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Free Enterprise

Free Enterprise The term “free enterprise” is often used to describe America’s market system. Unfortunately, when the government sets rules and standards for the companies in the system, the result is not free enterprise. Free enterprise is defined by Wilson S. Johnson, President of the National Federation of Independent Business, as “the successful marriage of personal freedom with economic freedom”. (1) With free enterprise comes competitive pricing, more wealth which is distributed widely among the population, and small business survival–an important trait when over 50% of America’s non-government workforce is employed by small businesses. Deregulation brings free enterprise in a sense truer than it has existed in the past.

Businesses should not be regulated by the government. Deregulation in the eighties has brought new meanings to industries such as airlines, railroads, and telecomunications. Although adjustment proved traumatic, the airline industry grew from 36 to 156 individual airlines.(2) The result has been competitive prices, a huge web of new routes, and competitive employee wages. In 1980, Congress got rid of rules that encouraged railroads to keep unwanted routes, that forced prices too high to compete with truck and barge rates, or kept prices too low to make a profit. (3) Now railway companies are making deals with shippers at competitive rates allowing, once again, the railroads to be an important part of America. Since the breakup of AT&T in January 1984, almost every element of tele phoning has been open to competition.

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Numerous firms have been formed boasting low long-distance rates, car phone models, fiber-optic cable, and such. The complexity of customer’s bills and other confusing aspects of having so many different companies are predicted to work themselves out with time. It is obvious that deregulation has allowed competition to evolve and thrive in industries where it had never been allowed to. It is obvious that the presence of many companies in the market is beneficial to the consumer in terms of competitive prices and creating jobs. “The annual yield on a small savings account” has soared from 5.5 to over 9% since 1980.(4) About 80% of passengers travel by plane under a discount fare.(5) The cost of standard telephones fell one-third between 1982 and 1983.(6) Although the government has been allowing companies in these industries to compete, this lift of a guiding hand should not allow companies to risk health hazards of their consumers.

Just because the a irlines are allowed to compete should not imply the destruction of the Federal Aviation Administration’s safety rules under which airpalnes must fly, for example. Government’s role in business should be to see to it that the consumer is safe without limiting his choices and educated so he can make the best choices. Deregulation brings the greatest good to the greatest number of people by allowing free enterprise to flourish in even more of America’s big industries. Free enterprise had built America and will sustain America as a safe, educated, flourishing nation.


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