Talk of the "private sector" is just irksome. When I hear it tossed around I wince, much when the phrases a whole nother, suposebly, or anywho crops up within earshot. Fingernails down a chalkboard would be an euphonious melody if said fingernails were raking and slashing these phrases on the chalkboard, starting with "private sector."
There is no such thing as a "private sector" of the economy. The phrase implies the economy has parts and that private free enterprise is just one part of the overall economy. Further implied is that the economy would be incomplete or unbalanced if "the private sector" was responsible for all economic activity.
Private enterprise and the market---you, me, and every other individual voluntarily participating as producers, consumers, and savers---is the economy. The market is the sum total of the free actions of individuals who participate and contribute to its existence and movement. Without individuals seeking their self interests there would be no market. This is no mere sector of the economy.
(Did one day, deep in the past, government authorities somewhere declare, "Let an economy come forth from nothingness, and we shall determine which sector will be private"? Or did individuals, respectively seeking their own self interests and making mutually beneficial transactions voluntarily cooperate themselves, and thus their societies, out of hand-to-mouth existences?)
Furthermore, when individuals voluntarily participate in the market, of which they are by definition a part, they can only contribute to the the economy. By contrast, when government "participates" in the economy, it, by definition of being outside the market that is had nothing to do in creating, can only interfere with the operations and voluntary interactions of individuals, that is, the market. And when it interferes, it does so using the force of law and regulative coercion, something individuals in the market cannot do, minus the legislative assistance of the government. (Think of GE lobbyists stealthily working for Cap and Trade legislation.)
Basically, individuals create wealth, therefore economic activity. Government confiscates, retards, and interferes with wealth creation, therefore creating uncertainty and instability in the economy. These two mutually opposed entities cannot therefore constitute two sectors of the same enterprise. There is the market and there is the government.
Yes, government has a role in the economy, but that role is always from outside, hence its role is interference. How much interference is desirable, just, counterproductive, etc. is a matter for another time. One might even say it is a matter for a whole nother Chalk Talk.
