Public broadcasting. The education system. Roads and railways. Research and Development. Law and order. National Security. These and other institutions fall under the definition of public goods in economics. They are non-excludable and non-rivalrous, in the lexicon. In other words, individuals cannot be excluded from their use, and use by one individual does not reduce use by others.
All of the above could also be called institutions. In any modern capitalist economy, these can be private, such as firms of various kinds, or public. Different nations strike different balances between the public and the private. In the UK, healthcare is mainly public, funded through general taxation. In the US, private healthcare dominates. The balance can be seen to be shaped by an interaction between various forces, such as the social, the historical or the economic. In social theory, of which economics is a branch, this can be reduced to the relationship between human agency and social structure.
Human agency is our capacity to act, either consciously or unconsciously, in a particular environment. Social structures are the patterns or networks of interaction in society which are emergent from, but irreducible to human agency. Some theorists propose that the interaction between human agency and social structure produces continuous change in society. Social structures, such as the institutions mentioned above, both empower and constrain human agency. In turn, the latter has the power both to reproduce and transform social structure in a process of historical and evolutionary social change.
This way of thinking can be applied across all manner of societies, with a great variety of institutions. All forms of capitalism, for example, tend to be mixed economies, in that there is a mixture of privately and publicly owned property.
Neo-liberalism, a term with negative connotations on the political left, has since the 1970s in much of the world involved a strengthening of the power of private capital to varying degrees across different countries, and an ideology which sees the private as a superior organising force to the public in the economy and society. Although it has brought tremendous prosperity for some, it has arguably had mixed results for the wider society. If capitalism is to be sustained it needs to bring prosperity to the many and more effectively promote the public good. I remain hopeful that this is possible, and that public action, whether from political parties, or from social movements (and the two may well overlap), can bring this about.
Public action remains key to the promotion and sustainability of the kind of public goods which help to sustain private action and contribute towards a ‘common good’, if such a thing can be defined. Without effective taxpayer-funded public education, infrastructure and goods such as law and order, private firms will find it hard to function successfully. An intelligently-designed welfare state and trade unions as social partners are other, for some more contested, aspects of a capitalist economy.
Looking further ahead, if some politicians could manage such a thing, action to encourage environmentally sustainable economic growth (unless this is an oxymoron!) requires public intervention to promote the necessary technological change and set the framework for the private sector to change its ways.
It is the interaction between the public and the private, and not simply one or the other, that shapes our economic and social future. Our theory of human agency and social structure provides a more general framework in which public, private and the relationship between the two can be analysed fruitfully. We can act to change the social structures, such as public and private institutions, that will constrain and empower in particular ways our future selves and others, giving rise to future potential patterns of human action and social forms. In the broadest sense, this promotes the idea of the continued existence of a variety of capitalisms, and maybe potential societies beyond that, which we have not begun to imagine, but which are shaped by a continuing social evolution.