The strongest argument for free enterprise is that it prevents anybody from having too much power. Whether that person is a government official, a trade union official, or a business executive. If forces them to put up or shut up. They either have to deliver the goods, produce something that people are willing to pay for, are willing to buy, or else they have to go into a different business.
Interpretation
Free enterprise limits concentrated power by requiring accountability and performance from individuals in positions of authority.
Milton Friedman argues that free enterprise serves as a strong check against the accumulation of excessive power by any single individual or entity, be it within government, trade unions, or businesses. The system ensures that individuals must prove their worth by delivering valuable products or services that people choose to purchase, thereby preventing any one sector from exerting undue influence or control over the economy and society at large.
In practice
In a discussion on economic reforms, one might quote this to emphasize the importance of accountability in business and politics.
The economic miracle that has been the United States was not produced by socialized enterprises, by government-unon-industry cartels or by centralized economic planning. It was produced by private enterprises in a profit-and-loss system. And losses were at least as important in weeding out failures, as profits in fostering successes. Let government succor failures, and we shall be headed for stagnation and decline.
Universities exist to transmit knowledge and understanding of ideas and values to students not to provide entertainment for spectators or employment for athletes.
There is no place for government to prohibit consumers from buying products the effect of which will be to harm themselves.
There is one and only one social responsibility of business - to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.
The great danger to the consumer is the monopoly -whether private or governmental. His most effective protection is free competition at home and free trade throughout the world. The consumer is protected from being exploited by one seller by the existence of another seller from whom he can buy and who is eager to sell to him. Alternative sources of supply protect the consumer far more effectively than all the Ralph Naders of the world.
When a private enterprise fails, it is closed down; when a government enterprise fails, it is expanded. Isn't that exactly what's been happening with drugs?
I am a huge bull on this country. We will not have a double-dip recession at all. I see our businesses coming back almost across the board.
Government control of the economy, no matter in whose behalf, has been the source of all the evils in our industrial society -- and the solution is laissez-faire capitalism, i.e., the abolition of any and all forms of intervention in production and trade, the separation of State and Economics, in the same way and for the same reasons as the separation of Church and State.
There would be plenty of justification to raise revenues in order to subsidize businesses that employ low-wage workers. But there can be no justification for pandering to the economy's entire bottom half merely to attract its votes.
No country, however rich, can afford the waste of its human resources. Demoralization caused by vast unemployment is our greatest extravagance. Morally, it is the greatest menace to our social order.
Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes a bubble on a whirlpool of speculation. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill done.
When people from organizations like the World Bank descended on Third World countries, they always tried to remove obstacles to development, to reduce economic anxiety and uncertainty.
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