Private Sector

The private sector is the part of an economy owned and operated by individuals and businesses rather than by government. It spans everything from sole proprietors to multinational corporations, and in the United States it accounts for roughly 85 percent of nonfarm employment, with government at all levels making up the remainder.

Why it matters

Private firms operating under profit and loss generate most innovation, investment, and price signals in a market economy. Economists track the split between private and public activity because it shapes productivity growth, and because government borrowing can crowd out private investment when both compete for the same savings. The health of private credit creation, not just central bank policy, determines much of the money supply in a modern banking system.

In the gold vs bitcoin debate

Both assets are frequently described as private sector money, meaning value that originates and circulates without a state issuer. Gold was money in private commerce long before governments minted coins, and bitcoin was launched in 2009 by pseudonymous developers with no public institution behind it. Critics respond that state money benefits from legal tender status and tax settlement, advantages no private monetary good enjoys, which is one reason both assets trade primarily as stores of value rather than as everyday currency.