So, in essence, democracy and the free economic system function in the same manner. They provide far greater freedom to citizens than other governments and institutions. Democracy, in my opinion, has both positive and negative aspects. That's great because you have so much flexibility. The free enterprise system is also very flexible; it allows people to choose what business they want to be in or work at. It provides individuals with the power to decide what role they want to play in our society and economy. This is a good thing for everyone because not everyone wants to be an actor or actress, for example. Free markets allow people to pursue their interests in a peaceful way by providing them with alternative ways to get what they need and want. In conclusion, the free enterprise system is good because it gives us more choice and control over our lives.
The link between democracy and a free enterprise system is that a free enterprise system occurs only in democratic countries. This is due to the fact that people have the right to property as well as the right to profit. The government owns enterprises in other nations that do not have a free enterprise system. In these countries, governments either own 100% of the companies or they control them through state-owned institutions.
When people are given rights, but not responsibilities, it becomes a burden rather than a blessing. For example, if I grant you the right to speak without limit at meetings, this is a good thing; however, if I don't ask you to stop when others want to sleep, this is a problem. The same thing applies to property ownership. If I give you land, then I must also give you the responsibility for its management. Otherwise, you are just a tenant, with no obligation to maintain the property or pay taxes on it.
In a free enterprise system, people are responsible for making decisions about what role they will play. If you choose to work for a company, then you should be willing to accept their rules. You cannot expect to get paid every week if you refuse to come into work or quit after only one day's work.
People also have the right to organize themselves into groups to help each other.
The free enterprise system is a democratic approach of structuring an economy. People vote for what they want in a democracy. Buyers "vote" in a democratic economy by electing to spend their money on some things rather than others. However, for the most part, the colonies' economies grew without government intervention. The main exceptions were when the colonies wanted to trade with each other or with Britain; then they would create trade organizations such as the British East India Company or the American Revolution was fought over trade policies.
In modern-day America, businesses seek to make profits by providing consumers with products and services that they want at prices they can afford. Just like people, businesses are not always successful in doing this. But because there is competition in the market place, the companies that are able to provide value beyond price will survive and grow.
This is why the free enterprise system is a democratic way to organize an economy. It provides individuals with the freedom to decide how they want to spend their money, so long as they are not harming others in the process. And through competition, the best values/products will rise to the top and be chosen by consumers.
In addition to being more ethical than socialism, free enterprise has a track record of boosting wealth and decreasing poverty. Today's economic system in the United States is neither free enterprise nor socialism. It is a cross between the two, with a heavy dose of crony capitalism.
Under free enterprise, businesses are owned by their employees or investors. They receive one-time grants of capital equipment (such as computers), non-returnable deposits (for future expenses), licenses to use intellectual property (such as patents) from their owners, and even some form of health insurance. In return, they must give up part of their profits each year to their employees in the form of wages or benefits or to their investors through dividends or share purchases.
Socialism takes free enterprise away from individuals and puts it under the control of either a government or a trade union. There is no private ownership of business assets in socialism; all assets are considered the property of the community. Profit making is not allowed. Companies may be privately owned but they have no choice but to operate for profit if they want to stay in business.
Free enterprise exists within a country's borders. Socialism exists across national boundaries. Many countries that call themselves socialist have large industries that function much like companies under free enterprise conditions.