Free enterprise, or the free market, refers to an economy where the market determines prices, products, and services rather than the government. Businesses and services are free of government control.
Alternatively, free enterprise could refer to an ideological or legal system whereby commercial activities are primarily regulated through private measures. In principle and in practice, free markets are defined by private property rights, voluntary contracts, and competitive bidding for goods and services in the marketplace.
In western countries, free enterprise is associated with laissez-faire capitalism and philosophical libertarianism. However, free enterprise is distinct from capitalism. Capitalism refers to a method by which scarce resources are produced and distributed.
Free enterprise refers to business activities that are not regulated by the government but are defined by a set of legal rules such as property rights, contracts, and competitive bidding.
The argument for free enterprise is based on the belief that government interference in business and the economy hampers growth. A free enterprise legal system tends to result in capitalism.
The original home of contemporary free markets was England between the 16 and th18 centuries. The United States also used a largely free-market legal approach during the 18 and 19 centuries.
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