Benefits of free enterprise
A tradition of free enterprise
18 million unincorporated businesses in US 3 million are minority owned Started by entrepreneurs America = "Land of Opportunity"
Free contract
Allows people to decided what agreements they want to make
Legal equality
Everyone has the same legal rights to compete in the marketplace
The role of the consumer
In a free market system- free to make decisions Signal producers what to make and how much to make Growth of interest groups
The role of government
Information and Free enterprise -educated consumers help the system -public disclosure laws- requires companies to give consumers important info on their products Protecting Health, Safety, Being -Public Interest outweighs Producers -Concerns of the Public Negative Effects of Regulation -Rules are costly -May cut into advancements
America's Success
Open land Natural resources Immigrants with different backgrounds and experiences which contribute to new ideas Social and political commitment to free enterprise
Voluntary Exchange
People decide what and when they want to buy or sell
Private property rights
People have the right to control their material possessions
Basic Principles of Free Enterprise
Profit Motive -Make money Open Opportunity -The concept that everyone can compete in the marketplace -Allows economic mobility to go up or down (why is that important?)
Constitutional Protections
Property rights -5th amendment (life, liberty, and property) -14th amendment (due process) Taxation -Article 1 (congress has the right to tax) Art. 1 Sect. 2 and 9 (direct taxes apportioned according to population) -16th Amendment (Income Tax)
Competition
Rivalry among sellers and buyers