What Is Laissez-Faire Capitalism?

Laissez faire or non-interventionism, derived from the French "laissez-faire" ("let him do, let him go, let him go"), means that the government lets the trader freely trade. The term was first used in the dictionary by peasantism in the 18th century to oppose government interference in trade. The term became synonymous with free market economics in the early and mid-19th century. Laissez-faire opposes government interference in the economy and the government levies taxes other than sufficient to maintain peace, law and order and property rights. In early European and American economic theories, laissez-faire economic policies were often compared to the negative mercantilist economic policies, which were found in Britain, the United States, Germany, Italy, Spain, France, and other Western European countries. When they rise, they all play a dominant role.

Laissez-faire

Laissez faire or non-interventionism, derived from the French "laissez-faire" ("let him do, let him go, let him go"), means that the government lets the trader freely trade. The term was first used in the dictionary by peasantism in the 18th century to oppose government interference in trade. The term became synonymous with free market economics in the early and mid-19th century. Laissez-faire opposes government interference in the economy and levies imposed by governments other than those sufficient to maintain peace, law and order and property rights

Laissez-faire economic theory is considered pure and economic

Most modern industrial countries today do not thoroughly adopt the principle of laissez-faire, and usually still have some government intervention in the economy. These interventions include

Since both laissez-faire and free markets are quite idealistic ideas, critics have also criticized them, criticizing these idealized market economics theory in the real world is not applicable. Some critics have also criticized laissez-faire theory of property rights, criticizing it for having an inappropriate bias against private interests over public interests. Critics believe that the market adjustment mechanism cannot properly handle market failures, and therefore requires a central government or mechanism to manage it. Critics believe that laissez-faire is merely an ideological decoration that masks regional protectionism and typical conservative politics behind it, and criticizes laissez-faire for economic expansionism (or economic imperialism) controlled by elites ).

Some criticisms of market failures are:

(1) A market that is not subject to government intervention will lead to a monopoly. The most frequently cited example is standard petroleum. However, it should be noted that when Standard Oil was charged with monopoly, there were more than 100 competing oil refiners in the market, and when the trial results in 1911 led to government intervention, Standard Oil s market share had already changed from 1890 88% at the time of the charge fell to 64%.

(2) An unsupervised market will generate fraud like Enron. However, laissez-faire does not advocate "no supervision." Under the laissez-faire system, fraud is illegal, and the government should step in to prevent fraud. Laissez-faire does not mean that there is no regulation, but that regulation should be limited to protecting individuals from fraud and violence.