams are wealth. In combination with other assets these items constitute wealth, but they aren’t wealth on their own according to any normal and logical use of the term. But be that as it may, you’re missing the point entirely, which is that government doesn’t generate money (or ‘funds’, as you put it) on its own. The money it uses to build highways and dams and everything else it pays for has been taken from people who earned it originally in the free market. I don’t believe for a minute you don’t know this. Further, when a Pepsico employee buys an iPhone, he’s making the decision to part with his money voluntarily in order to receive a specific item which he feels is worth the trade-off. It’s a voluntary transfer of money in which both parties feel the exchange is worthwhile. The money the government takes in is a transfer made under pain of law, in which the payor has no control over what it buys or how it’s spent. He makes his transfer primarily in order to stay out of jail, and as such it’s an involuntary transfer. So while it’s true that in both cases money gets transferred, the similarity pretty much ends there. And of course the fact that in both cases money gets transferred is completely beside the point and meaningless. Free enterprise creates wealth and grows the economy. Government regulates free enterprise and takes from it’s participants the funds it needs to finance its expenditures. This is unquestionable. I can’t imagine why you seem think you’re going to accomplish some sort of point by trying to refute it. ---
**Author:** ![Pearl\_Clutching\_Provocateur](https://avatars.discourse-cdn.com/v4/letter/p/c68b51/32.png) [@Pearl\_Clutching\_Provocateur](https://boards.straightdope.com/u/Pearl_Clutching_Provocateur)\ **Post date:** [June 19, 2016, 12:55pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/22 "2016-06-19T12:55:42Z")
> [@adaher](#): > > Private sector, no question, although it’s kinda like asking if a pitcher is more important to a team than an umpire. As an earlier poster said, without a government you can’t have much of a private sector, but the private sector does all the real work. The government sets the ground rules. Having government do too much is kinda like winning games with paid off umpires. Or at least umpires that definitely prefer a certain team to win. But all of the real action and innovation is by the players. This is an excellent analogy. I plan to steal it for future use.:D:D:D ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [June 19, 2016, 12:58pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/23 "2016-06-19T12:58:56Z")
> [@Starving\_Artist](#): > > You hardly have room to be calling anyone’s arguments bizarre. In the first place, “wealth” generally refers to the value of one’s holdings, not to the holdings themselves… > But be that as it may, you’re missing the point entirely, which is that government doesn’t generate money (or ‘funds’, as you put it) on its own… I don’t believe for a minute you don’t know this. Further, when a Pepsico employee buys an iPhone, he’s making the decision to part with his money voluntarily …The money the government takes in is a transfer made under pain of law, in which the payor … makes his transfer primarily in order to stay out of jail,… > > And of course the fact that in both cases money gets transferred is completely beside the point and meaningless. Free enterprise creates wealth and grows the economy. Government regulates free enterprise and takes from it’s participants the funds it needs to finance its expenditures. This is unquestionable. I can’t imagine why you seem think you’re going to accomplish some sort of point by trying to refute it. I’m not going to answer your post point by point. Every single point you make is either wrong or irrelevant. For one thing, you _define_ wealth as _individually-owned_ wealth and then delight in the tautology that government-owned wealth is, by definition, not wealth. 😃 Moreover you take pleasure that the government extracts its income at gunpoint, while Madoff’s investors relinquished their wealth voluntarily. Even if valid, this would be completely irrelevant. I’ll leave you with one very simple question. Consider it objectively and learn. Or prattle about the eevul gummint stealing from you at gunpoint and remain ignorant. _**Did it grow the economy (and lead to continued growth) when government built the Golden Grate Bridge? How about the Panama Canal?**_ ---
**Author:** ![Velocity](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/velocity/32/18006_2.png) [@Velocity](https://boards.straightdope.com/u/Velocity)\ **Post date:** [June 19, 2016, 1:04pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/24 "2016-06-19T13:04:03Z")
> [@kunilou](#): > > Define “important.” > > The private sector operates within a framework established by the government, so from that point of view, obviously the government is essential. > > However, the private sector is much larger than all the government spending put together, so from that point of view, the private sector is more important. This. ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [June 19, 2016, 1:09pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/25 "2016-06-19T13:09:41Z")
How about the Bridge to Nowhere, or airports where almost no planes land, or bases the military doesn’t want or need, or benefits that encourage people not to work? Unlike Starving Artist I haven’t disputed that the government does create wealth. I just think it gets far less bang for the buck than your average private citizen just making everyday decisions. That’s because a citizen a) buys what they need or want, whereas government buys what will do officeholders the most political good, and b) citizens have limited resources and know it, whereas government doesn’t consider financial realities unless the deficit gets out of control. Milton Friedman observed that there are four ways to spend money: 1. Money you made, spending on yourself 2. Money you made, spending on someone else 3. Money that you got from someone else, spending it on yourself 4. Money that you got from someone else, spending it on someone else The first case is where you will tend to spend the most wisely. Even if you’re not good with money, you’re going to spend your own money on something you know you want or need. The last case is where you will have the least concern for your spending. It’s not your money, and someone else is getting the benefit. ---
**Author:** ![The\_Other\_Waldo\_Pepper](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/the_other_waldo_pepper/32/12370_2.png) [@The\_Other\_Waldo\_Pepper](https://boards.straightdope.com/u/The_Other_Waldo_Pepper)\ **Post date:** [June 19, 2016, 1:16pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/26 "2016-06-19T13:16:59Z")
> [@septimus](#): > > Moreover you take pleasure that the government extracts its income at gunpoint, while Madoff’s investors relinquished their wealth voluntarily. Even if valid, this would be completely irrelevant. That does bring something to mind, though. Consider prison labor, where the government puts inmates to work on, say, a farm; does that count as creating wealth? [Wiki](https://en.m.wikipedia.org/wiki/Federal_Prison_Industries) says that federal prisoners are currently producing everything from furniture to clothing to electronics; it’s worked down in the mines, it’s worked out in lumber yards; is that industry? ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [June 19, 2016, 1:22pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/27 "2016-06-19T13:22:50Z")
Slave labor is definitely industry. It fed our country for quite some time, actually. It’s not the most efficient industry around though. Incentives matter. They explain nearly everything in economics. A person working to better themselves will be a far better worker than someone with no stake. Do you think many slaves offered suggestions on how to produce more? I’m sure some did, but not many, for obvious reasons. We also didn’t see that much in the Soviet Union. When a worker did do something like that and increased his productivity by triple, he became such a sensation that the Soviet press tried to make a positive example of him and the idea of innovating more efficient practices was even named after him. But not many are willing to drink the Kool-aid and work just to make the masters happy, which is why the Soviet press had to make a huge national story about something that happens in every half decent workplace every day in the free world. ---
**Author:** ![The\_Other\_Waldo\_Pepper](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/the_other_waldo_pepper/32/12370_2.png) [@The\_Other\_Waldo\_Pepper](https://boards.straightdope.com/u/The_Other_Waldo_Pepper)\ **Post date:** [June 19, 2016, 1:30pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/28 "2016-06-19T13:30:17Z")
> [@adaher](#): > > Slave labor is definitely industry. It fed our country for quite some time, actually. It’s not the most efficient industry around though. Still, it’s something to keep in mind when someone starts tossing around the flat claim that _“government doesn’t create wealth, it redistributes it.”_ ---
**Author:** ![adaher](https://avatars.discourse-cdn.com/v4/letter/a/dec6dc/32.png) [@adaher](https://boards.straightdope.com/u/adaher)\ **Post date:** [June 19, 2016, 1:41pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/29 "2016-06-19T13:41:26Z")
It does create wealth, but mostly it redistributes, because the first rule of government allocation of taxpayer money is, “What’s in it for the people voting on how to spend it?” It’s actually one of the few areas where democracy is bad. Our money is spent most efficiently when unelected bureaucrats are allocating it. Then at least it’s about where the government perceives need. When Congressmen have direct control, they just build in their districts, whether or not the district needs whatever is being built, or whether or not a nearby district might need it more. It wouldn’t surprise me in the future to see all tax and spending decisions to end up in the Fed’s lap. ---
**Author:** ![panache45](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/panache45/32/64_2.png) [@panache45](https://boards.straightdope.com/u/panache45)\ **Post date:** [June 19, 2016, 1:42pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/30 "2016-06-19T13:42:59Z")
> [@septimus](#): > > - \*“very little.” \* Was the Interstate Highway System little? How about the Apollo moon-landing program? This comment by **panache45** was so supremely wrong, he’ll find some other basis to quibble than size or wealth. For example, he may claim that the Moon landing lacked value in a way that privately-created sports events do not; that if the Moon landing has any entertainment value … Ah, I’ll just let **panache45** hoist his own petard. Interesting how you put words in my mouth, then criticize me for those very words. The moon landing – which I never mentioned – was a supreme achievement which I supported at the time. But not for economic reasons, which is what this thread is about. Space travel would have happened without the government, in due time, but not in time for the government’s irrational space race. But again, that isn’t what this thread is about. > [@](#): > > - _“would have been created anyway.”_ So, without government we’d have gotten our highways? Sooner and better, I suppose? And if only the U.S.A. were a libertarian anarchy in 1941, the forces of free enterprise would have defeated Hitler sooner and better? I’m sorry — I just can’t refute you, **panache45** — whenever I contemplate your claim I just burst out laughing. Once again, you put words in my mouth, then criticize me for those words. First, I am not a libertarian anarchist, so please don’t criticize me as one. Second, fighting a war may be a totally proper activity of the government, and totally improper for private citizens . . . but not for economic reasons. Contrary to what some people think, war is not good for an economy, it’s a drain on it. ---
**Author:** ![Oredigger77](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/oredigger77/32/3181_2.png) [@Oredigger77](https://boards.straightdope.com/u/Oredigger77)\ **Post date:** [June 19, 2016, 2:21pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/31 "2016-06-19T14:21:22Z")
I really like the baseball analogy above. The players are private industry and the umps are the government. There is no reason to go see a game with out the players but the umps only matter if you care how exactly they follow the rules. The players are much more important. The government doesn’t add to the economy it is just there to help it function more efficiently wether it is by building infrastructure to allow for ease of transit or by regulations such that the populace can have greater trust in what they are buying. Greater efficiency is a good and important thing but the economy would exist in much better shape without the government than without private industry. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [June 19, 2016, 2:36pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/32 "2016-06-19T14:36:14Z")
> [@panache45](#): > > Interesting how you put words in my mouth, then criticize me for those very words. The moon landing … I didn’t put words in your mouth. You wrote “Government creates very little wealth; all it mostly does is redistribute what has been created in the private sector.” I asked you — and you still haven’t answered — whether the highway system is “little.” If you answer that “all it did” was redistribute money from taxpayers to road builders, explain how that differs fundamentally from a private company collecting money from gasoline sales and distributing it to well owners. ---
**Author:** ![Revenant\_Threshold](https://avatars.discourse-cdn.com/v4/letter/r/f1d935/32.png) [@Revenant\_Threshold](https://boards.straightdope.com/u/Revenant_Threshold)\ **Post date:** [June 19, 2016, 2:40pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/33 "2016-06-19T14:40:35Z")
> [@Oredigger77](#): > > I really like the baseball analogy above. The players are private industry and the umps are the government. There is no reason to go see a game with out the players but the umps only matter if you care how exactly they follow the rules. The players are much more important. Eh, I don’t know. With no rules, there’s no guarantee I’m going to get to see a game of baseball and not the pitcher beaning the batters at every opportunity, followed by a fight that ends the game since there’s no-one there to get them to stop. I’m not getting baseball either way. ---
**Author:** ![octopus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/octopus/32/3716_2.png) [@octopus](https://boards.straightdope.com/u/octopus)\ **Post date:** [June 19, 2016, 4:09pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/34 "2016-06-19T16:09:58Z")
> [@Starving\_Artist](#): > > You hardly have room to be calling anyone’s arguments bizarre. In the first place, “wealth” generally refers to the value of one’s holdings, not to the holdings themselves. In other words, a person’s car may be a part of his wealth, but virtually nobody would say his car is wealth. Same with his house or his boat or his furniture. So for that reason, no, Mr. Artist does not contend that pipelines and wires are wealth. Nor does he agree that highways and dams are wealth. In combination with other assets these items constitute wealth, but they aren’t wealth on their own according to any normal and logical use of the term. > > But be that as it may, you’re missing the point entirely, which is that government doesn’t generate money (or ‘funds’, as you put it) on its own. The money it uses to build highways and dams and everything else it pays for has been taken from people who earned it originally in the free market. I don’t believe for a minute you don’t know this. Further, when a Pepsico employee buys an iPhone, he’s making the decision to part with his money voluntarily in order to receive a specific item which he feels is worth the trade-off. It’s a voluntary transfer of money in which both parties feel the exchange is worthwhile. The money the government takes in is a transfer made under pain of law, in which the payor has no control over what it buys or how it’s spent. He makes his transfer primarily in order to stay out of jail, and as such it’s an involuntary transfer. So while it’s true that in both cases money gets transferred, the similarity pretty much ends there. > > And of course the fact that in both cases money gets transferred is completely beside the point and meaningless. Free enterprise creates wealth and grows the economy. Government regulates free enterprise and takes from it’s participants the funds it needs to finance its expenditures. This is unquestionable. I can’t imagine why you seem think you’re going to accomplish some sort of point by trying to refute it. Actually the car itself is the wealth. A bushel of corn is wealth. The currency value of wealth is a different and sometimes problematic metric. Even without currency being invented. The tribe with 20 cows and 40 swords is wealthier than the tribe with 2 cows and 8 swords. ---
**Author:** ![Cheesesteak](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cheesesteak/32/3694_2.png) [@Cheesesteak](https://boards.straightdope.com/u/Cheesesteak)\ **Post date:** [June 20, 2016, 9:40am UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/35 "2016-06-20T09:40:52Z")
The private sector is what the government allows it to be. All the “private sector does this” and “private sector does that” depends a great deal on whether or not you’re in the US, France, Mexico, 1960’s USSR or Cuba. You can have all the shale oil in the world, but if the government doesn’t let you tap it, it’s just a bunch of oily rocks. You can have the greatest idea for a website, but if you live in Cuba, you may not have the opportunity to create it. You can build an efficient factory, but if your Mexican workers can’t get to work without being killed by drug cartels, you’re shut down before you open. ---
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [June 20, 2016, 12:55pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/36 "2016-06-20T12:55:05Z")
> [@Cheesesteak](#): > > The private sector is what the government allows it to be. All the “private sector does this” and “private sector does that” depends a great deal on whether or not you’re in the US, France, Mexico, 1960’s USSR or Cuba. > > You can have all the shale oil in the world, but if the government doesn’t let you tap it, it’s just a bunch of oily rocks. You can have the greatest idea for a website, but if you live in Cuba, you may not have the opportunity to create it. You can build an efficient factory, but if your Mexican workers can’t get to work without being killed by drug cartels, you’re shut down before you open. That’s true, but it is sort of beside the point. The government can actively support and regulate, or oppose and suppress, the private sector, but it is always acting for or against something that comes before it. You can have private sector economic activity without a government, or even against the government’s will. That is why the USSR had such a large black market. It doesn’t always work as well as it would a regulated free market, but it can and does exist. You can’t really have much of a government unless there is a private sector to supply the money for the government to use. Regards, Shodan ---
**Author:** ![panache45](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/panache45/32/64_2.png) [@panache45](https://boards.straightdope.com/u/panache45)\ **Post date:** [June 20, 2016, 1:13pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/37 "2016-06-20T13:13:19Z")
> [@Revenant\_Threshold](#): > > Eh, I don’t know. With no rules, there’s no guarantee I’m going to get to see a game of baseball and not the pitcher beaning the batters at every opportunity, followed by a fight that ends the game since there’s no-one there to get them to stop. I’m not getting baseball either way. But I’d rather watch a game with just players than a game with just umpires. ---
**Author:** ![WillFarnaby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/willfarnaby/32/514_2.png) [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)\ **Post date:** [June 20, 2016, 1:17pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/38 "2016-06-20T13:17:44Z")
> [@septimus](#): > > I didn’t put words in your mouth. You wrote “Government creates very little wealth; all it mostly does is redistribute what has been created in the private sector.” I asked you — and you still haven’t answered — whether the highway system is “little.” > > If you answer that “all it did” was redistribute money from taxpayers to road builders, explain how that differs fundamentally from a private company collecting money from gasoline sales and distributing it to well owners. Coercion vs no coercion. Preference is demonstrated in a voluntary transaction. ---
**Author:** ![WillFarnaby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/willfarnaby/32/514_2.png) [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)\ **Post date:** [June 20, 2016, 1:19pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/39 "2016-06-20T13:19:14Z")
> [@Cheesesteak](#): > > The private sector is what the government allows it to be. All the “private sector does this” and “private sector does that” depends a great deal on whether or not you’re in the US, France, Mexico, 1960’s USSR or Cuba. > > You can have all the shale oil in the world, but if the government doesn’t let you tap it, it’s just a bunch of oily rocks. You can have the greatest idea for a website, but if you live in Cuba, you may not have the opportunity to create it. You can build an efficient factory, but if your Mexican workers can’t get to work without being killed by drug cartels, you’re shut down before you open. Psst. Drug cartels couldn’t exist without government. ---
**Author:** ![WillFarnaby](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/willfarnaby/32/514_2.png) [@WillFarnaby](https://boards.straightdope.com/u/WillFarnaby)\ **Post date:** [June 20, 2016, 1:22pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/40 "2016-06-20T13:22:21Z")
Production precedes predation. There can’t be a government taking from producers without there being producers. The “private” sector is indispensable to government. The fact that government has monopolized essential services like transportation does not change this basic truth. [Previous page](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724.md?page=1) [Next page](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724.md?page=3)