Laissez-Faire Economics

One of the most precarious relationships in the United States (and many countries) is the relationship between governments, local, state, or federal, and the economy. Some countries advocate a hands-on approach by the government when it comes to the economy while others prefer that the government not interfere with the economy.

Depending on the era, the United States has been both involved and not so uninvolved in the nation's economy. It has pretty much depended on the current mind set of the nation and whether the people were for or against government involvement in things that directly affected their day to day lives. One such train of thought was called laissez-faire economics. By definition, laissez-faire, is French for "let do." In regards to the economy, the term refers to a business environment in which transactions between two private entities can be conducted without interference of any kind from the government in anyway, but especially in the form of taxes, tariffs, and regulation.

The term "laissez faire" originated in 1680 when Jean-Baptiste Colbert, the French finance minister, met with a group or businessmen. He was interested in helping them and asked what he could do. They responded with "laissez-nous faire" or simply "leave us be."

While there have been times throughout history where the United States promoted a laissez-faire attitude towards the economy, it is not one that has been fully embraced or practiced. For much of the 19th century the nation followed what was known as the `American School' of thought which called for a certain degree of government intervention, but not so much government control.

The use of government regulation, be it in the form of tariffs protecting U.S. business interest from those of another country, a national bank, and/or anti-trust laws, has always been prevalent in American society. The New Deal and the bailouts of many banking institutions in more recent years are prime examples of the opposite of laissez-faire economics.