
Constitutions are economic documents as well as political documents
 Our nation’s founders believed that economic freedom as well as political freedom are essential for national prosperity & growth

Numerous provisions support and encourage the operation of a market economy
 “Law of the land” (The U.S. Constitution) defines the essential features for our economy
1. PRIVATE PROPERTY

Labor resources

Natural resources

Capital resources

Goods & services produced or owned by private individuals/institutions rather than by government.

Private ownership combined with the freedom permits people to obtain and use resources as they choose

2. FREEDOM OF ENTERPRISE AND CHOICE

Private entrepreneurs are free to obtain and organize resources (goods & services) & to sell them in markets of their choices.

Consumers are at liberty to buy that collection of goods & services that best satisfies their economic wants.

Workers are free to seek any jobs for which they are qualified.
3. MOTIVE OF SELF-INTEREST

"Invisible Hand" that is the driving force in a market economy

Consumers= Greatest satisfaction from their budgets

Entrepreneurs= Highest profits for their firms

Workers= Highest possible wages and salaries

Owners of property= Highest possible prices from the rent
& sale of their resources.

Economic rivalry
4. COMPETITION
*Buyers & sellers are free to enter or leave any market
*Buyers & sellers acting independently

It is competition, not government regulation
*Limits the potential abuse of that power by one
economic unit against another
5. SYSTEM OF MARKETS AND PRICES

Markets are the basic concept of our economy


Market brings buyers & sellers of a particular good or service into contact with one another

Sellers & buyers are registered on the supply & demand sides of various markets

The prices participants in markets pay revise their free choices in furthering their self-interests.
6. LIMITED GOVERNMENT

Competitive market economy promotes the efficient use of its resources.

Self-regulating & self-adjusting economy, no significant economic role for government is necessary.

However, a number of limitations & undesirable outcomes associated with the market system result in an active, but limited economic role for government.
Preamble to the Constitution
We the People of the United States, in Order to form a more perfect
Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare , and secure the
Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.
Used to explain: Promote the General Welfare
1. Minimum wage laws
2. Social Security
3. Unemployment Compensation
4. Occupational safety regulations

Read China’s Constitution
Assignment
Discuss how each economic provision in this document defines the economic role the government in China will play.
Each student write an essay comparing and contrasting how the differing provisions in the two nation's constitutions can and have resulted in different types of economic freedoms and systems.