How Does The Free Enterprise System Distribute Jobs?

Introduction To Free Enterprise

The free enterprise consists of the economy dictated by the market. The entrepreneurs decide the products, prices, and services. The authorization helps the individuals set up new businesses and increase or decrease the price rates according to the overall market economy. So, Government does not decide the prices in this case. Let us know “How Does The Free Enterprise System Distribute Jobs?”.

How Does The Free Enterprise System Distribute Jobs?

Free Enterprise Job Distribution occurs according to the five principles Consumer Sovereignty, Right To Private Property, Freedom To Choose Business, Competition, and Right To Gain Profits. Though these principles represent freedom, they also include basic Government guidelines.

Free Enterprise System Distribute Jobs

Individuals can choose their careers and buy properties through the Free Enterprise because it gets associated with very few restrictions. However, Free Enterprise cannot stand alone. Government interruption gets needed in some cases. So, it might set rules related to the following:

Minimum and maximum working time for specific industries.

Product quality standards.

Minimum and maximum wages for some occupations.

Minimum and a maximum number of working days.

Educational qualification for some types of businesses.

The Free Enterprise Job Distribution gets designed according to the following five principles:

Consumer Sovereignty

Consumers contribute the most to the growth of a business. Thus, the industries must authorize the consumers to choose the products, suppliers, firms, and services. These decisions influence the business strategies. Consumer preferences get considered right from selecting the resources to producing an end product. Since not every consumer has the same taste, businesses must consider what most consumers prefer.


Imitation jewelry is trending nowadays. So, the businesses must choose the raw materials that do not cause rashes on the skin, are cheaper, and last long. Necessary preventive measures must get taken during the development. Finally, the selling price, quality, and quantity must be according to consumer requirements.

Right To Private Property

Individuals or groups that run a business have the right to own property. They can legally own the products, resources, and land where their business is. So, business owners must understand property rights and related laws. However, they must follow the rules related to the property ownership imposed by the state or nation government. Even if the property gets owned legally, the owners must not use it for illegal practices.


The state or nation government might impose laws related to private property such as property rates, taxes, rules, and more. Similarly, the owners might face property disputes.

Freedom To Choose Business

The business will no longer be hereditary. Individuals can choose their careers irrespective of their educational and family background. They might change the structure, business strategies, or whole business according to the changing market conditions. Similarly, they can upgrade their relations with different stakeholders. However, the occupation they choose must get legally accepted. Also, they must follow the basic guidelines required for the specific career path.


Most companies require the candidates to have at least a bachelor’s degree. But, the CEO of Tesla had announced that the candidates holding only a high school degree might apply to the company. Similarly, individuals that want to own a hotel do not have to be professional chefs. Many small-scale hotels hire chefs with related experience even if they do not have a related degree.


Competition plays a vital role in Free Enterprise because it leads to improved quality and reduced prices. These advantages are not only limited to America, but also every other country. However, the competition must get healthy, and if a company expands its business, competition increases. Antitrust laws encourage this concept because it helps both the consumers and the businesses. Competition boosts innovation and improves product-related processes resulting in better products and services.


Demand for face masks was on the rise during the Covid-19 period. The manufacturers gradually understood how a mask must be. Initially, many consumers did not know the difference between one-time and washable masks. The market got filled with single-layered washable masks. Then came multilayered masks. When the consumers started hunting for hand wash, sanitizers, and gloves, they stepped into that industry too. Each of them tried to offer cheaper products with additional benefits.

Right To Gain Profits

Every business survives on gaining profits, and it has the right to do so. Making profits also help the industry grow and compete and represents positive financial growth. To make a more profitable business, individuals can increase the product price or the number of customers or marketing strategies, set realistic goals, and track realistic goals. However, profit is not always in cash or sales. It gets represented on paper.

For Example

Amazon had a long journey from a small garage to a multinational conglomerate. Now we have Amazon lightsail, delivery partners, web services, RDS, EC2, prime, groceries, and more. Amazon has expanded its business across different industries and modified its business strategies from time to time to gain more profits. Similarly, Microsoft, Apple, Tesla, SpaceX, and other related companies have improved their business strategies to grow and earn more.


Now we have learnt “How Does The Free Enterprise System Distribute Jobs?”, Free Enterprise allows the consumers to choose and get the best for them. Similarly, it helps businesses to survive and grow with more freedom. The word Free in the Free Enterprise system indicates the freedom from government intervention to a limited extent. However, the state or nation government remains present to set basic guidelines and check whether both the parties follow them to maintain a balance between them. It can get better elaborated by the five principles mentioned in this article.

Frequently Asked Questions
  1. How Is Free Enterprise Different Than Capitalism?

Answer: The Free Enterprise system deals with the exchange of products and services, whereas Capitalism emerges from the free enterprise system where people get free to own businesses. The Free Enterprise system is an activity that gives rise to a pattern called Capitalism.

  1. What Are The Advantages And Disadvantages Of a Free Enterprise System?

Answer: Advantages of Free Enterprise system are:

Consumers are the key decision-makers.

Bureaucracy is absent.

Businesses can innovate.

Disadvantages of the Free Enterprise system are:

Businesses can innovate only for what the consumers want. They cannot build anything that consumers do not want.

It is too tricky to make the consumers buy what they do not require.

Healthy competition can turn into rivalry with ease.

How Does The Free Enterprise System Distribute Jobs?

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