Laissez-faire Economics
Definition
An economic theory that advocates for minimal government intervention in the economy, allowing individuals to make their own business decisions.
Analogy
Think of laissez-faire economics like a soccer game where the referee only steps in when absolutely necessary. The players (businesses) are free to play (operate) as they see fit, with the referee (government) only intervening to enforce basic rules and prevent unfair play.
Related terms
Free Market: An economic system where prices are determined by unrestricted competition between privately owned businesses.
Capitalism: An economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state.
Supply and Demand: Economic model of price determination in a market; it postulates that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded equals the quantity supplied.
"Laissez-faire Economics" appears in:
Subjects (2)
Study guides (2)
Practice Questions (10)
- Which Enlightenment philosopher advocated for laissez-faire economics?
- Who supported laissez-faire economics during this period?
- Who is associated with the theory of laissez-faire economics which directly challenged the concept of mercantilism?
- What distinguishes laissez-faire economics from mercantilism?
- What was the primary cause of Britain's shift from mercantilism to laissez-faire economics during its period of ascendency?
- Who championed laissez-faire economics during the era of industrialisation?
- Who was a key advocate of laissez-faire economics during the 19th century?
- Who among the following was instrumental in implementing laissez-faire economics during the 19th century?
- How might Herbert Spencer's belief in laissez-faire economics have influenced his support for Social Darwinism?
- Who used ideas from biology to justify laissez-faire economics, coining phrases like "survival of the fittest" in human societies?
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