Without a private sector the entire economic system would be state run. This may not be a bad thing, if the state in question was benign and run for the people; the communist ideal. This is very rarely the case and so a private sector helps overcome difficulties associated with state controlled economies.
- Why do we have a public sector?
The private sector isn't necessarily all good. Capitalism is vulnerable to the same problems as Communism; namely greed from those in power. The private sector allows competition and provides consumers with choice, but small businesses are often trampled underfoot by their established peers.
- Isn't that what competition is about?
- So I'm confused - is it good or bad?
It can be extremely beneficial to society, as long as there is no massive disparity in wealth. With the deterioration of local businesses and domination of multinational corporations the competition laws either need to be reviewed or enforced.