The Public-Private Divide

On reflection, any sensible person can see that there are things best left to people to do on their own initiative as they see fit, and there are other activities which need to be done collectively by a larger group. Where something only matters to a single individual, it is arguably no one else’s business to get involved. But where we have concerns that are relevant to society as a whole, then it has to be everyone’s business to help address them without exception.

In between these two types of scenario, there are a wide variety of issues that call for smaller or larger associations of persons, and each may require more or less involvement from a higher body with statutory authority.

Alas, ideologues prefer to dismiss this nuanced continuum of human endeavours, and insist that there is a sharp and simple ‘Public-Private Divide’. Worse still, some of them go on to insist that everything should be ‘public’, while others take the opposite extreme and demand everything be kept ‘private’.

Post-1989, the radical communist ideology of subsuming everything into the public domain now has few adherents. The total elimination of all sense of privacy and private ownership is problematic enough in its challenge to personal motivation and the need for autonomy, but it brings out the underlying paradox of having to enforce any kind of ‘everything is public’ system by means of vesting power and resources in the hands of an elite group of private individuals with little accountability to the wider public.

Unfortunately, the rampant laissez-faire ideology of leaving everything to the private realm is still alive and well. Its proponents have not quite done away with government institutions altogether, but they have come a long way in shrinking the state’s role in meeting public needs, and capturing government bodies for the sole purpose of directing them to serve the private interests of a wealthy elite.

One notable symptom of the ascendancy of the laissez-faire ideologues is the widespread acceptance of wealth-creating activities as inherently private. This is not a surprising ploy given that most present day advocates for laissez faire are plutocrats, and by positioning wealth as belonging to private individuals, they provide it with an ideological shield from public intervention.

But just as the extreme ‘all is public’ ideology is exposed and rejected, the same must happen to the unrestrained ‘all is private’ creed. Wealth is what has the potential to enhance the wellbeing of people. Yet by succumbing to the ‘only the private sector creates wealth’ myth, society goes along with economic measures that classify activities that boost cancer-causing smoking, prolong vindictive litigation, or increase pollution-causing production as ‘wealth creating’. Meanwhile, when public resources are organised to teach children, treat the sick, or care for the elderly, they are considered as a ‘drain’ on the nation’s wealth.

This dubious distinction gains some superficial credence from the fact the former are viewed as voluntary acts, even if conducted with harmful consequences; whereas the latter is enforceable by law and hence assumed to be coerced. But clearly not everything resulting from a collective process is undesirable, especially when it is underpinned by an open and democratic system of decision-making. And if people democratically agree to pool together a proportion of their country’s resources so they are more able to address a whole range of common concerns, that is not a matter of coercion or draining, but a productive move that delivers real benefits for all.

By contrast, given the deception, manipulation, and unbalanced bargaining positions, which often prevail in private transactions, the value of such activities is far from intrinsically good. For example, if some ‘entrepreneur’ manages to get people to waste their money on smoking themselves to an early grave, or gamble away the savings for their family, that is not a positive act of wealth creation at all.

Simplistic ‘public-private’ dichotomies are often framed to serve either those who want to be unaccountable custodians of everyone’s wealth, or those who want to be free from all legal constraints as they dupe and exploit others in order to amass ever greater wealth for themselves. In a democratic society, we need to remember that neither extreme is desirable, and we would all be better off if we learn to allow those activities most effectively carried out by an individual, a group, a federation, or a government to be taken forward at the appropriate level.