Private Sector vs. Public Sector

If you were mailing an extremely important package, you'd probably trust FedEx more than the U.S. Postal Service. But why? Is it because FedEx is a private company, while the post office is run by the government? What are the differences between the "private sector" and the government sector? Why does it matter? Find out in this animated two-minute video.

Download Pragerpedia on your iPhone or Android! Thousands of sources and facts at your fingertips.

FOLLOW us!
PragerU is on Snapchat!

JOIN PragerFORCE!

Script:

If you had something really important to mail, would you head to the Post Office, which is run by the government and considered part of the public sector, or would you go to a place like UPS or FedEx, which are private businesses. Politicians in the media often talk about the private and public sectors of our economy but what's the difference? And which one is more effective?

The private sector is made up of businesses or corporations owned by people. The private sector includes malls, grocery stores, and your local diner. To make a profit in the private sector, businesses must earn our money by offering us products and services that we want or need. When businesses have to compete for the same dollars, prices go down because no one wants to pay twice as much for shoes at one store if you can get the same pair cheaper at another place.

On the other hand, the public sector is not supported by profits. It doesn't have to compete for our dollars. Instead, the public sector uses our tax dollars to fund its services. So we pay for these programs no matter how much or how little we use them. The government decides how our tax dollars should be spent in the public sector.

This makes sense for some things. For example, you probably wouldn't want firefighters or police officers competing with one another for your business. In other cases though, this means things cost more or service is worse. The U.S. Post Office has $100 billion in debt and is regularly bailed out with taxpayer money. And the Department of Motor Vehicles isn't usually known for fast, friendly service. In contrast, private companies know that if they offer poor customer service and don't make money, they'll go out of business.

When comparing the private sector with the public sector, it's clear that the market-driven private sector is more efficient. When you don't have to be profitable or accountable, things tend to be more expensive and the service is worse.

So when there's a choice between a private sector or a government service, think about that package you really need delivered.

[gilbertoresendez]

Some things should be private and some public but just having one is all bad

[jetstream]

The problem with the private section is when monopolies are form and there is no more competition. They become so large and powerful, they can gain more influence over the government than the people and start legislating the nation in their own best interest to maximize profit.

[LivefreeanddiyTv]

This USPS hate is not as cut-and-dry as people think. USPS is actually VERY profitable, and their service is much cheaper in many cases than the private sector alternatives. The thing that hurts the USPS is the government mandate that it must pay about $5.6 billion a year for 10 years to prefund the retiree healthcare plan. Something that no other private entity does or is required to do. Also, according to the USPS, "the Postal Service receives NO tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations."

[breadonitsown]

I'm an arch-capitalist, but even I think there are places the private sector shouldn't thrive too easily in - like healthcare. Good health is a right, and I don't know why people continue to deny it. If you want a private health sector, that's fine, but the national focus should be on an effective Public Health Service that helps everyone.

[Limonene]

All I know from my own experience is that it's much cheaper to send packages through USPS (the US postal service) than it is through a private company like FedEx or UPS and you still get the same shitty service no matter which you choose. I also know that public sector jobs are better paying and offer better benefits than private sector jobs... at least for the average person. I've worked in the private sector my entire life and just recently was hired through the public sector and I have to say... the public sector pays a lot better, has better benefits, and has much easier jobs... easier in the sense that you're not squeezed to death to maximize the amount of work you produce comparative to the wage you make. I hate to tell you Prager U, but the public sector actually works better for regular people both as consumers and as employees. Just my experience as an average American.

[seanj]

My experience with the postal service is the opposite. When I buy something online, when the USPS delivers, the package often arrives a day earlier than expected, and I've never lost anything in the mail. On the otherhand, UPS and Fedex tend to deliver late.

[wsc]

The private sector works for its customers by contrast the customers are required to work for the public sector.

[RichardvsHimself]

WOW I LUV HOW IMPARTIAL AND UNBIASED UR ONIONS ARE OMG

[Horesmi]

CAUSE PRIVATE PRISONS ARE SO MUCH FUN, YEAH!

[jayfaisa]

The major problems I see with the public sector and government funded programs is that (A) there's hardly any "punishment" if these things fail, whereas, if a business does bad in the free market, they'll tank, and (B) these things are often driven purely for political reasons, rather than, empirical. For example, the Democrats pushed for education reform through government programs during the Clinton era. Education reform sounded good but it failed. Nothing changed. No one was punished. And, even though they knew it was likely to fail, the Democrats still pushed for it anyway because politically speaking it sounds The private sector still has its flaws but, in general, the private tends to be a more "progressive" model in the sense that the free market demands things to change if it's bad and the free market demands things to be better. Whereas, government is more of the same.

[SuperKittenator]

i am not a fan of the new style of video, the animation is fine, it's just the way the information is explained seems like you are trying to be 'trendy' and dictating the information rather than teaching it

[estherlangston]

*Please recommend an essay writing service.* Subject of my essay "Leadership in the Public and Private Sector".

[NujabesGaming]

I love the guile of this video, simply "knowing what's best" what needs to be private and public sector without even TRYING to find out through testing.

[xxLeCurexx]

Its a shame that this has to be taught to people these days. I learnt all of this back in high school.

[TheMrRedSir]

Also since the government is cutting space exploration, private companies will be advancing the exploration and colonisation of space.

[aaronhall]

Using USPS as an example was a mistake.
1. The USPS would be profitable if congress didn't straddle it with the erroneous obligation to forward fund it's retirement by 75 years. The average term of service for a federal employee is approximately 28 years, and retirement age is currently 72, so they are paying retirement benefits for employees who haven't even been born, let alone hired.
2. When you mail your tax payment do you take it to FedEx or the Post Office? You take it to the Post Office, why? As a branch of the government you payment is considered delivered at the point it is received by the USPS, if you FedEx it then it's the point of delivery. Further, you can't FedEx to a PO Box which is where most payments to the IRS go.
3. Levels of service. It doesn't matter where you live, you likely receive you mail delivered directly to your house. If you live in rural areas, FedEx and UPS often hand packages off to the USPS for delivery because they don't have the infrastructure to support rural delivery.
4. Cost of service. You can mail up to 2 oz. in a standard envelope anywhere in the US for a flat rate less than $1. No other delivery service provides that service at that rate.

All these things are made possible because of something that the Public Sector does that the Private Sector doesn't. Equality of service and outcomes. The public sector doesn't look at profit directly, it looks at an objective, daily delivery 6 days a week to your door, no matter where you live. Private sector looks at it from the standpoint of, fastest possible delivery for a price, where cost is marketable. The USPS's best products are their flat rate products, mail and parcel, they are very efficient at delivering mail over 5, 800 mail items every second. Despite what this video says, they have receive no federal funding, however they have been bailed out in the past when technology changed and they were not structurally prepared. The problems with the USPS are fabricated, none of their competitors, nor any other branch of the government are required to pay retirement for persons not yet hired. This obligation forced on them by congress was intended to kill the USPS, and force privatization. Personally, I live paying $0.50 to send a birthday card, not $7.00.

[zree]

most of this I can agree with, the irony being that the postal service has been the cheapest carrier I can find for shipping packages since their flat rate boxes. really it's the only thing that's saved them. snail mail needs to go the way of the dinosaur

[robertblack]

The USPS would be profitable these days if they didn’t have to pre-pay for 75 years of expected employee retirement and health expenses. Private businesses don’t have to do that, and that explains 95% or more of the difference.

[lordtraxroy]

public sector give the oppotunity for everyone a basic living condition like health care or school while private give people more the oppitunity to actually innovate or something

[proanimator.]

This is copied straight from Information Station?