Free enterprise is an economic system in which private individuals and businesses have the freedom to engage in commercial transactions without government interference such as controls, subsidies or regulations beyond what is necessary for maintaining basic order, protection of citizens and enforcement of contracts. This system encourages risk-taking and rewards innovation and hard work which leads to greater productivity, economic growth and higher living standards for society as a whole. However, some level of government intervention may still be needed to address issues such as public goods, externalities, and monopolies that free markets do not always handle well.