Individualist Arguments for Private Enterprise

The individualist arguments for private enterprise are based on the proposition that it is likely to be well directed and efficient

Individualists prefer the freedom to make their own choices of what services to buy.  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 (

And, without taking account of their self-interest, some individualists believe that governments should cut government spending to have a low-tax market economy.  Daniel Hannan advocated such policies ahead of the UK budget in 2024:

“Tax cuts work. They incentivise employment, encourage investment and make an economy hum. But – and this really should not need saying – they need to be matched by spending cuts.

For proof, look at Argentina, whose chainsaw-wielding president, Javier Milei, has begun as he means to go on, reducing the state payroll and scrapping regulations.

..investment is returning to Argentina, the budget is back in surplus and the economy is predicted to return to growth this year. In a couple of months, Milei has halted a century of decline.”

There are several persuasive individualist arguments for private enterprise to drive economic growth, with the government taking a back seat:

●  Private enterprise can determine where infrastructure and services are needed and then quickly invest 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.

●  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.

●  People are more likely to be satisfied with services that they have chosen for themselves (3.2.2). And if they were able to buy themselves better services, they might work harder and thereby create more wealth.

●  All taxation is a drag on the economy and there is a practical limit on how high taxes can go (

●  It has been argued that more wealth might be created in total if the tax system 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 (



This page is intended to form part of Edition 4 of the Patterns of Power series of books.  An archived copy of it is held at https://www.patternsofpower.org/edition04/3521b.htm.