Laisez Faire

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Laissez Faire Economy

The laissez faire economy is an economy whereby market prices of goods and services are solely determined by the market forces. There is no, minimal, government intervention in the manner at which the prices are deliberated (colander & Landreth, 1994). The proponents of this form of economy, Adam Smith and John Stuart mill saw that if the private businesses were left to work and produce according to their capabilities then more investors would emerge. This would in turn boost economic growth because competition among the private enterprises would encourage innovation needed for a faster and more stable economic growth of a nation. Smith went ahead to show that a rational consumer is one that wants more for himself and less for others. Some American nationalists were in favor of government control of businesses in order to protect infant industries from in the private sector it is virtually close to impossible to do that now as the private companies are the real runners of the economy.

On 6 November 2011, Adam Davidson wrote “can anyone really create jobs” [ (Davidson) ]. In his view politicians have no resources or the abilities to create jobs for the American population. He explains that companies can only hire if there is high demand for their products with less production capabilities of the available labor force. He goes further and states even the subsidies or tax breaks that the government offers cannot change the current unemployment rates. On 7 November 2011, the editor of the opinion pages made an observation that the job market is not robust enough to cover for the current 13.9 million unemployed people. This is a situation where markets are not able to sustain themselves, causing a dilemma of whether the government should intervene and if so to what extent should it do so.

Low spending power of the consumers due high rates of unemployment has brought the American economy to its...