“Free” Enterprise

In market economies co-ordination is carried out by market forces. In this context the entrepreneur is looked by standard economic theory as the coordinator of production: with the task of promoting the best combination of productive resources, once given the technology and the prices of the resources themselves. A closer look at the problem of co-ordination of economic activity suggests to consider the so called “free enterprise” as an organization whose task is to make innovative processes viable rather than to allocate given resources in view of efficiency. In this perspective firms and markets may appear as substitutes, but they are instead complementary devices for the co-ordination of economic activity over time.