free enterprise

Economic system where private capital is used in business with profits going to private companies and individuals. The government plays a relatively small role in providing goods and services, but it is responsible for upholding laws which protect rights to own property, and for maintaining a stable currency. In practice most economies, even capitalist ones (see capitalism), are mixed economies– a hybrid of free and command economies.

The two largest free‐market economies in the world are (1994) the USA and Japan, where the private sector provides about 70% of total output or GDP (gross domestic product) and the public sector only 30%.