DOCTRINE OF LAISSEZ FAIRE

 

DOCTRINE OF LAISSEZ FAIRE

It is a French word which means “allow to do”.

The theory of laissez-faire was developed by the French Physiocrats during the 18th century 

It states that the less interference of government in the economy, the better off the business will be. An economic system where transactionare between private parties who are free from government intervention like regulations, tariffs, subsidies, privileges.

A doctrine opposing governmental interference in economic affairs beyond the minimum necessary for the maintenance of peace and property rights.

Advantages of laissez faire

  This gives business more space and autonomy from government.

   Companies are compelled to be more creative and advantage in technology.

 The absence of taxes leaves companies and employees alike with greater spending power.

Disadvantages of laissez faire

1.   The absolute autonomy creates situation of chaos between both producers and consumers.

  It fails to represent the interests of the entire society.