Last modified on 23 July 2017, at 21:29

Free Enterprise

Adam Smith

Free Enterprise is commerce with business transactions carried on between private individuals or corporations without state interference or mandatory collective bargaining. Free enterprise brought unprecedented prosperity to the U.S. and Britain after the Industrial Revolution, but its benefits were sharply limited by government regulation and unions in Britain in the 20th century and, to a lesser extent, the United States.

Free enterprise means an unregulated economic activity that harnesses the power of economic freedom and competition, for the benefit of all.

Freedom is the principle on which the United States was founded. More than 200 years later, freedom serves as the nation's political foundation. Freedom is also the cornerstone of the American economic system. It is often called the free enterprise system because of the freedoms of the marketplace.

...every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. Adam Smith [1]

It is said that Ludwig von Mises (1881-1973) built an intellectual defense of capitalism and thus of civilization. When he appeared, there was virtually no systematic intellectual opposition to socialism or defense of capitalism. Socialism, von Mises showed, in his greatest original contribution to economic thought, not only abolishes the incentive of profit and loss and the freedom of competition along with private ownership of the means of production, but makes economic calculation, economic coordination, and economic planning impossible, and therefore results in chaos. Ludwig von Mises:Defender of Capitalism

“Historical evidence speaks with a single voice on the relation between political freedom and a free market. I know of no example in time or place of a society that has been marked by a large measure of political freedom, and that has not also used something comparable to a free market to organize the bulk of economic activity.” Milton Friedman, Capitalism and Freedom, 1962.

The only real cure for poverty is production. Henry Hazlitt, from Man vs. the Welfare State. 95–97

Free Enterprise is also the name of a 1998 movie starring William Shatner.

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