Comment on the statement : Question 6 Comment on the statement : “The private market is more effective in making collective decisions in society”

Definition Private market Collective decision More about collective decision making Our view Conclusion -- comment Question

Definition of Private market A system that any individual or organization inside can engage in economic activities for their own benefits. Private property right is secured. Decision making bases on the comparison of cost & benefit.

Definition of Collective Decision Making “ collective”  social organization group of people comes face to face to organize their own interest, not in the purported interest of others all members have equal status, are seen as vital elements of group unity and successful function

More about collective decision making

Comparison collective decision  members within the group share a similar or common interest public choice  everyone can have different interest “The world of public choice is essentially a rational world, with everybody pursuing their own best interests in the most efficient way possible, even when the result is social inefficiency.” (notes p.17)

Examples Voting A private company’s promotion strategies The decision made by a tutorial group

Why collective decision making Extensive discussion on the issue Shared responsibility Better acceptance The power on majority

Rules of collective decision making Variety of models but mainly two rules for a democratic system Absolute Unanimity Rule require a 100% acceptance on the measure Simple Majority Rule require only more than 50% acceptance

Our Concern making collective decisions in “society”  public sector  provision of public service

Advantage of private market competition between companies make effort to reduce cost new production method effective management more likely to ensure the intended result obtainable

Disadvantage of private market amoral economic charges prevent poor people from using the services cannot reach optimal level of production understated true needs free-raider monopoly

Comparison: private vs state Quickness Faster decision making Ab. To produce Ab. To meet reality People may not be able to make appropriate choice Slower decision making

Conclusion Private market is not effective on making collective decision in society (public sector)