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Laissez-faire (/ ˌ l ɛ s eɪ ˈ f ɛər / LESS-ay-FAIR, from French: laissez faire [lɛse fɛːʁ] ⓘ, lit. ' let do ' ) is a type of economic system in which transactions between private groups of people are free from any form of economic interventionism (such as subsidies or regulations ).
Although laissez-faire has been commonly associated with capitalism, there is a similar economic theory associated with socialism called left-wing or socialist laissez-faire, also known as free-market anarchism, free-market anti-capitalism and free-market socialism to distinguish it from laissez-faire capitalism.
He arrived upon his laissez-faire view of economics at a time of great opportunity and growth in the expanding British Empire. Laissez-faire policies stood in direct contrast to his supervisor Hobbes's Social Contract, developed from Hobbes's experiences during the greatest depression in England's history, the General Crisis.
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This is opposed to government regulations such as minimum-wage laws, competition laws, economic sanctions, restrictions on price fixing, or restrictions on contracting with undocumented workers. Freedom to contract underpins laissez-faire economics and is a cornerstone of free-market libertarianism.
The other was the political doctrine of laissez-faire economics, namely that all coercive government regulation of the market represents unjustified interference, and that economies would perform best with government only playing a defensive role in order to ensure the operation of free markets.
Laissez-faire economists [who?] argue that government intervention is the cause of economic crises, and that left to its devices, the market will adjust efficiently. As for the implication that dislocations cannot cause persistent unemployment, some theories of economic cycles accept Say's law and seek to explain high unemployment in other ways ...
Milton Friedman, the great advocate of laissez-faire economics, might have said it best in the oft cited but rarely read essay from September 1970: “It may well be in the long‐run interest of ...