The ‘Private Sector’
The “Private Sector” is a very popular term that’s embedded in our politics and in mainstream and not so mainstream economics. Those of us seeking a better world, though, need to banish it from our discourse as it communicates so little while hiding so much.
The “Private Sector” is widely understood to be the “sector” that operates outside the government. But which industries actually do so? Are Lockheed Martin, Northrop Grumman, or Boeing in the “Private Sector” when the bulk of their business comes from government? Or the banking industry whose business model of high leverage couldn’t exist without government deposit insurance or a government lender of last resort we call the central bank? All of finance is tightly integrated with government and it’s highly dubious to consider it private. Witness the unsurprising speed of the recent public bailouts of these “private” firms. How about the railroad industry of the past, the key driver of the 19th century economy, which crucially depended on public land grants? Or the automobile industry which wouldn’t exist without public roads? The entire socioeconomic system of mass production capitalism, in fact, is integrally dependent on government and wouldn’t be long for this earth if it lived solely through “private” means. We can easily imagine the unemployment and purchasing power calamity that would ensue if the US government terminated its massive injection of purchasing power from military spending, research, and “entitlements”. Or if the European states ended all spending.
We’re in a holistic system that can’t easily be thought of as either “private” or “non-private”; only the combined whole has meaning. The “Private Sector” can’t exist by itself and the term therefore offers us very little. But it hides a great deal, and no doubt that’s the reason for the widespread use.
What better cloak to hide the reality of a system of power in which the top 5% own 72% of financial wealth and the bottom 80% just 7? It’s not an oppressive oligarchy that’s ruling the roost, it’s the “Private Sector”. We’re told we must enforce austerity because our debt to the “Private Sector” is excessive. But of course the debt isn’t owed to a “Private Sector”, it’s owed to a tiny fraction of the population that’s better identified as “The Owners”. And the underlying system in which this debt has meaning isn’t at all private; it directly commands the lives of every person on the planet and is therefore public in every sense.
I cringe every time I hear “Private Sector”, as I also do with the next most popular term for the oligarchy – “investors”. We can measure our progress by the degree such Orwellian words are wiped from the language.