What Is a Laissez-Faire Economy?

The laissez-faire economy (leave us alone) argues that the government should intervene in economic activities as little as possible and let the market make decisions.

Laissez-faire economy

According to Adam Smith and others

(1) Competition between enterprises is limited. Some large companies may monopolize an industry. Under these circumstances, they will raise prices and obtain high profits.

(2) The lack of competition and high profits make the company lose its motivation for high efficiency.

(3) Inequality of power and wealth.

(4) The company's behavior is harmful to society.

(5) Private enterprises will not produce products that are socially beneficial but not beneficial to themselves.

(6) Free market economy may lead to macroeconomic instability, high unemployment and decline in production decline, and price rises.

(7) In the sense of ethics, a free market economy, based on self-interest, may encourage selfishness, greed, materialism, and the supremacy of power.