Laissez-faire facts for kids
Laissez-faire is a big idea in economics and politics. It comes from a French phrase that means "leave alone." This idea suggests that the government should not get involved in how business and the economy work. Instead, decisions about money and trade are left up to individual people and companies.
Those who support laissez-faire believe that when businesses compete freely without rules, it's the best way for things to get better and for society to make progress. They think that a free market (where there are no government rules) naturally creates a good balance between what people want to buy (called demand) and what businesses can sell (called supply).
This idea is thought to have started in the 18th century. There's a story about a meeting between the French finance minister, Colbert, and a businessman named Le Gendre. Colbert asked how the government could help businesses. Le Gendre supposedly replied, "Let us do what we want to do."
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The History of Laissez-faire
The idea of governments staying out of the economy has a long history.
Early Ideas in Ancient China
In Ancient China, there were different ways of thinking about how the government should run things.
- Taoism believed the government should almost never interfere with the economy.
- Legalism thought the government (or the state) should have the most power. They helped create the strong government system in traditional China.
- Confucianism was somewhere in the middle of these two ideas, but it was closer to Legalism.
Laissez-faire in the 1800s
During the 19th century, laissez-faire grew into an important social and economic idea. Many people believed that if the government got involved in business, it would either be harmful or simply not work well.
From a social point of view, some thought that if the government tried to help poor people, it would make them lazy and too dependent on government help.
Economically, there was a big discussion in Europe and the United States at this time. People debated whether free trade (trading without taxes or rules between countries) or tariffs (taxes on imported goods) would help the economy grow the most.
Until the 1840s, many countries preferred protectionism. This meant they used tariffs to protect their own businesses from foreign competition. For example, in Britain, the Corn Laws put high taxes on corn brought in from other countries. This was done to protect British farmers and land owners from cheaper imports.
Related pages
- Economic liberalism
- Anarcho-capitalism
- Free-market anarchism
- History of economic thought
- Libertarianism
- Market fundamentalism
- Neoliberalism
See also
In Spanish: Laissez faire para niños
