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7 October, 07:30

How does a free enterprise economic system differ from a communist economic system?

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  1. 7 October, 11:28
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    In a communist economic system, there is common ownership of the means of production, while in a free enterprise economic system, there is private ownership of the means of production.

    For example, under communism, the workers of a factory own the factory, while under a free enterprise economic system, the workers do not own the factory, the factory is owned by other people who benefit from the profits.

    In a communist economic system, the economy is planned. Either a central or a local authority determines what to produce, for who, and how. In a free enterprise economic system, the economy is allowed to move freely, and all consumers and producers indirectly influence the direction of the economy through the forces of supply and demand.
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