In the previous post, terms such as private sphere and public sphere and private sector and public sector appeared. To avoid ambiguity and ensure discipline of reasoning, it is worth defining these terms. Let’s start with the first pair of these concepts. Well, the term PRIVATE sphere encompasses that sphere of people’s activity in which their actions are directed at satisfying the INDIVIDUAL needs of themselves and those close to them. So whatever people do for this purpose, it is in the private sphere that happens.
The second is the PUBLIC SPHERE. In it, only those people WHO EXERCISE THE AUTHORITY act, but ONLY THEN, when they perform their duties arising from their assigned function in the legislative, executive and judicial branches of government, as well as their counterparts at lower levels of public power. Idealizing this role somewhat, let’s assume that these people act THEN for the benefit of the SOCIETY under their authority. This does not mean, however, that they then provide services to that community. In such an IDEAL MODEL, the exercise of power has NOTHING in common with the provision of any services. This is because the purpose of people’s actions in this sphere is to MAKE AND ENFORCE LAWS that ensure the exercise of EVERYONE’S NATURAL RIGHTS, i.e., the right to life, the right to own the results of one’s labor, and personal freedom. (We will look at what this looks like in reality another time).
It follows that PEOPLE IN AUTHORITY act ALWAYS in the private sphere, because they are people with specific individual needs, and SOMETIMES still – in the public sphere, of course, without then ceasing to be people. Then, however, WHEN THEY ARE ACTING IN THE PUBLIC SPHERE, in addition to private goods and services, they need ADDITIONAL PUBLIC GOODS AND SERVICES.
Corresponding with this division is the second pair of concepts, which are PRIVATE SECTOR AND PUBLIC SECTOR. Both are complex SYSTEMS composed of certain elements. THE PRIVATE SECTOR includes PEOPLE AND THE PROPERTY THAT THEY OWN, which is used to meet their needs IN THE PRIVATE SPHERE, as well as all the NORMS OF CO-OPERATION and social RELATIONS established in this sphere. An important element of this sector is the MARKET OF PRIVATE GOODS AND SERVICES.
The PUBLIC SECTOR, on the other hand, is a system that includes all the PEOPLE IN AUTHORITY and all the institutions established to manage the state at the various levels of state and local government and to conduct national and foreign policy, as well as all the INVENTORIES used by them to exercise power and the LEGAL AND ORGANIZATIONAL SYSTEM necessary for their proper functioning.
Finally, it is still worth clarifying what is meant by the term SUPPLIERS of PUBLIC GOODS AND SERVICES. I include in this group of people all those employed in various positions in PUBLIC SECTOR institutions, and EXTERNAL providers of public goods and services. None of those employed in public sector institutions exercise public authority, but only provide a certain type of PUBLIC SERVICE that is needed by those who exercise authority. The same applies to external service providers (e.g., experts, consultants, etc.) and suppliers of any public goods. In this regard, it must be strongly emphasized that neither these individuals, nor the businesses and institutions they run, ARE NOT IN THE PUBLIC SECTOR. And this is because all that they do as providers of public goods and services, they do for the sole purpose of generating income to finance purchases to satisfy their OWN NEEDS, so much so that they sell the results of their activities to the public sector. Meanwhile, the PUBLIC SECTOR – to reiterate – includes only those in power who act IN THIS ROLE FOR THE GOOD OF THE SOCIETY they govern.
Applying the definitions and explanations given above, it is now possible to unambiguously assign a certain action of any person to either the private or the public sphere, just as every good and every service is either private goods and services or public goods and services. Private goods are FOR ALL PEOPLE, public goods are ONLY FOR THE AUTHORITY.
The situation is thus clear in contrast to the one we face when we adopt the definition of public goods and services used in the mainstream. For there, PUBLIC GOODS AND SERVICES include, among other things, those that are provided BY THE AUTHORITY “FREE OF CHARGE,” and those employed in government and public administration bodies are referred to as public sector employees. According to this approach, the work of teachers, doctors, museum workers, etc. is treated as the provision of public services. A TOTAL TERMINOLOGICAL CONFUSION arises as a result, since the same good, such as medicine purchased at a pharmacy, for example, is a public good for some, and a private good for others who pay full price for it. The same applies to the services of educational institutions, health care, museums and many others.
On the other hand, in the approach used here, ALL EMPLOYEES in the broadly defined institutions of education, upbringing, culture, health care, and the like, belong to the PRIVATE SECTOR and ACT IN THE PRIVATE SECTOR, and are distinguished from the rest only by the fact that their SERVICES are bought in whole or in part by the public sector, in order to be made available later, allegedly free of charge, to certain social groups for the satisfaction of their PRIVATE needs. Allegedly, because all tax-payers pay for it, and only some benefit. These services have nothing to do with the exercise of power, even though many of them involve some form of coercion (e.g., health levies, compulsory schooling), and they can be and REALLY ARE also the subject of voluntary purchase/sale transactions ON THE PRIVATE MARKET. The same applies to business owners from whom the authorities buy medicine, equipment for hospitals, schools, other educational and cultural institutions, emergency equipment, and the like, goods for government-funded institutions of so-called public utility. They should therefore be counted as PRIVATE GOODS AND SERVICES.
In summary, ALL SUPPLIERS OF PUBLIC GOODS AND SERVICES act FOR THEIR OWN BENEFITS, and therefore act IN THE PRIVATE SPHERE, but they differ from other people acting in this sphere in that the results of their work – goods and services – are needed ONLY IN THE PUBLIC SECTOR.
All the rest are producers of private goods and providers of private services, which are traded in the PRIVATE GOODS AND SERVICES MARKET.
Quite extensive are these explanations, but they are necessary in order to avoid the confusion and arbitrariness to which the definitions used in the mainstream lead, which essentially prevent meaningful consideration using the rules of logical inference.
Since the issues of terminology are settled, we can proceed to attempt to answer the question posed in the title. That answer is:
THE BURDEN OF MAINTAINING THE ENTIRE PUBLIC SECTOR AND ALL PROVIDERS OF PUBLIC GOODS AND SERVICES RESTS SOLELY ON THE PARTICIPANTS IN THE MARKET FOR PRIVATE GOODS AND SERVICES.
I will provide proof of this thesis in the next post.