in a free-enterprise system, consumers decide This is a topic that many people are looking for. thetruthaboutdow.org is a channel providing useful information about learning, life, digital marketing and online courses …. it will help you have an overview and solid multi-faceted knowledge . Today, thetruthaboutdow.org would like to introduce to you The Free Enterprise System. Following along are instructions in the video below:
“Everyone. Mr. Latrek here and today we re going to discuss the american free enterprise enterprise system and the benefits of the free enterprise system ok. Some benefits of free.
The rights that are guaranteed to us in the us constitution allow people to participate in free enterprise. This this freedom has resulted in a high standard of living for our citizens. Well highest in the world. And it is the most efficient economic system.
It s not only not always the most fair. But it is very efficient in regards to not wasting resources and having a high level of production property rights are guaranteed to us under the fifth amendment. Which states that no person shall be deprived of life liberty or property. Without due process of law.
The government is not allowed to take property unless. There is an urgent necessity and it must provide just compensation for it for instance in wartime if they need to take over a factory to produce weapons. They are permitted to do so if they just li compensate the owner in being secure and our property allows people to have the incentive to acquire wealth. If that government could just pull your your hard work away from you by emptying your bank account or taking your property.
There would be little incentive to earn wealth. However..
We are guaranteed this in our fifth amendment rights the government s right to tax citizens and businesses is regulated by the constitution people and businesses have the right to make binding contracts that cannot be abridged by political action in binding contracts help to create a sense of security and encourage business activity. So if somebody takes your money and signs a contract with you they can t simply back out and take that your investment with them the basic principles of free enterprise. One is a profit motive. This is the force that encourages individuals and businesses to improve their material well being at seeking profit profit motive forces businesses to make good economics decisions minimize waste in order to stay in operation the less wasteful they are the more money they make and it forces individuals to be economically responsible because individuals own things they will be more careful about them if the state owns them people will frequently abuse them open opportunity.
The concept that everyone is allowed to compete in the marketplace. People are free to enter business. And will be rewarded based on their performance. It allows for greater competition and competing for jobs and business creates a higher level of performance legal equality.
Everyone has the same legal rights and compete within the economy. Human capital is maximized. When everyone is allowed to enter the business or the workplace with careers open to talent. The economy becomes more productive so as opposed to let s say 17th century france where your occupation was determined by who your parents were how much influence you had you know we have a system in which your talents will determine and your motivations.
Private property is another people have a right to buy sell or control their possessions. As they wish when property is privately owned. It is usually better cared for and it lasts. Longer if it belongs to noah or to everyone that belongs to no one this is known as the tragedy of the commons.
It s a bit of an overstatement. But generally speaking when there is a public good..
The people owned they do not take care of it with the same result as they take care of their property and frequently it falls into disrepair for contract people are allowed to decide what agreements they wish to enter into voluntary exchange people are allowed to decide what and when they want to buy and sell so there are no fixed prices or markets. And markets. Allow goods and services speaks change at their actual value okay so no artificial pricing. There are a couple.
Exceptions with public utilities and things that people need for survival competition. Rivalry amongst sellers to attract customers while lowering costs competition. Reduces waste by compelling sellers to offer products at the lowest possible price in highest quality. Ok.
The role of the consumer in all this consumer purchases of goods and services signal to producers about what and how much to make only those goods that people wish to buy will be produced reducing waste and raising the standard of living so they working out their people will constantly watch you consumer markets to see. What is popular what is hot and what is consumers also make their wishes known through interest groups. An interest group is a private group that tries to influence government to actor vote. According to members interests.
There are thousands of interest groups that support a large variety of consumer interests. The role of government. Most americans expect the government to protect us as consumers to the right you will see nutritional facts. Which the government which food producers are required to provide by the government.
So that we know what we are putting into our bodies. One way in which the government does..
This is through public disclosure laws. These laws. Require companies to publish full information about their products prior to things. Prior to these types of laws.
You know such as the pure food and drug act. Which was passed in the early nineteen. Hundred s producers were allowed to put anything they wanted it to your faith in medicine and people frequently were came ill. So eventually these things became law.
Okay. The government also has a responsibility of protecting the health safety and well being of its citizens. Which is a matter of public interest public interest. The concerns of the public as a whole federal and state agencies.
Regulate businesses. Whose activities affect the public well being so the right you ll see an old advertisement for something they used to call an elixir these were unregulated medicines that were publicly sold on the 1800s and early 1900s and most of them were absolute frauds. They had nothing to provided nothing to help people s illnesses and frequently you made them worse. Safety environmental sanitary and other protections are enforced since the early 1900 s the government has increasingly regulated the activities of business.
While some regulations are necessary excessive regulation can lead to higher prices and unemployment. Some economists..
Believe that this happened in the 1960s and 70s a great deal deregulation took place in reaction to this in the nineteen eighties and nineties ok safety nets because wealth is spread unevenly in a free market economy some people live below the poverty threshold poverty threshold is the income level below that needed to support families for housewives. One way in which government deals with poverty is through welfare. We right transfer payments. While there is government lead to the poor government tries to redistribute the wealth through cash transfers or direct payments to the poor retired or disabled temporary assistance to needy families or tenth are the temporary welfare benefits that people can receive if they sink below a certain level 12th social security first of all the age and disability benefits and unemployment insurance is a fault if you lose your job for certain number of weeks and workers compensation state funds for workers injured on the job.
It has been found that workers compensation is a good law to have for state in that it reduces the number of bosses because workers with a serious injury. But not serious enough to permanently disable them can get some compensation without going through the course. The safety net also includes other benefits such as in kind benefits than as goods. The services such as food stamp.
The housing provided to the poor medical benefits. Medicare provides health insurance for the elderly and disabled education college. Grants and other opportunities and faith based initiatives. These are federal funds provided through church sponsored organizations ok that concludes our discussion of the american free enterprise system.
Thank you for viewing. And i look forward to seeing you in the ” ..
Thank you for watching all the articles on the topic The Free Enterprise System. All shares of thetruthaboutdow.org are very good. We hope you are satisfied with the article. For any questions, please leave a comment below. Hopefully you guys support our website even more.