Public Works - Utility of Investment

Utility of Investment

While it is argued that capital investment in public works can be used to reduce unemployment, opponents of internal improvement programs argue that such projects should be undertaken by the private sector, and not the public sector, because public works projects are characteristic of socialism. However, in the private sector, entrepreneurs bear their own losses and so private sector firms are generally unwilling to undertake projects that could result in losses or would not develop a revenue stream. Governments will invest in public works because of the overall benefit to society when there is a lack of private sector benefit (a project that will not generate revenue) or the risk is too great for a private company to accept on its own.