FREE ENTERPRISE SYSTEM

Free Enterprise System

Ara Mihalik

11/22/11

Cornerstone University

Ethics

Free Enterprise System

Introduction

The aim of this assignment is to focus on free enterprise. Free enterprise means competition. In this case, competition means competing for customers or markets. Economics are with us wherever we go. In our society today businesses and companies are competing against each other all the time. It shows two businesses selling lemonade. If the first person's price of his/her lemonade goes down, the second person's may go down as well. Another form of competition is, when companies target a customer by saying things like, "buy one, get one free."

The free enterprise movement started in the 1700s, when many individuals were restricted from starting and owning their own business without the permission of the government. The movement looked to reduce ownership and other related restrictions, such as how one should operate their business and who they were allowed to trade with.

Over time, the focus of this movement has shifted. A lot of its causes have been incorprated in most free-market systems. In the U.S. free enterprise advocates continue to fight for fewer restrictions along with fighting against any new developments that would restrict free enterprise. (Bacher, 2007)

The Economics of Cooperation

Economic systems that guarantee the fruits of labor to the people who produce such labor are generally shown to be more productive and create more wealth than economic systems in which the value of labor does not accrue to the person doing the labor, according to "Free Enterprise: The Economics of Cooperation," published by the Federal Reserve Bank of Dallas. Many countries, including those that do not subscribe to a capitalist economy, have adopted free enterprise principles to grow their economies as quickly as possible. Many varieties of the free enterprise model exist around the world. Singapore and the United States are frequently cited as having among the freest economies, with less interference by government than their economic peers. However, both retain the right to regulate businesses across various domains. (Lash and Urry, 2000)

The free enterprise system gains its strength from principles that were laid out in Adam Smith's "Wealth of Nations" over 200 years ago. His theories have been borne out by experience, and economies that run on government fiat rather than Smith's "invisible hand of the markets" theory tend to grow at a much slower pace than free-market models, states "Free Enterprise." However, a lack of regulation in the name of free enterprise can arguably lead ...