Originally Posted by FBinNY

This is called front freewheel and while uncommon is still serviceable.

These systems are fairly robust, and rarely fail with parts breaking. Most of the time, rust, dried grease, or dirt are interfering with the action of the ratchet mechanism causing it not to engage solidly. Often you don't even need to disassemble, but can get by squirting in some solvent, working the mechanism to clean the insides, then flushing it out. Follow that by a rinse, dry and fresh oil and there's a decent chance that it'll function like new. The hardest part of the job being cleaning up afterward.

If all else fails you can replace it with a conventional rear freewheel system, but this involves some pricey parts - new crank and bottom bracket, and new rear wheel - and so is only worthwhile if you have used parts to transfer, or buy a used or crashed bike at a yard sale for the parts needed.