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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

laissez-faire

Of, relating to, or being an economy devoid of government interference.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
.While laissez-faire economy was the product of deliberate state action, subsequent restrictions on laissez-faire started in a spontaneous way...
Frenchmen in this period, the author argues, were particularly touchy about matters of personal deference, because these matters had become democratized by liberal political principles and by a laissez-faire economy. Honor was no longer maintained by Old Regime estates and corporations; every man now had to do so on his own, and deeply felt problems naturally arose in the confusion of a more open society.
Lebanon's unique political system and its liberal, laissez-faire economy took shape between the two world wars.
In laissez-faire economy, market forces determine everything, including the price structure.
This may be further delayed because what these countries will revert to is not a true laissez-faire economy but a compromise with welfare socialism," where massive ameliorations of the workers' lot - assuming these can be achieved - will stem the tide for a while.