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CH 1] Business 101 1-19

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ownership with heavy intrusive regulations on private ownership. Advocates of
private enterprise often classify mixed economies as socialist if there is a high degree
of public ownership. However, such countries still have far more private ownership
than is found in socialist nations.
The proportions of private and public enterprise vary widely in mixed economies.
The mixes are also changing. In France, many government entities are now operated
as private enterprises. This trend toward converting government enterprises into

privately held companies is referred to as privatization.

A Comparative Note
Private enterprise has proved to be the most effective economic system for any
economy. It has provided a high degree of economic freedom, a low cost of living,
substantial product choice, high earnings, provided for considerable public welfare,
and many other economic benefits. The United States became a world power because
of the private enterprise system and the businesses that operate within its framework.
Major U.S. corporations are among the world's leading firms. Industry in the
United States is extremely diversified. Thousands of business enterprises exist in
nearly every conceivable commercial activity.
Other economic systems aspire to the high levels achieved by the U.S. business
system. Those countries who function with low productivity restrict private property
and enterprises through their laws and regulations.
The principals of business are the same for the individual and household as
they are for John Deere, General Mills, or General Motors. The difference is
the size of the checkbook and financial resources.
Comparing our poor with the world’s poor and they don’t look so poor. Imagine
our poor: they have an automobile, two televisions, radios, and indoor toilets, a
personal cell phone, with an income of $26,200 per year for a family of four. The
world’s poor cannot claim that condition with nearly half of the world’s population
(apx. 3.5 billion people) living on $2.50 per day, which is $912.50 per person. Table
1.3 represents a sample of a few standards of living conditions in five countries.

CONCLUDING THOUGHTS
As you continue through your course and this book, it will become apparent that
we are all touched and influenced by business. Nobody works for free, not even those
running large “Non-profits” because they are relying on an Internal Revenue Tax
regulation for their designation. Non-profits have to have income to pay for their
employees (no one works for free), to pay their rent, electric, gas, water and trash bills
when they come due. If they cannot, then they shut their doors. You are the same.

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