Laissez-faire

Laissez-faire (ɛər/; French: [lɛsefɛʁ] (About this soundlisten); from French: laissez faire, lit. 'let do') is an economic system in which transactions between private parties are free from government intervention such as regulation, privileges, tariffs and subsidies. The phrase laissez-faire is part of a larger French phrase and translates to "let (it/them) do", but in this context usually means "let go".[1]

Etymology and usage

The term laissez faire likely originated in a meeting that took place around 1681 between powerful French Controller-General of Finances Jean-Baptiste Colbert and a group of French businessmen headed by M. Le Gendre. When the eager mercantilist minister asked how the French state could be of service to the merchants and help promote their commerce, Le Gendre replied simply "laissez-nous faire" ("leave it to us" or "let us do [it]", the French verb not having to take an object).[2]

The anecdote on the Colbert–Le Gendre meeting appeared in a 1751 article in the Journal économique, written by French minister and champion of free trade René de Voyer, Marquis d'Argenson—also the first known appearance of the term in print.[3] Argenson himself had used the phrase earlier (1736) in his own diaries in a famous outburst:

Laissez faire, telle devrait être la devise de toute puissance publique, depuis que le monde est civilisé ... Détestable principe que celui de ne vouloir grandir que par l'abaissement de nos voisins ! Il n'y a que la méchanceté et la malignité du cœur de satisfaites dans ce principe, et l’intérêt y est opposé. Laissez faire, morbleu ! Laissez faire !![4] "Let go, which should be the motto of all public power, since the world was civilized ... (It is) a detestable principle of those that want to enlarge (themselves) but by the abasement of our neighbours. There is but the wicked and the malignant heart(s) (who are) satisfied by this principle and (its) interest is opposed. Let go, alas".[5]

— René Louis de Voyer de Paulmy d'Argenson

Vincent de Gournay, a French Physiocrat and intendant of commerce in the 1750s, popularized the term laissez faire as he allegedly adopted it from François Quesnay's writings on China.[6] Quesnay coined the phrases laissez-faire and laissez-passer,[7] laissez-faire being a translation of the Chinese term 無為 wu wei.[8] Gournay ardently supported the removal of restrictions on trade and the deregulation of industry in France. Delighted with the Colbert-Le Gendre anecdote,[9] he forged it into a larger maxim all his own: "Laissez faire et laissez passer" ("Let do and let pass"). His motto has also been identified as the longer "Laissez faire et laissez passer, le monde va de lui même!" ("Let do and let pass, the world goes on by itself!"). Although Gournay left no written tracts on his economic policy ideas, he had immense personal influence on his contemporaries, notably his fellow Physiocrats, who credit both the laissez-faire slogan and the doctrine to Gournay.[10]

Before d'Argenson or Gournay, P. S. de Boisguilbert had enunciated the phrase "on laisse faire la nature" ("let nature run its course").[11] D'Argenson himself during his life was better known for the similar, but less-celebrated motto "Pas trop gouverner" ("Govern not too much").[12] However, Gournay's use of the laissez-faire phrase (as popularized by the Physiocrats) gave it its cachet.[citation needed]

The Physiocrats proclaimed laissez-faire in eighteenth-century France, placing it at the very core of their economic principles and famous economists, beginning with Adam Smith, developed the idea.[13] "It is with the physiocrats and the classical political economy that the term "laissez faire" is ordinarily associated".[14] The book Laissez Faire and the General-Welfare State states:

The physiocrats, reacting against the excessive mercantilist regulations of the France of their day, expressed a belief in a "natural order" or liberty under which individuals in following their selfish interests contributed to the general good. Since, in their view, this natural order functioned successfully without the aid of government, they advised the state to restrict itself to upholding the rights of private property and individual liberty, to removing all artificial barriers to trade, and to abolishing all useless laws.[13]

In England, a number of "free trade" and "non-interference" slogans[which?] had been coined[by whom?] as early as the 17th century,[citation needed] but the French phrase laissez-faire gained currency in English-speaking countries with the spread of Physiocratic literature in the late 18th century. George Whatley's 1774 Principles of Trade (co-authored with Benjamin Franklin) re-told the Colbert-LeGendre anecdote—this may mark the first appearance of the phrase in an English-language publication.[15]

Herbert Spencer was opposed to a slightly different application of laissez faire—to "that miserable laissez-faire" that leads to men’s ruin:

Along with that miserable laissez-faire which calmly looks on while men ruin themselves in trying to enforce by law their equitable claims, there goes activity in supplying them, at other men's cost, with gratis novel-reading![16]

In Spencer's case, the right of private ownership was being assailed and it was that miserable spirit of laissez-faire in halls of legislation that exhausted men in the effort of protecting their right. So in effect, Spencer decried laissez-faire socialism.

Laissez-faire, a product of the Enlightenment, was "conceived as the way to unleash human potential through the restoration of a natural system, a system unhindered by the restrictions of government".[17] In a similar vein, Adam Smith[when?] viewed the economy as a natural system and the market as an organic part of that system. Smith saw laissez-faire as a moral program and the market its instrument to ensure men the rights of natural law.[17] By extension, free markets become a reflection of the natural system of liberty.[17] For Smith, laissez-faire was "a program for the abolition of laws constraining the market, a program for the restoration of order and for the activation of potential growth".[17]

However, Smith[18] and the notable classical economists, such as Thomas Malthus and David Ricardo, did not use the phrase. Jeremy Bentham used the term, but it was probably[original research?] James Mill's reference to the laissez-faire maxim (together with "pas trop gouverner") in an 1824 entry for the Encyclopædia Britannica that really brought the term into wider English usage. With the advent of the Anti-Corn Law League (founded 1838), the term received much of its English meaning.[19][need quotation to verify]

Smith first used the metaphor of an "invisible hand" in his book The Theory of Moral Sentiments (1759) to describe the unintentional effects of economic self-organization from economic self-interest.[20] The idea lying behind the "invisible hand", though not the metaphor itself, belongs to Bernard de Mandeville and his Fable of the Bees (1705). In political economy, that idea and the doctrine of laissez-faire have long been[by whom?] closely related.[21] Some have characterized the invisible-hand metaphor as one for laissez-faire,[22] though Smith never actually used the term himself.[18]

In Third Millennium Capitalism (2000), Wyatt M. Rogers, Jr. notes a trend whereby recently "conservative politicians and economists have chosen the term 'free-market capitalism' in lieu of laissez-faire".[23]

Other Languages
አማርኛ: ለሴ ፈር
azərbaycanca: Laissez-faire
Bân-lâm-gú: Chū-iû hòng-jīm
भोजपुरी: लेसे-फेयर
български: Лесе-фер
català: Laissez faire
čeština: Laissez faire
Cymraeg: Laissez-faire
Deutsch: Laissez-faire
Ελληνικά: Laissez-faire
español: Laissez faire
euskara: Laissez faire
فارسی: لسه فر
français: Laissez-faire
한국어: 자유 방임
հայերեն: Laissez-faire
हिन्दी: अबन्धता
hrvatski: Laissez faire
Bahasa Indonesia: Laissez-faire
italiano: Laissez-faire
עברית: לסה פר
lumbaart: Lassee fà
Bahasa Melayu: Laissez-faire
မြန်မာဘာသာ: Laissez-faire
Nederlands: Laisser-faire
occitan: Laissez faire
polski: Leseferyzm
português: Laissez-faire
română: Laissez-faire
русский: Laissez-faire
саха тыла: Laissez-faire
Simple English: Laissez-faire
slovenčina: Laissez-faire
српски / srpski: Лесе фер
srpskohrvatski / српскохрватски: Laissez faire
svenska: Laissez faire
Tagalog: Laissez-faire
Türkçe: Laissez faire
українська: Laissez-faire
Tiếng Việt: Laissez-faire
Winaray: Laissez-faire
中文: 自由放任