# 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:** 3
**Author:** ![iiandyiiii](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/iiandyiiii/32/7924_2.png) [@iiandyiiii](https://boards.straightdope.com/u/iiandyiiii)\ **Post date:** [June 20, 2016, 1:22pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/41 "2016-06-20T13:22:50Z")
> [@WillFarnaby](#): > > Psst. Drug cartels couldn’t exist without government. Right… in anarchy, it’s not possible that a group of assholes could get together and rule territory by force and threats, right? Not like that’s ever happened. ---
**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, 1:24pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/42 "2016-06-20T13:24:26Z")
> [@iiandyiiii](#): > > Right… in anarchy, it’s not possible that a group of assholes could get together and rule territory by force and threats, right? Not like that’s ever happened. Did I say a group of assholes couldn’t exist? If so thanks for the correction! The group of assholes you talk about eventually becomes the state if unchecked. They adopt democracy if it casts an effective veil on their nature as exploiters. ---
**Author:** ![andros](https://avatars.discourse-cdn.com/v4/letter/a/e480ec/32.png) [@andros](https://boards.straightdope.com/u/andros)\ **Post date:** [June 20, 2016, 1:28pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/43 "2016-06-20T13:28:35Z")
Are you somehow assuming that drug cartels could not exist without prohibition? Because that’s silly. So is this hijack, sorry. ---
**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, 1:30pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/44 "2016-06-20T13:30:59Z")
> [@andros](#): > > Are you somehow assuming that drug cartels could not exist without prohibition? Because that’s silly. > > So is this hijack, sorry. Cartels cannot exist on the free market. They have never existed without a helping hand from government. ---
**Author:** ![Death\_of\_Rats](https://avatars.discourse-cdn.com/v4/letter/d/a6a055/32.png) [@Death\_of\_Rats](https://boards.straightdope.com/u/Death_of_Rats)\ **Post date:** [June 20, 2016, 2:05pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/45 "2016-06-20T14:05:46Z")
> [@iiandyiiii](#): > > Right… in anarchy, it’s not possible that a group of assholes could get together and rule territory by force and threats, right? Not like that’s ever happened. There would not be assholes getting together and ruling territory that is Government and an end to the anarchy. Nothing in the private sector would exist without Government. Government is the most basic ingredient to forming a society. Even lower forms of animals have Government. Everywhere you have more than two life forms living together there are rules that are established for both to exist. That is Government. I like the baseball analogy, too. But that Anti-government types understand it wrong. It is not Players and Umpires. It is players and the rules that define the game. The Umpires are just a tool of enforcement. Without Government you would have a bunch of players with no rules on what they can do with a bat or how you can use the ball or how you identify the people on your team from the people you are playing against, or what constitutes a foul or how a foul is enforced or punished or how a point is determined or who will keep score or how a score is determined, or when does the game end or who wins. That is all Government. Taxes are not “taking from the private sector by gunpoint” they are the price we all willingly pay to exist in a society. ---
**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 20, 2016, 2:14pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/46 "2016-06-20T14:14:11Z")
> [@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. Sure, but just like the real world most regulation is self-regulation and you still see multiple beaning followed by a fight even with the umps. The reason that proper safety devices are installed on oil wells is rarely because a government inspector forces an oil company to do it, most of the time it is because the engineer doesn’t want to be responsible for killing people and destroying the environment. In fact I normally operated in excess of the regulations because I did not believe they met my safety requirements. On the other hand one of my designs were derated by my boss to meet federal standards after fighting for a couple of weeks I quit rather then be responsible for the operation, they had a problem and it took three weeks to make the location safe again, luckily no one was hurt or killed. ---
**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, 2:38pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/47 "2016-06-20T14:38:49Z")
> [@Death\_of\_Rats](#): > > There would not be assholes getting together and ruling territory that is Government and an end to the anarchy. Nothing in the private sector would exist without Government. Government is the most basic ingredient to forming a society. Even lower forms of animals have Government. Everywhere you have more than two life forms living together there are rules that are established for both to exist. That is Government. > > I like the baseball analogy, too. But that Anti-government types understand it wrong. It is not Players and Umpires. It is players and the rules that define the game. The Umpires are just a tool of enforcement. Without Government you would have a bunch of players with no rules on what they can do with a bat or how you can use the ball or how you identify the people on your team from the people you are playing against, or what constitutes a foul or how a foul is enforced or punished or how a point is determined or who will keep score or how a score is determined, or when does the game end or who wins. That is all Government. > > Taxes are not “taking from the private sector by gunpoint” they are the price we all willingly pay to exist in a society. The baseball analogy is fine. There are thousands of baseball games being played without umpires every year. Everyone has a good time. They demonstrate their preference for playing the game without paying for an umpire by their actions. If an umpire showed up and demanded that he be paid in order to continue playing the game, they would have to play illegally, or pay the ump his tax. This does not represent a preference for the ump because it was a coerced action. The rules of the game are law, and decided upon voluntarily by the players. Government issues legislation. I suggest you see Hayek on the difference here, he will help you out a great deal. The private sector includes black market activities. You claim nothing in the private sector could exist without government. There is no need for hypothetical, the claim is wrong in the current environment. My claim that government could not exist without the private sector is untouched, however. How is the government funded before production? Demonstrate with an example please. ---
**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 20, 2016, 3:24pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/48 "2016-06-20T15:24:26Z")
> [@WillFarnaby](#): > > My claim that government could not exist without the private sector is untouched, however. How is the government funded before production? Demonstrate with an example please. A soft drink company can’t be funded unless its customers are funded by other production. (Moneyless people don’t buy soft drinks.) And, BTW, people who want to put gasoline in their cars are effectively _coerced_ into buying gasoline from one of a small number of companies. You can quibble. I’ll save a boring round of rejoinder by stipulating: _No one forced you to buy a Pepsi at gun-point_. Your town has two different brands of gasoline for sale, _but only one brand of IRS agent is available to you_. And yes, Virginia, there are important differences between private and public enterprises. _ **However, your dogmatic insistence on positing a stark and false dichotomy — like the difference between day and night — between all aspects of government and private enterprise is a huge impediment to understanding.** _ Hope this helps. Despite that I find your pedantic black-and-white model to go beyond silliness, I suspect that you are better informed on economics than some others in this thread. How do you answer my question? Did the construction of the Highway System “add wealth” to the U.S. economy? ---
**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, 3:57pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/49 "2016-06-20T15:57:52Z")
> [@septimus](#): > > A soft drink company can’t be funded unless its customers are funded by other production. (Moneyless people don’t buy soft drinks.) And, BTW, people who want to put gasoline in their cars are effectively _coerced_ into buying gasoline from one of a small number of companies. > > You can quibble. I’ll save a boring round of rejoinder by stipulating: _No one forced you to buy a Pepsi at gun-point_. Your town has two different brands of gasoline for sale, _but only one brand of IRS agent is available to you_. And yes, Virginia, there are important differences between private and public enterprises. > > _ **However, your dogmatic insistence on positing a stark and false dichotomy — like the difference between day and night — between all aspects of government and private enterprise is a huge impediment to understanding.** _ Hope this helps. > > Despite that I find your pedantic black-and-white model to go beyond silliness, I suspect that you are better informed on economics than some others in this thread. > How do you answer my question? Did the construction of the Highway System “add wealth” to the U.S. economy? If you want to play with words, I can be clearer. Coercion, for advocates of capitalism, is the use or threat of physical violence. The highways did not “add wealth” in that resources were redirected from avenues (no pun intended) of voluntary exchange and into avenues that were not voluntary. Since the diversion of these resources was not voluntary, it cannot be said beyond mere speculation that wealth was added. You could speculate, as you apparently do, that the producers value the roads more highly than they value the funds taken from them and therefore wealth has been “added”, but this is not scientific and is not economics. Economics deals with observable preferences demonstrated through human action. Is it plausible that your speculation is correct? Probably moreso than speculation that “free college for all” adds wealth, but not by much. ---
**Author:** ![iiandyiiii](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/iiandyiiii/32/7924_2.png) [@iiandyiiii](https://boards.straightdope.com/u/iiandyiiii)\ **Post date:** [June 20, 2016, 4:15pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/50 "2016-06-20T16:15:47Z")
> [@WillFarnaby](#): > > Did I say a group of assholes couldn’t exist? If so thanks for the correction! > > The group of assholes you talk about eventually becomes the state if unchecked. They adopt democracy if it casts an effective veil on their nature as exploiters. First you said that drug cartels can’t exist without government. Now you’re saying that they essentially become government (as seems to be true in parts of Mexico in which the national government has virtually no influence and power). Which is it? ---
**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, 4:22pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/51 "2016-06-20T16:22:58Z")
> [@iiandyiiii](#): > > First you said that drug cartels can’t exist without government. Now you’re saying that they essentially become government (as seems to be true in parts of Mexico in which the national government has virtually no influence and power). Which is it? Cartels cannot exist without government. I said the group of assholes that you were talking about could become a government if they aren’t resisted. ---
**Author:** ![iiandyiiii](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/iiandyiiii/32/7924_2.png) [@iiandyiiii](https://boards.straightdope.com/u/iiandyiiii)\ **Post date:** [June 20, 2016, 4:31pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/52 "2016-06-20T16:31:26Z")
> [@WillFarnaby](#): > > Cartels cannot exist without government. > > I said the group of assholes that you were talking about could become a government if they aren’t resisted. But in an environment with no government, such a group of assholes could get together and form a cartel. What would stop them? ---
**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 20, 2016, 7:02pm UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/53 "2016-06-20T19:02:58Z")
> [@panache45](#): > > But I’d rather watch a game with just players than a game with just umpires. In the scenario I suggested, there is no game, just a few pitches followed by a brawl. Which might well be very popular, for all I know, but if you’re wanting baseball you’re just as out of luck as if umpires are the only ones out there. > [@Oredigger77](#): > > Sure, but just like the real world most regulation is self-regulation and you still see multiple beaning followed by a fight even with the umps. The reason that proper safety devices are installed on oil wells is rarely because a government inspector forces an oil company to do it, most of the time it is because the engineer doesn’t want to be responsible for killing people and destroying the environment. I’d need to see a cite for “most regulation is self-regulation”. And in the real world even the old base-clearing brawl is something of a show now. No-one wants to get a suspension or a ban or a fine. Take the regulatory consequences out of the picture, and I think those brawls would be more violent. > [@](#): > > In fact I normally operated in excess of the regulations because I did not believe they met my safety requirements. On the other hand one of my designs were derated by my boss to meet federal standards after fighting for a couple of weeks I quit rather then be responsible for the operation, they had a problem and it took three weeks to make the location safe again, luckily no one was hurt or killed. So here is an example where you as a safety conscious person quit rather than allow something dangerous to happen under your watch, and your boss, a non-safety-conscious person, was perfectly fine not worrying about safety and allowed a problem to occur which could have resulted in injury. In our regulation-free theoretical world, how do we ensure that it’s _you_ in charge and not your boss? As you point out, in a world _with_ regulations, poorly safety-conscious or simply uncaring or unaware people can have the determining say in what goes on. If there’s a problem even with regulation, why shouldn’t we expect to see more problems without it? ---
**Author:** ![tomndebb](https://avatars.discourse-cdn.com/v4/letter/t/b9e5f3/32.png) [@tomndebb](https://boards.straightdope.com/u/tomndebb)\ **Post date:** [June 21, 2016, 2:54am UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/54 "2016-06-21T02:54:56Z")
> [@WillFarnaby](#): > > The highways did not “add wealth” in that resources were redirected from avenues (no pun intended) of voluntary exchange and into avenues that were not voluntary. Since the diversion of these resources was not voluntary, it cannot be said beyond mere speculation that wealth was added. Actually, it can be stated with complete confidence that the presence of the highway system, (and the rail and canal systems that preceded it), provided the means by which wealth could be generated. No one is producing “wealth” who cannot transport one’s goods to a market. And it is notable that no system of canals, railways, or roadways was ever built without government involvement. If such systems of transportation could have been built without government involvement, one would expect to find at least one, in the world, that was so constructed, yet none were. Even the use of the seas, much more conducive to private investment, relied heavily upon governments to provide aids to navigation, “rules of the road,” dredging of waterways, etc. Again, if private investment would have been so much superior to government intervention, it is surely remarkable that it has never occurred. ---
**Author:** ![tomndebb](https://avatars.discourse-cdn.com/v4/letter/t/b9e5f3/32.png) [@tomndebb](https://boards.straightdope.com/u/tomndebb)\ **Post date:** [June 21, 2016, 2:57am UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/55 "2016-06-21T02:57:32Z")
> [@septimus](#): > > But it seems more generous to first give anti-government nuts a chance to improve their “arguments.” Do not refer to your opponents in debate as “nuts.” [/Moderating] ---
**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 21, 2016, 6:49am UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/56 "2016-06-21T06:49:56Z")
The question, though, is whether government or the private sector is \*more important \*to the economy. We shouldn’t be arguing for or against the positions of complete absence of either. Nor should non-economical factors be relevant. ---
**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 21, 2016, 7:12am UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/57 "2016-06-21T07:12:25Z")
> [@panache45](#): > > The question, though, is whether government or the private sector is \*more important \*to the economy. We shouldn’t be arguing for or against the positions of complete absence of either. Nor should non-economical factors be relevant. What do you mean by non-economical factors? The fact that a government can provide decent courts, infrastructure, investment in basic sciences, a currency, security against domestic and foreign sources of destruction may not be direct production but they create an environment in which free enterprise can reach great heights. I look at meeting economic needs as a search through an enormously multi-variable space for peaks that represent meeting the wants of consumers efficiently. Pricing and the profit motive (and the ability to succeed or fail) are mechanisms that allow for a efficient search of that multi-variable space to find those peaks. Government can increase or decrease the magnitude of those peaks by enacting rules that allow pricing and the profit motive to work fairly and with high degree of competition which is necessary for the efficient search. The problem we have with a democratic government is that voters can vote for profoundly stupid policy which is hard to revise because voting is not as direct as pricing is for signaling preferences. And quite often there is a long lag before bad policy has a known impact. And a lot of times people aren’t as motivated to work hard to fix a minor negative compared to a smaller group that benefits. We get stuck with dumb stuff like minimum wage and ridiculous and unaffordable pensions for small municipalities and stupid work rules for federal union members because of that. But to demonize government as a whole is not helpful. The critique needs to be applied to mechanisms that enable government to act unproductively and then fix those mechanisms. Unfortunately that’s extraordinarily difficult because any attempt to fix broken mechanisms that benefit some small group even at huge expense to overall productivity or efficiency is hateful. ---
**Author:** ![Waymore](https://avatars.discourse-cdn.com/v4/letter/w/919ad9/32.png) [@Waymore](https://boards.straightdope.com/u/Waymore)\ **Post date:** [June 21, 2016, 7:50am UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/58 "2016-06-21T07:50:26Z")
> [@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. Yes, very little in terms of the wealth of the total economy. And the Highway system and the Apollo program would have been impossible without the private sector ponying up the dough to begin with. > [@septimus](#): > > - _“would have been created anyway.”_ So, without government we’d have gotten our highways? Sooner and better, I suppose? Why wouldn’t the private sector have built highways? > [@septimus](#): > > - _“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? As stated earlier, your examples are very little compared to the wealth of the entire economy. > [@septimus](#): > > _“redistributes it”_ When an employee of Pepsico buys an iPhone, money is being transferred, in steps, from Pepsi to Apple. What else is new? The money going from Pepsi to Apple is trading hands voluntarily, which is not the case with taxation. Plus, the free market is more efficient at the allocation of that money than the government. > [@septimus](#): > > _“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. You seem not to understand the difference between making money (private market) and taking money (taxation.) ---
**Author:** ![Waymore](https://avatars.discourse-cdn.com/v4/letter/w/919ad9/32.png) [@Waymore](https://boards.straightdope.com/u/Waymore)\ **Post date:** [June 21, 2016, 7:55am UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/59 "2016-06-21T07:55:24Z")
> [@septimus](#): > > I’m not going to answer your post point by point. Every single point you make is either wrong or irrelevant. That sounds nothing like a cop out. ---
**Author:** ![Waymore](https://avatars.discourse-cdn.com/v4/letter/w/919ad9/32.png) [@Waymore](https://boards.straightdope.com/u/Waymore)\ **Post date:** [June 21, 2016, 7:59am UTC](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724/60 "2016-06-21T07:59:21Z")
> [@iiandyiiii](#): > > Right… in anarchy, it’s not possible that a group of assholes could get together and rule territory by force and threats, right? Not like that’s ever happened. That group of assholes would be called the government. That’s what governments do, they rule territory. [Previous page](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724.md?page=2) [Next page](https://boards.straightdope.com/t/which-is-more-important-to-the-economy-government-or-private-sector/757724.md?page=4)