Laissez-faire
Definition
Laissez-faire is an economic theory that advocates for minimal government intervention in business affairs beyond what's necessary to maintain peace and property rights.
Analogy
Imagine laissez-faire as a hands-off teacher who lets students learn on their own without much interference. Similarly, in a laissez-faire economy, businesses operate without much government regulation or interference.
Related terms
Free Market: This is an economic system where prices are determined by unrestricted competition between privately owned businesses. It's closely associated with the concept of laissez-faire.
Capitalism: This is an economic system characterized by private ownership of goods and production. The idea of laissez-faire is central to capitalism as it allows businesses to operate freely with little government intervention.
Supply and Demand: These are economic forces that determine the price of goods in a free market. In a laissez-faire approach, supply and demand are left to naturally balance each other out without government interference.
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