We here politicians and the media talk about “Free Enterprise” Capitalism all of the time but we never hear an explanation of what “Free Enterprise” Capitalism is.  Capitalism is defined as “political and economic system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state” by the Wikipedia page “http://en.wikipedia.org/....  I think this definition is a good high level definition of Capitalism.  Now, what does “Free Enterprise” Capitalism mean?   Most of the information about “Free Enterprise” promotes the idea that it is an economic system that enables competition with minimal government interference.  The interesting thing about this definition is that “Free Enterprise” directly conflicts with the objectives of Capitalism, i.e. private business motivation to make profit.

    The idea that “Free Enterprise” enables competition with minimal government interference is contradictory and fallacious because the only way to enforce “Free Enterprise” governance on our capitalistic system is through government laws and regulations.  We learned this in the late 18th and early 19th centuries which is when Standard Oil was a monopoly and dominating entire markets.  Standard Oil used its monopoly to fix prices and intimidate entire regions of the country economically and politically.  Our government passed laws to prevent companies from being monopolies and dominating entire market segments.  Standard Oil was broken up as a result.  In my opinion, Standard Oil's actions in this period are the logical outcome of capitalism without “Free Enterprise” governance rules which force businesses to compete in an open market place.  This is why my reaction to Republican rhetoric which essentially says that our capitalistic system will take care of itself and government isn't necessary is “Do these people have any idea of what “Capitalism” is and do they have any understanding of US history and how our economy evolved to this point?”.

     During the past 30 years we have seen the consolidation of businesses in many different industries into large corporations and privately held companies.  These consolidations were justified based on reducing costs and improving business efficiency.  However, the effect of these consolidations was the elimination of competition in different industries in the US and reducing the “Free Enterprise” governing effect on the US capitalistic system.  In my opinion “Free Enterprise” represents the governance system used to keep “Capitalism” in check through competition and the governance system is enforced through government laws and regulations.  

     We have plenty of existing federal, state, and local laws to provide “Free Enterprise” governance for our capitalistic economic system.  These laws should be extened to cover both monopolies and oligopolies (US markets with a limited number of suppliers).  I hope that someday our politicians start using them.  These laws should be applied to all industries in the US. Yes, the big banks are oligopolies and should be broken up.  Yes, players like Exxon and BP are oligopolies in the Oil industry and should be forced to compete regionally and locally through laws and regulations.  Yes, Verizon, Sprint, AT&T and Time Warner Cable are oligopolies or regional monopolies and should be broken up to provide local competition for consumers.  All I can say to our politicians is to “Do your job!” and our economy will grow and our capitalistic system will work.  If not, the US economy will be stuck in a mode of slow and anemic growth and entire segments of our economy will be dominated by a small number of Monopolies / Oligopolies.

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