Should public sector be privatised or not?

Answer 1

The public sector exists because citizens agree upon services that should be provided but can not be provided by the private sector.

ie. roads, post office, national defense, air/water quality, food quality assurances, education, etc.

If the private sector can provide the same level of service at a better cost then the private sector should provide those services.

However, public sector markets work in areas called "failed markets". Failed markets preclude private solutions since there is inadequate or no revenue generated for the service provided.

Case in point - clean water. Government oversee and provides clean water to citizens because it is something Americans believe should be available to all Americans.

An example of counties with little or no public work are third world states. Africa, some central American, and south American states, etc. In these countries a small portion of the population has nice homes, public safety, roads and medical care. The state does not provide these services for the majority of the population and most people can not afford to hire private contractors to build nice roads to their house or hire doctors or educate their children. These countries are closer to a pure capitalist or private sector system. These countries have at some level, decided that the level of public good required for fellow citizens is very low by American standards.

At the other extreme are countries like Cuba. Cube may actually have a better medical system (at lease on the preventative level) than the USA. But the nation state control is excessive so there is little incentive for people to start up businesses and therefore jobs are scarce and innovation is limited.

The US historically has been leery of too much government but also believes in opportunities for all. The question of whether the public sector should be privatized starts with what do you think is best. Provide a level of clean water/air, education, transportation, health care and defence so that your citizens have an opportunity to realize their potential or not. If you chose "not" - then you are looking at a more capitalistic or communistic system that either under or over protects and thereby provides no incentive for personal initiative.

The correct balance is a moving target and keeps thinking people thinking about calibrating public and private sectors roles in a nation state's economy.