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?
My agency in promoting the passage of the National Bank Act was the greatest financial mistake of my life. It has built up a monopoly, which affects every interest in the country. It should be repealed, but before that can be accomplished, the people will be arrayed on one side and the banks on the other, in a contest such as we have never before seen in this country.
Capital is money, capital is commodities. By virtue of it being value, it has acquired the occult ability to add value to itself. It brings forth living offspring, or, at the least, lays golden eggs.
The poor don't live in functional market economies as the rest of us do, but in political economies where corruption and broken systems extend from local government to moneylenders.
I think there's a lot of merit in an international economy and global markets, but they're not sufficient because markets don't look after social needs.
Markets as well as mobs respond to human emotions; markets as well as mobs can be inflamed to their own destruction.
If the job of capitalism is to create wealth for those who put up the capital, no fund group comes close to Vanguard's success in serving its owners. So we're probably as far away from communism as is realistically possible.
Subscribe for the occasional hand-picked quote. No noise.