Private firms spearhead the production growth in any country. After all, the capitalist system itself pushes the private sector to engage in economic activities, as the capital needed for these activities is held by private individuals. It has been proven that the government acting as an entrepreneur in the market often yields outcomes that do not benefit society as a whole.
The private sector’s stance on market opportunities involves rational choices based on the profitability of any economic endeavor. Private entities prioritize their money, the capital, before dulging in any activity since it is their hard-earned and accumulated capital that is at stake. On the other hand, governments spend the tax money, which belongs to citizens. When government officials decide to compete in any market, they do not always behave like private firms do, as the capital that they are putting forward is not theirs. They are not betting their own money, which could lead them to make bolder decisions. The private sector is the key to efficient economic decisions.
Not only that, but the private sector comes up with innovation, which brings about economic growth. To increase productivity, thus profit, firms need to innovate. Take, for example, Henry Ford’s assembly line. He needed to manufacture cars at a faster rate, so he devised a new production method in which pre-produced parts were attached to the body at a specific location on a continuously moving line.
The fact that the private sector’s efficient production, combined with the government’s monitoring and safeguarding, propels a nation’s economy to new heights is undeniable.
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