What Are The Concepts Upon Which Laissez Faire Is Based Essay

What Are The Concepts Upon Which Laissez Faire Is Based - Essay Example Established in the 18th century, the concept of laissez-faire was used in order to oppose any government intervention in business affairs. Vincent De Gournay further popularized the phrase as he was completely in favor of the removal of restrictions on trade and industry in the country as well as deregulation of industry; he gave rise to the phrase â€Å"laissez faire et laissez passer† referring to the commercial workers; it can be translated as â€Å"let do and let pass†. The French phrase even found place in England later in the 18th century with respect to protests for bringing about free trade and non-interference or non-intervention by the government. Later, James Mill and Jeremy Bentham were users of the term, bringing about a wider range of understandings among economists and students alike. It must be understood that the concept of laissez-faire applies not only to economics but also to lifestyle. People desired to lead their lives without governmental interven tion or social regulations, which led to restrictions in many situations. The policy thus applies to individual and governmental or industrial affairs and proposes capitalism, entrepreneurship, and competition among producers to satisfy consumer preferences in order to achieve maximum possible freedom. In Western Europe during the 18th century it was believed that the natural economic order brought maximum wellbeing for the majority of citizens when it was untouched by regulations or adjustments. At the time, there were pioneer economists in France who were known as the Physiocrats, and they led to the primary development of the theory of laissez-faire, which emphasized on non-interference with commercial ventures in order to protect the interests of those yearning to set up their own empires. â€Å"The most important and influential proponent of laissez-faire capitalism, however, was the 18th-century Scottish economist Adam Smith, who believed that individual welfare was more impo rtant than national power. In his book The Wealth of Nations (1776), he advocated a policy of free trade so that the â€Å"invisible hand† of competition could act as an economic regulator. Smith's advocacy of private enterprise as the best stimulus to equitable distribution of wealth gained increasing support in the early 19th century, partly because of the wave of libertarian revolution sweeping Europe and the U.S. His theories were further developed by the British economists David Ricardo and John Stuart Mill.† (â€Å"Laissez-faire versus Government  Intervention†) Laissez-faire could be understood as being equivalent of a free market concept, where the government has little or no say in the matters of private owners. Such a market allows private ownership to flourish and leaves room for creativity. In countries where the concept is not followed, the government tends to regulate market affairs by either subsidizing local industries or imposing certain tariff s and restrictions on carrying out free trade. This is done mainly for the demand and the supply level to reach a particular point at which they are equivalent so as to meet the needs of individuals. The concept of laissez-faire thus may not be carried out in countries where the government is required in order to keep in check the needs of the consumers, for example in underdeveloped or certain developing nations around the world (Cunningham 213-214). In countries like China, for example, monopoly has been held by the government in terms of trade and commerce since the Song and Ming dynasties even though some control has been given to private owners. In