Free enterprise vs. capitalism and/or Democracy?
One night when boredom ruled, I gave in and watched Michael Moore’s egomentary on Capitalism. I think I am the first to coin the term “egomentary” but it sits nicely with Mr. Moore’s view of himself because while his films have a few comments that make me understand the mind of the loud and crazy, the true purpose of his films is to make himself famous.
While his film focused on the evil of capitalism is based on companies (Wal-Mart was featured) buying life insurance on their employees and if they die, pocketing the proceeds of the policy. I think that is an attempt to piss off Wal-Mart’s employees he failed to make any real connection to life insurance and capitalism.
But he did totally confuse the viewer as to the difference between capitalism, free enterprise and democracy. His views confused mine so I went to Wikipedia to see how they defined the difference between the three. I searched for “Free Enterprise” and was re-directed to “Capitalism” which made me think even harder. Free Enterprise is not capitalism. With a little effort I finally found a definition of free enterprise under free markets.
As you read the definitions below, find out for yourself which is definition fits your description of the American economy. I believe free markets are the right definition for a successful, vibrant , self-sustaining economy but with one caveat: who are the players in the “market”?
As I have written before (http://DOI2.com?p=568) a free market works perfect when the market’s greed is controlled. You can’t control a market based on regulations and there is no CEO or board of directors who would develop and execute business plans where quarter to quarter trumps all else without the greed of the stock holders. No business can continually support the great returns without high level of risk to the organization. While the stock holders can put their money into a stock when its growing, they can also sell the stock and buy another fast growing company’s stock when the tide turns. Since it is the stock holder who drives the stock up and up (then down and down), free enterprise doesn’t work when the greed associated with capitalism truly drives the market.
The stock holder, not the CEO is to blame!
Capitalism is an economic system in which the means of production are privately owned and operated for profit; supply, demand, price, distribution, and investments are determined mainly by private decisions in the free market, rather than by the state through central economic planning; Profit is distributed to owners who invest in businesses, and wages are paid to workers employed by businesses. http://en.wikipedia.org/wiki/Capitalism
Democracy is a political form of government where governing power is derived from the people, either by direct referendum (direct democracy) or by means of elected representatives of the people (representative democracy). http://en.wikipedia.org/wiki/Democracy
A free market is a market without economic intervention and regulation by government except to enforce ownership (“property rights”) and contracts. It is the opposite of a controlled market, where the government regulates how the means of production, goods, services and labor are used, priced, or distributed. This is the contemporary use of the term “free market” by economists and in popular culture; the term has had other uses historically.
A free-market economy is an economy where all markets within it are unregulated by any parties other than those players in the market. In its purest form the government plays a neutral role in its administration and legislation of economic activity neither limiting nor actively promoting it (for example neither regulating industries let alone owning economic interests nor offering subsidies to businesses let alone protecting them from internal/external market pressures). http://en.wikipedia.org/wiki/Free_market
Business governed by the laws of supply and demand, not restrained by government interference, regulation or subsidy. also called free market. http://www.investorwords.com/2085/free_enterprise.html