What is the private sector?

The private sector is the part of the national economy that is not controlled by its government. It includes all profitable and non -profit companies and is responsible for all economic activities that the government has not begun, such as the construction of factories and other buildings, the purchase of raw materials to be transferred to finished goods, and wages and salaries paid to workers. The second part of the national economy is the public sector, which is part of the economy controlled by the government, including things such as salaries paid to their employees, building government buildings or buying weapons, vehicles and uniforms for their army. Most governments affect their private sector's actions, either directly or indirectly, through regulations such as security requirements and financial mandates such as wages and hourly laws. It is difficult to say with any precision what steps would take without this governmental impact, but it is inaccurate to indicate that their behavior is actually completely private. In the analysis of modern economies, it is easy to rIt is difficult to distinguish between the public and private sectors, but it is more difficult to distinguish between them. For example, compensation of private enterprises is influenced by government laws on wages and lessons, so that the amounts of wages and salaries are not only determined at the discretion of the private sector.

The significant government influence in the private sectors is a relatively recent phenomenon. In the United States, this began seriously at the beginning of the 20th century, mostly in response to what was perceived as excesses of unbridled capitalism during the industrial revolution. The passage of legislation of the operating work, the regulation of the food and pharmaceutical industries and the order of hours and wages, had a dramatic impact on the actions of the private sector. Modern legislation has updated these earlier regulations and also ordered other employers' activities such as specific measures to protect the safety and health of employeesEating results.

The impact of

The government in the private sector is considered to be beneficial because it is so often focused on achieving socially desired goals such as stable families and safe transport. In fact, some political models support the overall government control of the whole economy and completely replace the private sector. Two of the most important attempts were in the 20th century in the Soviet Union and China, two large communist nations.

The Soviet Union, the first nation to attempt a complex economy of command, nationalized all businesses after the 1917 revolution. Agraripouha size of the nation gave him momentum when he tried to turn into a strong industrial nation and the economy grew under centralized control. After World War II, however, when industrialization was as complete as practical, the process of economic decisions dominated politicians and political ideology, rather than economic necessity, which led to the constant deterioration of the economy until the collapse of the RO governmentCE 1991.

Saved government control in China over its economy, which began when the People's Republic was founded in 1949, was released in 1978 in response to a stagnant command economy marked by inefficiency and corruption. The government allowed the establishment of exclusive ownership and small businesses. The release continued, and until 2010, the Chinese economy spread to a point of 90 times larger than in 1977. The extension of the private sector of China was the driving force in unprecedented growth of its economy.

These experiments, which have influenced the lives of billions of people, have explained that the private sector is essential for the economy's success. However, the unregulated private sector, which was seen during the American Industrial Revolution, is widely perceived as harmful to people and ultimately for society as a whole. HistoricallyThe most successful modern economies are those that have strong but regulated private sectors.