It is a well established fact that markets and private enterprise are far more efficient than government at running companies and organizations. The reason is simple: corporations and private companies have a clear profit incentive to which they respond. This benefits everyone and is the magic of the market at work. Adam Smith, the father of capitalism, recognized this in his totemic work, The Wealth of Nations back in 1776. “It is not,” Smith wrote, “from the benevolence of the butcher, the brewer or the baker that we expect our dinner but from their regard to their own interest. We address ourselves not to their humanity but to their self-love.” Smith’s recognition that by looking out for their own profit interests, individuals, without any formal coordination, would all move towards producing better products more efficiently and at a lower price. This is the famous invisible hand of the market which
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