Which economic system allows individuals and businesses to compete for profit with minimal government interference?

The economic system that allows individuals and businesses to compete for profit with minimal government interference is characterized as free enterprise. In a free enterprise system, the market largely determines prices, production, and distribution of goods and services. This approach emphasizes individual initiative and the ability of businesses to respond to consumer demand, fostering competition and innovation.

This system supports the idea that when businesses and individuals are free to operate with limited restrictions, they are more likely to create wealth and improve economic conditions. The competition that arises naturally within this framework fuels efficiency and customer choice, which are vital components of modern economies.

In contrast, other economic systems like socialism and communism involve greater government control and regulation over resources and businesses, substantially limiting the level of competition and individual profit motives. Mercantilism, historically characterized by government regulation aimed at increasing national power through strict control of trade and commerce, does not allow for the same level of individual entrepreneurial freedom found in a free enterprise economy. This makes free enterprise distinct in its encouragement of a competitive market environment with minimal government oversight.