Also called a market economy, free enterprise is an economic system that allows individuals and businesses to make their own economic choices. They're enabled to compete in the marketplace with little to no interference from the government. No one is forced to be productive or creative and everyone is free to pursue what he believes is best. Free enterprise is based on four basic principles.
Freedom of Choice
Businesses and individuals are free to choose their product, economic resources and tools and materials to create their products. They are free to start their own business or offer their labor for profit. The government has no right to regulate or interfere with these decisions.
Private Property Rights
The right to buy and sell private property is guaranteed by law. It must be used safely and it cannot interfere with property owned by other individuals or businesses.
Profit Motive of Owners
Any income left after business expenses is profit. In a free enterprise system, profits are increased by reducing costs and increasing income. This profit is then used by the business or individual as she sees fit.
Owner Control
A business in a free enterprise system is controlled completely by the owner.The government has no control over the business and no say in its economic direction.
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