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What Are the Advantages of Laissez-Faire?

John Lister
John Lister

Laissez-faire is a philosophy of economics that minimizes or reduces government intervention or restrictions. Historically it referred mainly to international trade, but today it also involves domestic policies. Supporters argue that the advantages of laissez-faire are that a free market makes the most efficient use of resources, that it avoids people becoming reliant on state support, and that it encourages creativity and growth.

Laissez-faire is a French term that roughly translates as "leave alone." It refers to government intervention in an economy. In the 18th and 19th centuries, the term was largely used to describe an opposition to import tariffs that were designed to distort prices to favor domestic producers. In the 20th and 21st centuries it became more widely used in reference to domestic policies such as taxation levels, restrictions on private business and government spending.

It is argued that a free market makes the most efficient use of resources under a laissez-faire approach to economics.
It is argued that a free market makes the most efficient use of resources under a laissez-faire approach to economics.

The most common claims for the advantages of laissez-faire are based around a belief in the power of the free market. Supporters say that unrestricted capitalism means that those who make the best decisions about what products and services to offer will flourish, while those who make bad decisions will fail. It's also argued that without government interventions, how resources are used is decided by the way people choose to spend their money, thus increasing efficiency overall. These arguments work on the logic that the combined actions of the public, each acting from self-interest make for more effective economic decisions than a central government can make.

These advantages of laissez-faire also applied in an international context according to supporters of the philosophy. It might have appeared that in the short run, it would hurt a country to not have any barriers to imports. According to the laissez-faire theory, however, opening a country up to competition would force domestic producers to become more efficient, helping the country in the long run. It was also argued that removing tariffs could help domestic producers import components more cheaply, thus helping them produce cheaper goods.

It has also been argued that reduced reliance on the state is another of the advantages of laissez-faire because individuals are forced to become more productive or make better decisions in order to do well financially. To some extent this is a social or philosophical argument about personal behavior. There is an economic element as well though, with laissez-faire supporters saying the need for people to be economically self-reliant will give added incentive to come up with creative ideas and processes that wind up benefiting everyone.

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Discussion Comments


It's hard to pick a side. Both sides have some good points.


@JimmyT - I have to disagree because of certain misunderstandings people have with the laissez-faire approach. The laissez-faire approach does not mean that the government is entirely out of the loop. It is impossible to have a successful economy without some regulation of business practices and laissez-faire can also mean that the government is not entirely involved with the economy, but does have a little bit of intervention.

More regulation puts a stranglehold on the economy and does not allow it to grow. That is why it is almost always best for a government to stay out of the economy, however it is not at all conceivable for them to stay out entirely. They have to be there to make sure that the business practices in this country are held in check or else the economy can also go bad in the opposite direction.

The common misconception is that in a laissez-faire type of economy that the government is completely out of the loop and this is never the case. There is always some type of regulation, but it is simply a matter of how much there is.


I think that the laissez-faire approach is simply something that is asking for trouble nowadays. We saw what happened at the turn of the 20th century with the unethical business practices and corruption that occurred across the United States and it can happen again using this economic approach.

Now the government could have allowed the laissez-faire approach to continue back then and simply enforce ethical practices, however this cannot happen nowadays due to the more complex nature of businesses. If the government was not constantly over the economy's shoulder the ethics of this country would turn into a cesspool of corruption so much worse than at the turn of the twentieth century.

Although it was possible to have a laissez-faire approach and a little government regulation those days are completely over and there is no way this approach is possible nowadays in our current complex business world.


@Izzy78 - I completely agree. The laissex-faire approach allows for businesses to grow and to try new things. The government can always create regulations that they need to follow, simply to keep ethical practices together, and allow the businesses to simply run themselves in the matter they feel is right.

Although some people think that more government regulation is a good thing all it does is restrict businesses from growing and expanding in some areas, necessary for growth. Say a business has to continually follow strict regulations, they cannot create as many international business relations or expand their businesses to the point that it will help the economy.

There should be some government regulation, but it should not be a stranglehold on the businesses of this country. If done in the right way the laissez-faire approach can greatly benefit a country's economy and allow it to prosper.


Back around the turn of the 20th century the United States took a laissez-faire approach to the nations economy and it worked. There were several problems though, such as corruption and grafting and this became a major source of discussion across the country, simply due to the way business was back then.

However, these problems were not created out of the laissez-faire approach entirely. That Industrial Revolution was in full force and immigrant labor forces were looking for work. The problems that occurred concerned the government letting the big businessmen become unethical and have suspicious business practices, sometimes resulting in exploitation of labor.

Had there been some regulation as far as ethics were concerned, the problem would not have been so bad. However, as far as success of laissez-faire the country was gathering more revenues and business was at a point it had never been before. Laissez-faire allowed the business of the country to grow and had they had some regulation concerning ethics the laissez-faire approach would not have gotten as much of a bad name as it has throughout history.


@ceilingcat - Imposing tariffs on foreign products is a horrible idea. Do you have any idea how many of our popular products come from overseas? For example, some of the best cars available in this country are from Asia! People should choose products based on their merit, not because of artificial pricing!

I think laissez-faire is a fine idea. As the article said, it encourages creativity and innovation. Businesses shouldn't be reliant on the government for help They should succeed based on their product or services, not because they got assistance from the government!


I think laissez-faire is a fairly bad idea. Businesses need to be regulated, at least to some extent. We all know most business CEO's are just out to make a profit. Most businesses don't care about "doing the right thing" or "fair business practices."

If we didn't have some kind of legislation regarding business, I think that we would all lose out. I don't think regulating businesses causes people to be less self-reliant at all. It just protects customers from unfair business practices!

Also, I think we could stand to impose some tariffs on foreign products. Our economy is doing so poorly that I think American businesses could really use the boost!

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    • It is argued that a free market makes the most efficient use of resources under a laissez-faire approach to economics.
      By: Michele Sacchetti
      It is argued that a free market makes the most efficient use of resources under a laissez-faire approach to economics.