laissez-faire

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Laissez-Faire

A term describing an economic theory that promotes government non-intervention. Laissez-faire theory states that most government interventions make an economy less efficient and hamper growth. According to this, government ought to restrict itself to safeguarding the right to private property. In its extreme form, it is opposed to any law limiting economic activities short of theft or extortion. Laissez-faire economists are philosophically opposed to minimum wages, protectionism, antitrust laws, and most laws intended to benefit workers at the expense of employers. Proponents of laissez-faire economics argue that it benefits employers and workers alike. For example, a man may open a mechanic shop to make money for himself, but, in the process of doing so, he may hire otherwise unemployed mechanics and service otherwise broken cars, which then facilitates business for the rest of the community. If there were environmental or wage restrictions on his business, however, he might not hire as many employees and may not start the mechanic shop at all. Critics of the theory contend that its benefits are overstated and that a laissez-faire structure without regulation lends itself to the creation of bubbles, which harms both businesses and their employees. See also: Reaganomics, Invisible Hand, Keynesian economics, Marxism, Regulation.

laissez-faire

Of, relating to, or being an economy devoid of government interference.

laissez-faire

an economic doctrine that emphasizes the superiority of‘free’ markets (see PRICE SYSTEM) over state regulation of individual markets and of the economy in general. Proponents of laissez-faire argue that a PRIVATE-ENTERPRISE ECONOMY will achieve a more efficient allocation and use of scarce economic resources and greater economic growth than will a CENTRALLY PLANNED ECONOMY where the government owns and directs the use of resources. This inference is based on the rationale that private ownership of resources and maximum freedom to deploy these resources in line with profit signals will create strong incentives to work hard and take risks. State bureaucracies, on the other hand, can tend to stifle enterprise and initiative. See CLASSICAL ECONOMICS, RATIONALIZATION, PRIVATIZATION.
References in periodicals archive ?
Nothing in this statement is contrary to laissez-faire capitalism.
Following the Civil War, the American political-economic system began to drift faarther from the model of laissez-faire capitalism, as governments at the state and federal level passed laws to regulate the market.
And while Sinasac takes pains to suggest that his protagonist was no socialist in Catholic clothing, he paints Somerville as a constant critic of laissez-faire capitalism, and its tendency to stifle social reformers with a radical-atheist tag.
Schwartz dismisses the idea that the turn away from moral reformism had to do with its patent inadequacy, with a legitimate critique of laissez-faire capitalism, or even with the emergence of alternative, more structurally-oriented reform movements.
They were begging that the banks not divest their gold holdings lest it expose them to the reality of market forces--a hard sell in these days of laissez-faire capitalism, but one which they won by playing a race card.
Although I have made a fortune in the financial markets," he wrote, "I now fear that [uncontrolled] laissez-faire capitalism and the spread of market values into all areas of life is endangering our open and democratic society.
Welfare has always pricked the hard faith of many Americans in laissez-faire capitalism and frontier individualism.
What: A talk that will explain why laissez-faire capitalism is the only moral and practical solution to the current financial crisis.
They might well start by reading Deepak Lal's Reviving the Invisible Hand: The Case for Classical Liberalism in the Twenty-first Century, an uncompromising and insightful defense of the classical-liberal case for laissez-faire capitalism and free trade that should be on every liberal's shelf.
John Paul did not advocate a return to the unregulated market of 19th century laissez-faire capitalism.
Added to this older conservatism were the southland's 'cowboy capitalists,' the new boom-time entrepreneurs who made their fortunes in the post--World War II era of affluence and spent their capital and their energy spreading the gospel of laissez-faire capitalism and an anti-Washington ethos.
And while Kuttner probably goes further in his rejection of laissez-faire capitalism than can be justified by his evidence, he makes an important contribution in his new book by discrediting the rhetoric of the laissez-faire policy makers.