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Laissez-Faire Economics

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Laissez-faire economics, advocating minimal government intervention, has shaped US policy from the Gilded Age to the Progressive Era reforms. It saw a resurgence in the 1920s but faced challenges during economic crises, reflecting a dynamic interplay between free-market principles and regulatory shifts.

Understanding Laissez-Faire Economics

Laissez-faire economics is a principle that advocates for minimal government intervention in the marketplace. Originating from the French term meaning "allow to do," this economic philosophy suggests that the natural order of free markets leads to efficiency and prosperity. Proponents argue that government policies such as trade tariffs, corporate taxes, and minimum wage laws can disrupt the self-regulating nature of the economy. They believe that lower taxes on corporations incentivize production and innovation, thereby fostering a more dynamic economic environment.
Bustling 19th-century marketplace scene with a fruit and vegetable vendor interacting with a customer, surrounded by various stalls and shoppers in period attire.

The Roots and Rise of Laissez-Faire Ideology

The concept of laissez-faire emerged in France during the Enlightenment and was later popularized by influential economists like Adam Smith and John Stuart Mill. Smith's seminal work, "The Wealth of Nations," argued that individual self-interest in a free-market economy often leads to the greater good, a concept known as the "invisible hand." Mill's "Principles of Political Economy" further advanced the idea of limited government intervention. In the United States, these ideas took hold in the 19th century, fostering a climate of economic liberalism and individualism.

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00

______ economics promotes minimal ______ interference in the market, stemming from a French phrase meaning 'allow to do'.

Laissez-faire

government

01

Advocates of ______-______ economics claim that free markets naturally lead to ______ and ______.

laissez-faire

efficiency

prosperity

02

Origin of laissez-faire concept

Emerged in France during Enlightenment.

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