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Laissez-faire economics

Definition

Laissez-faire economics refers to an economic system where the government does not interfere with or regulate business activities. It is based on the belief that the economy functions best when businesses operate freely without government intervention.

Analogy

Imagine a school cafeteria where students can choose what they want to eat and when they want to eat it, without any rules or restrictions from teachers. Laissez-faire economics is like this cafeteria, where businesses have the freedom to make their own decisions without government interference.

Related terms

Free market: A free market is an economic system characterized by voluntary exchanges between buyers and sellers, with minimal government regulation.

Adam Smith: Adam Smith was a Scottish economist who advocated for laissez-faire economics in his book "The Wealth of Nations."

Invisible hand: The concept of the invisible hand suggests that individuals pursuing their own self-interests in a free market ultimately benefit society as a whole.