Laissez-faire is an economic and political philosophy. It is from a French phrase that means to "leave alone". It means that government does not interfere with business and economy. Finance and trade decisions are left for the private individual to make. It is the belief that unregulated competition in business represents the best path to progress. Supporters claim that a free and unregulated market creates a natural balance between supply and demand. The phrase is supposed to have come from the 18th century. In a meeting between the French finance minister Colbert and a businessman named Le Gendre, Colbert asked how the government could help commerce. Le Gendre replied "Let us do what we want to do".
In Ancient China, there were three schools of political thought. Taoism believed in almost no economic interference by the government. Legalism included the belief that the state should have the maximum power. They created the traditional Chinese bureaucratic empire. Confucianism was split between these two extremes although was closer to Legalism than Taoism.
During the 19th century Laissez faire developed as a social and economic philosophy. It was believed that government involvement in business was harmful at worst and ineffective at best. Socially, it was believed that government intervention to help the poor was harmful because it made them lazy and dependent on the government. Economically there was debate at this time in Europe and the United States over whether free trade or tariffs promoted the most economic growth. Up until the 1840s protectionism was favored over Laissez faire. In Britain the Corn Laws placed high tariffs on imported corn to protect British farmers and land owners.
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- Michael Scaife, History: Modern British and European (London: Letts Educational, 2004), p. 32