Laissez-faire is a French phrase that means “let it be.” As it pertains to political or economic systems, laissez-faire is a doctrine of non-interference. Most often, it refers to a hands-off or limited approach by a government in economic matters. This type of government would have few or no economic restrictions on trade or transactions, minimal or no taxes and tariffs and few restrictions on businesses. The term also might refer to the governing philosophy of a leader or government in matters other than economics.
Less Regulation and Control
A laissez-faire approach to economics means less government regulation and fewer artificial controls of production, buying, selling, trading and financing. It clearly promotes the free market. Limited government intrusion is the foundation of such a system, although the concept is less absolute than it once was.
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People who believe in absolute laissez-faire economics, or no government regulation, are sometimes referred to as economic anarchists. They believe in no controls at all. “The market will work it out” is their motto.
Although there is some truth to that sentiment, most people who subscribe to the laissez-faire model of economics believe that some controls or regulations are required, if for no other reason than to prevent monopolies, corruption and other abuses. Allowing limited government regulation became more accepted by proponents of this type of policy in the 19th and 20th centuries after some corporations became too large to compete with, absorbed their competitors and attempted to control supply and demand through production as well as through price controls.
The laissez-faire model of economics is embraced by a wide variety of people across the political spectrum. It is rejected, however, by many people who believe that more government regulation is beneficial, even if they see regulation as a necessary evil. Those who reject it often approve of some form of wealth redistribution, whether in the form of public assistance or corporate welfare. Laissez-faire economics is generally considered a libertarian ideal.
As a Leadership Philosophy
Along with being an approach to economics, laissez-faire can be a philosophy of leadership. Many people, however, do not feel that a laissez-faire leader is a leader at all. Some people need a leader to exert authority and control. Others find that leaders who allow people to act under the dictates of their conscience and use their own judgment are better received and more respected.