What Does “Free Enterprise” Really Mean?
If a survey were to be conducted asking the American people whether they favor America’s system of “free enterprise,” my hunch is that at least 90 percent of them would respond, “Of course. As an American, I strongly support our nation’s system of free enterprise.”
But how many people actually ponder the meaning of that term? My hunch is: Not very many. I’d say that most people favor America’s “free-enterprise” economic system simply because that’s what everyone is taught to favor since the day they enter first grade in America’s state-controlled educational system.
The true meaning of “free enterprise” is a system in which economic enterprise is free of governmental control, management, and regulation. That’s what is meant by “free” enterprise. Yet, that is clearly not what we have here in the United States.
For example, there are minimum-wage laws. These are laws requiring employers to pay a legislatively established wage to employees. If an employer pays an employee less than the state-mandated wage, the state imposes severe penalties on that employer.
How can a state-mandated minimum wage possibly be reconciled with a system of “free enterprise”? It can’t be. A system of free enterprise, again, is one in which economic enterprise is free of government control, management, and regulation. Under a genuine free-enterprise system, the matter of wage rates would entirely be a matter of agreement between employer and employee. There would be no state involvement at all.
Consider licensing laws. Here, the state determines who is going to be permitted to engage in certain occupations and professions, such as medicine, law, hairdressing, shoe shining, floral arrangements, and others. With a state-issued license, which usually costs lots of money to attain, a person cannot legally engage in certain economic activity.
How can a system based on occupational licensure possibly be reconciled with a system of free enterprise, which, again, is a system that is free of government control, management, and regulation? It can’t be. A system in which people are required to secure the permission of the state before engaging in
Article from The Future of Freedom Foundation
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