What is free enterprise?

Free enterprise denotes ownership of each person's work as a resource that they can freely allocate at will. It is sometimes combined with the term free market , which refers to the practice of allowing markets to operate according to the rules of supply and demand, free from government influence. However, it is worth noting that the free enterprise locates agency in the individual's ability to use his work and resources as he sees fit, suggesting self-determination, while the term free market places the agency in the market at large, suggesting some restrictions on an individual's ability to determine the value and possible uses of his own work.

In a capitalist society, wealth and the means of production are privately owned. This private property system allows companies and individuals to operate without outside intervention. Free enterprise is the practice of doing business on your own within a capitalist economy. When individuals practice free enterprise, they inevitably compete with others for the attention and capital of those to whom they are trying to sell their services or products. Competition, in turn, creates markets according to the principles of supply and demand, which is the basic way in which the value or cost of a product or service is determined in a capitalist society. Theoretically, competitors will try to attract business by improving the quality and reducing the cost of their products in order to succeed in winning business from those who consume their products. The principle of competition is one of the most basic reasons most advocates of free enterprise cite when they claim that capitalism is the most beneficial of all economic systems.

Critics of capitalism sometimes argue that intense and unregulated competition makes it difficult for newcomers to enter the market, as they cannot compete with others who have had more time to accumulate resources and build bases. Others pointed to the existence of monopolies, where competing companies merge or outperform each other in the market and later gain the ability to set artificial prices on their goods and services because they don't have to compete with others. The development of monopolies has led many governments to enact some regulations on the functioning of the free market through interventions such as antitrust laws. These interventions, while limiting in the most fundamental way, are believed to actually promote free enterprise because they are designed to promote competition and protect new market entrants.