3.5.2.1 Individualist Arguments for Private Enterprise

(This is a current page, from the Patterns of Power Edition 3 book contents.  An archived copy of this page is held at https://www.patternsofpower.org/edition03/3521.htm)

Individualists prefer the freedom to make their own choices of what services to buy.  From a purely economic perspective it is possible for private individuals and companies to provide everything that a State might provide, with each person being responsible for paying their own way; those who were unable to pay for themselves might be looked after by family members, or by private charities on a voluntary basis.

If they are wealthy, they would personally find it cheaper to pay for their own services rather than to pay a contribution towards a publicly-funded service via a system of progressive taxation – as illustrated by the earlier example of dentistry (3.2.4.5).

And, without taking account of their self-interest, there are some more wide-ranging economic arguments that they might put forward:

  • Private enterprise can determine where infrastructure and services are needed and then quickly provide them without requiring government spending. For example, the Tata Power Company provided hydroelectric power to Mumbai in the 1920s on its own initiative; it is now a world leader in renewable energy.
  • Private provision of infrastructure might be inherently more efficient, in response to supply and demand (3.3.2).
  • People are more likely to be satisfied with services that they have chosen for themselves (3.2.2).
  • If they were able to buy themselves better services, people might work harder and thereby create more wealth.
  • If a government tries to provide services itself, it cannot match the market’s ability to provide innovation, diversity and responsiveness to consumer demand – so it is less likely to fully exploit the economic potential in any market sector.
  • People are less likely to make wasteful use of services they have to pay for. This is a strong argument for people being charged for utilities, such as electricity, and the principle can be extended to the use of some infrastructure such as roads.
  • All taxation is a drag on the economy (3.2.4.6).
  • It has been argued that more wealth might be created in total if the taxsystem were tilted to allow rich people to retain a higher proportion of the wealth that they create – to invest in creating jobs and increasing productivity.  As discussed later, though, the economic data in recent years do not support this ‘trickle-down’ hypothesis (3.5.6.5).

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