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.
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.