Laissez-Faire, according to Merriam-Webster is defined as “a doctrine opposing governmental interference in economic affairs beyond the minimum necessary for the maintenance of peace and property rights.” Adam Smith strongly believed in this ideology, and often applied it to the economy, in turn creating “Laissez-Faire Capitalism.” This can be defined as a practically lawless economy that is categorically null of any government interference. People who advocate for this type of economy often state that it is the epitome of free trade, but that is simply not the case. Now, people often cite the proverb “Without law and order, mankind has no freedom” as a paradox. I believe that when this term is applied to the economy, it is no longer a paradox, but simply a fact.
Picture this, you’re an aspiring peach farmer that owns one acre of land to farm on. A much larger business owns an entire 1000 acres. Once the larger business realizes that you have joined the competition, it lowers its peach prices to one dollar per dozen. Since that larger business has an abundance of land to farm peaches on, they are still making enough to sustain themselves. But because you only have an acre, going any lower than one dollar per dozen is simply unsustainable, and soon you go out of business. Once you’re out of the picture, the larger business raises its price very high, since it has no competition and thus, it’s the only possible place for people to purchase peaches. What I've just described is an example of a monopoly, An unregulated economy always results in a monopoly, and it takes away economic freedoms from smaller businesses.
In the news, you will likely eventually hear something along the lines of “when the parties switched.” This is talking about how at some point during the late 1800s and early 1900s, the ideals of the Democratic Party became the ideals of the Republican Party, and vise versa. In this case, the Democratic Party switched from advocating for the lowest possible amount of government interference in the economy, to recognizing the necessity for the government to set certain limits, However, the Democratic Party never stopped working towards the same goal; preventing oppression in the economy at all costs, It’s simply that different methods of doing so were used at different points in American history. The Democratic Party originally wished to expunge the government’s role in the economy in order to allow the most economic freedom to take place without being restricted. Eventually, it became apparent that without the government’s interference, people were being oppressed once again by monopolies, instead of by the government.
All in all, Laissez-Faire capitalism was originally created in order to bring the most possible liberty to the economy, but it unfortunately led to the opposite effect; people were oppressed and given no possible chance to rise economically. However, it’s incredibly important to remember that the same scenario can happen when the government sets too many economic limits, which is why as a society, we also have to be mindful of which way the wind is blowing at different periods of time.