The free enterprise system in the USA

The free enterprise system in the United States means that there is not a government controlled economy.

It is a system where the government attempts not to intervene in the economic processes of the country. That is to say, the Americans believe in the free forces of capital.

The share of government expenses in the gross domestic product amounts to 35 percent nowadays. In addition, the portion of taxes and social security contributions in the economic output of the United States comprises approximately 29 percent. In comparison to other countries, the U.S. has a rather low ratio of government expenditures to gross national product and an almost equally low tax and contribution ratio.

Moreover, individual branches in the U.S. economic system are regulated to a smaller extend by restrictions than it is the case in other European countries.

One of the advantages of the free enterprise system in the United States is a high degree of entrepreneurial initiative.

Furthermore, this concept allows economic innovations and developments which can be enforced very quickly.

Although this seems to be a consummate system, there are still disadvantages that one has to discuss.

The free enterprise system is mainly detrimental to the well-being of the workforce. A manpower surplus, for instance, results in extremely low wages. Also, there is a risk of unemployment as well as one of child labor.

At this point it is interesting to note that jobless Americans can only receive unemployment benefit for 26 weeks. Afterwards they have to go to the social welfare department.

Considering the disadvantages which the free enterprise system entails, this remains a controversial issue of high importance.