What is Free Enterprise?

Lee Flamand
Lee Flamand
Man climbing a rope
Man climbing a rope

Free enterprise denotes the self-ownership of each person’s labor as a resource which he is free to allocate as he chooses. Sometimes it is conflated with the term free market, which refers to the practice of allowing markets to operate by the rules of supply and demand, unfettered by government influence. However, it is worth noting that free enterprise locates agency in the individual’s ability to use his labor and resources however he sees fit, which suggests self-determination, while the term free market locates agency in the market at large, which suggests some constraints on an individual’s ability to determine the value and possible uses of his own labor.

In a capitalist society, wealth and the means of production are privately owned. This system of private ownership allows businesses and individuals to operate free of outside intervention. Free enterprise is the practice of going into business for oneself within the framework of a capitalist economy. When individuals practice free enterprise they inevitably fall into competition with others for the attention and capital of those they are attempting to sell their services or product to. Competition in turn creates markets by the principles of supply and demand, which is the basic way value or the cost of a product or service is determined in a capitalist society. Theoretically, competitors will attempt to attract business by improving the quality and driving down the cost of their products in order to succeed in winning the business of those who consume their products. The principle of competition is one of the most basic reasons most advocates of free enterprise cite when they make the claim that capitalism is the most beneficial of all economic systems.

Critics of capitalism sometimes make the argument that intense, unregulated competition makes it hard for newcomers to break into the market since they cannot compete with others who have had more time to accumulate resources and build foundations. Others have pointed to the existence of monopolies, where competing businesses either merge or beat each other out of the market, and subsequently gain the ability to set artificial prices on their goods and services because they do not have to compete with others. The development of monopolies has led many governments to enact some regulation on the functioning of the free market via such interventions as anti-trust laws. These interventions, although limiting in the most fundamental way, are thought to actually promote free enterprise because they are designed to promote competition and protect new entrants into the market.

Discussion Comments


I think I live the American dream, I do work for other people in the sense that I am self-employed. Every business serves people soon be truly independent I suppose you have to be some kind of harvester of natural resources and even then you'd be working for the earth.

When people go to extremes to describe political and economic ideology it tends to create separation in people and groups that could be avoided by just excepting some more moderate principles. Demanding the absolute adherence to strict standards of economic policy would negate the fact that almost no family life is absolute.

Our concepts of what free markets and free market enterprise is will continue to add and flow as our market experiences ups and downs and bubble bursts. I think as long as we stick to our ideals of rowdy in what is good business and we will be able to succeed into the future as an economically viable society.


Because we do not actually have a true ideal concepts of free market economy in our society and government system, it is impossible for us to truly exercise free enterprise as an individual.

Only when there is the true free flow of goods and services across an economy in any given nation in any part of the world, can we actually say that individuals have free access to be able to work for themselves on a level playing field.

While you might think that we have a free economy as it stands, this simply is not the case. An example of this is the use of trade agreements a tariffs to control the flow of goods and services across international borders.

I think the only way to achieve true market freedom would be if we had a completely equitable global economy.


Whether you believe in the principles of free enterprise are not, the reality of the world means that you must work for yourself. When I say you must work for yourself I mean in the sense that if you do not have the individual motivation to be able to get up every morning and go to work and you will not be able to succeed.

While most people consider free enterprise actually working as you own boss, free enterprise can also mean working in your own sense that you actually earn the money that you make. Receiving a paycheck from employer is an example of free enterprise. While some may not think so, you are receiving the benefits from the labor that you were pretty putting into whatever organization that you are employed by.

Either way, free enterprise is all about personal responsibility.


Free enterprise is the American dream simply put. Although many people do not use the term free enterprise specifically when they speak of living the American dream and working for one's own work and making the way, what they speak of is free enterprise.

My dad taught me about free enterprise. His hard work life and enduring spirit are exactly the kind of values that it takes for free enterprise system and society operate with any type of efficiency and success.

Watching my dad wake up early in the morning every single morning made me realize that it takes true inspirational spirit from within to ever be able to accomplish the demands of what free enterprise means for personal responsibility.

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