Development of Free Enterprise
Economy in the U.S.
From mercantilism to market
economy
http://www.bloomberg.com/news/2012-08-17/ryan-revives-old-national-fixation-on-free-enterprise-.html
What Mercantilism is…
• In the beginning, England created 13 Colonies
…and it was good.
• England established colonies based on MERCANTILISM
– expand TRADE,
– increase WEALTH
– expand POWER
• The colonies existed to make $$$$$ for England
– The Navigation Acts restricted American colonial trade
– England had ‘monopoly’ on American economic activities
– The colonists resented England’s control and smuggled!
– This led to future restrictive laws, such as the Sugar Act….
What Mercantilism looks like…
http://kindreda.edublogs.org/files/2010/09/blog6.jpg
“Triangular Trade”
Colonies exported raw materials to England and were a market for England’s finished goods.
What the Navigation Acts look like…
http://www.mrvanduyne.com/revcauses/tightgrip02.htm
What Free Enterprise is…
• After the Revolution, Americans wanted to be…
– economically self-sufficient
• 1st Secretary of Treasury Alexander Hamilton wanted
– an economy based on industry
– government support to ‘grow’ U.S. industry
• protective tariffs
• capital from private investors and National Bank
• Infrastructure to support business (roads, canals, railroads…)
• Free enterprise – the freedom of
private business to operate competitively
for a profit with little government regulation
Foundations of Free Enterprise
CAPITALISM – the freedom of
individuals to invest their
CAPITAL (money) in businesses
of their choice in hopes of
making money (profit!)
Businesses are FREE to
operate with little
government regulation
Businesses can keep
PROFIT to reinvest
& grow the
company
Businesses’ product
decisions (quality,
quantity & price) are
driven by CUSTOMERS
COMPETITON
fosters product
development and
lower pricing – good
for business and
customers!
Ownership of private property (and
other assets) by individuals or businesses
allows full control of decision making
http://www.socialstudieshelp.com/Images/EcoPillars.jpg
Foundations of Free Enterprise
CAPITALISM – the freedom of
individuals to invest their
CAPITAL (money) in businesses
of their choice in hopes of
making money (profit!)
Businesses are FREE to
operate with little
government regulation
Businesses can keep
PROFIT to reinvest
& grow the
company
Businesses’ product
decisions (quality,
quantity & price) are
driven by CUSTOMERS
COMPETITON
fosters product
development and
lower pricing – good
for business and
customers!
Ownership of private property (and
other assets) by individuals or businesses
allows full control of decision making
http://www.socialstudieshelp.com/Images/EcoPillars.jpg
Foundations of Free Enterprise
CAPITALISM – the freedom of
individuals to invest their
CAPITAL (money) in businesses
of their choice in hopes of
making money (profit!)
Businesses are FREE to
operate with little
government regulation
Businesses can keep
PROFIT to reinvest
& grow the
company
Businesses’ product
decisions (quality,
quantity & price) are
driven by CUSTOMERS
COMPETITON
fosters product
development and
lower pricing – good
for business and
customers!
Ownership of private property (and
other assets) by individuals or businesses
allows full control of decision making
http://www.socialstudieshelp.com/Images/EcoPillars.jpg
Foundations of Free Enterprise
CAPITALISM – the freedom of
individuals to invest their
CAPITAL (money) in businesses
of their choice in hopes of
making money (profit!)
Businesses are FREE to
operate with little
government regulation
Businesses can keep
PROFIT to reinvest
& grow the
company
Businesses’ product
decisions (quality,
quantity & price) are
driven by CUSTOMERS
COMPETITON
fosters product
development and
lower pricing – good
for business and
customers!
Ownership of private property (and
other assets) by individuals or businesses
allows full control of decision making
http://www.socialstudieshelp.com/Images/EcoPillars.jpg
Foundations of Free Enterprise
CAPITALISM – the freedom of
individuals to invest their
CAPITAL (money) in businesses
of their choice in hopes of
making money (profit!)
Businesses are FREE to
operate with little
government regulation
Businesses can keep
PROFIT to reinvest
& grow the
company
Businesses’ product
decisions (quality,
quantity & price) are
driven by CUSTOMERS
COMPETITON
fosters product
development and
lower pricing – good
for business and
customers!
Ownership of private property (and
other assets) by individuals or businesses
allows full control of decision making
http://www.socialstudieshelp.com/Images/EcoPillars.jpg
Foundations of Free Enterprise
CAPITALISM – the freedom of
individuals to invest their
CAPITAL (money) in businesses
of their choice in hopes of
making money (profit!)
Businesses are FREE to
operate with little
government regulation
Businesses can keep
PROFIT to reinvest
& grow the
company
Businesses’ product
decisions (quality,
quantity & price) are
driven by CUSTOMERS
COMPETITON
fosters product
development and
lower pricing – good
for business and
customers!
Ownership of private property (and
other assets) by individuals or businesses
allows full control of decision making
http://www.socialstudieshelp.com/Images/EcoPillars.jpg
Foundations of Free Enterprise
CAPITALISM – the freedom of
individuals to invest their
CAPITAL (money) in businesses
of their choice in hopes of
making money (profit!)
Businesses are FREE to
operate with little
government regulation
Businesses can keep
PROFIT to reinvest
& grow the
company
Businesses’ product
decisions (quality,
quantity & price) are
driven by CUSTOMERS
COMPETITON
fosters product
development and
lower pricing – good
for business and
customers!
Ownership of private property (and
other assets) by individuals or businesses
allows full control of decision making
http://www.socialstudieshelp.com/Images/EcoPillars.jpg
What Free Enterprise looks like….