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?
In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value.
Economics is haunted by more fallacies than any other study known to man. This is no accident. The inherent difficulties of the subject would be great enough in any case, but they are multiplied a thousandfold by a factor that is insignificant in, say, physics, mathematics or medicine - the special pleading of selfish interests.
Money is different from all other commodities: other things being equal, more shoes, or more discoveries of oil or copper benefit society, since they help alleviate natural scarcity. But once a commodity is established as a money on the market, no more money at all is needed. Since the only use of money is for exchange and reckoning, more dollars or pounds or marks in circulation cannot confer a social benefit: they will simply dilute the exchange value of every existing dollar or pound or mark.
Global capital markets pose the same kinds of problems that jet planes do. They are faster, more comfortable, and they get you where you are going better. But the crashes are much more spectacular.
An economy can survive with 10% of the population insolation. It can't survive when 50% of the population is in isolation.
When the accumulation of wealth is no longer of high social importance, there will be great changes in the code of morals.
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