Free enterprise is the economic system in which the means of production are subject to private control. Advocates of free enterprise believe that an economy is most productive if the government interferes as little as possible with individual initiative. This has been called laissez-faire. Economic decisions are influenced by the wants of consumers, rather than by government directives. Prices of goods are set by supply and demand operating in a competitive market. Basic characteristics of free enterprise are private property, the profit motive, and competition.
In a free enterprise economy, producers, consumers, and workers are free to act in their own self-interest. Each individual is free to choose his work and to retain the fruits of his labor. Each has the right to own property. The profit motive is the most important incentive in a free enterprise economy.
