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Benefits Of The Free-Enterprise System

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The free enterprise system, also known as capitalism, is the economic system we use in the United States and has many benefits. These benefits include optimal prices, incentives to work harder, improved living standards, and freewill. The market determines the cost of goods in a free-enterprise system. Prices are set by supply and demand, so if a good is scarce but has high demand, it will be an expensive item. On the other hand, if there is plenty of a good and demand is low, the price will be low. The free-enterprise system leads to optimal prices because of the laws of supply and demand. People also respond to incentives. In a free enterprise system, the harder you work, the more likely you are to see financial rewards. People are incentivized to work hard to reach financial success. In other economic systems such as communism, a worker is given a set wage regardless of how hard he/she works. Our capitalist system allows people to be rewarded for hard work. This hard work benefits our economy and leads to higher GDP, which leads to lower unemployment and higher average incomes. …show more content…

The standard of living improves when there is large economic growth. During economic growth, business owners get richer and employees are paid better. This increase in discretionary income leads to greater spending, which benefits the economy. So, due to the economic growth that results from a free enterprise system, the population’s standard of living, as a whole, improves. This is beneficial from an individual and national

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Capitalism was devised by Adam Smith who believed that a free market would help everyone. It grew when inventors developed machines that could produce large quantities of goods more efficiently. Due to the large supply, prices fell and goods became more affordable. Having more factories

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The United States has only known the economic system of free enterprise since its development nearly 250 years ago. The nation has adapted the system so dramatically that it has been renamed the American Free Enterprise system. While it “provides individuals the opportunity to make their own economic decisions, free of government constraints,” capitalism, as it is also known, has consistently failed the people in other ways (Meyer 1994). Although the benefits of the American Free Enterprise system differs among individuals, it is still important to recognize its drawbacks for others. Voluntary exchange, the act of consumers and businesses trading goods or services, is necessary for capitalist economies.

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Business owners compete in a free market to make the best product or service at a price that will attract the most buyers. The successful businesses grow larger and employ more workers, thereby growing the economy. Proponents of the free market believe that this system encourages innovation, high quality goods, and increases the wealth of countries. The government does as little as possible in a free market economic

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Likewise, consumers in a free market economy reserve the right to buy from any company they choose because competition creates a market replete with a variety of sellers (enotes). In a command economy, none of these factors are brought into play. In a command economy, employers are told what and how much to produce, and what to charge employees (Investopedia). Similarly, consumers have little choice in what they buy because competition is nonexistent, creating excessively high prices and little industrial progress (Investopedia). On competition, Smith declares: ”In general, if any

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Characteristics of a capitalism system include the emphasis on investment and production, private ownership, rational accounting, rational organization of work, innovation and the establishment of clear laws. If all of these characteristics are performed and followed correctly, then capitalism as a system can be successful. The first step in modern capitalism is the Industrial Revolution. During an industrial revolution, the nature of work is altered from “cottage industries” where the work was prominently produced in the home, to industrial factories as the main site of production. When a country industrializes, it creates jobs in an urban setting and allows for the population to spread out.

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"Capitalism is the astounding belief that the most wickedest of men, will do the most wickedest of things for the greatest good of everyone. "- John Maynard Keynes In today’s society, reverting back to a free market would be disastrous. What we have in the United States today is a mixed economy.

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They include the following: free-enterprise (laissez-faire) which gives citizens of a nation the freedom to conduct business and any ways of attaining wealth in any fashion they wish to do so without governmental interference; the right to private property with little to no limitation as to how much land one may own or how that person may utilize that land or property; personal freedom (individualism). This sentimental concession of a particular individual liberty serves as a catalyst for the flourishment of a genuine capitalistic economy. Personal freedoms of all kinds allows the capitalist (whether successful or failing) to be more inventive, innovative (positively or negatively), stern, and disciplined. These are the three main elements of an economic system of

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The workers get paid at the lowest rate possible which that is what maintains the highest rate of return for the capitalist to give to the workers for their time and production of the product. All this is a piece of exploitation of the workers labors, where the capitalist is making an extreme profit and benefit off of the hard labor the workers produce for the capitalist. The profit that is made off the product, which was produced by the workers, should be paid to the workers but instead they are paid to the capitalist class. The capitalist class is those who are in charge of the means of production and the one who owns the

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Capitalism is all about hard work and being able to say that you deserve all of it because it was all your hard work and your desire to progress in life. “In large measure our wealth isn't the product of capitalism, it is capitalism,” (pg.2 Capitalism

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Capitalism for our society brings out the best in us. The most effective economic system for society is capitalism. Capitalism promotes people to give their best task at hand, which means it gives back what people earned. People who work hard for their money get more money, but people who work less than others get less money. There are also other reasons why capitalism can benefit our economic system.

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Also producers in a free market economy price goods and services reasonably allowing consumers to afford more. This causes competition which helps to ensure that the best goods and services are offered at lower

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