Laissez faire

The phrase "laissez faire, laissez passer" (pronounced /lɛse fɛʁ lɛse pass/) is a French expression meaning "let do, let go" referring to complete freedom in the economy: free market, free manufacturing, low or no taxes, free labor market and minimal government intervention. It was first used by Vincent de Gournay, a physiocrat of the 18th century, against government interventionism in the economy. In full, the sentence is: Laissez faire et laissez passer, le monde va de lui même, in Spanish: "Let it go and let it pass, the world goes by itself".

History

Adam Smith.

In the second half of the 18th century, in the heat of the English Industrial Revolution, Adam Smith played a very important role in the popularization of laissez-faire economic theories, being considered the father of free market theories or free trade. Although there were precursors of these theories, for example in medieval Persia such as Al Ghazali and Al Tusi. Adam Smith understood this term as the "non-intervention" of the State in economic life, mainly in the field of production. He also said that the State was a bad administrator (because it was not interested in a good administration, since it does not use its own funds). The main idea of these theories was the non-interference of states in economic affairs. According to Adam Smith, there was an invisible hand that guided the market economy by which the sum of the responsible egoisms would benefit all of society and the development of society. economy. State regulations, from this point of view, were undesirable.

The laissez-faire, a product of economic liberalism against the Old Regime, first appeared the French Physiocratic School, which was the one that left its maxim «laissez faire, laissez passer» (letting go, leaving pass). Later, Adam Smith in his work "The Wealth of Nations" imposed the view of non-intervention in the economy by the State as a new way of seeing economic activity. Adam Smith saw the economy from naturalism and the market as an organic part of that system. Smith saw laissez-faire as a moral program, and the market as its instrument to assure men of the rights of natural law. By extension, free markets become a reflection of the natural system of freedom. "For Smith, laissez-faire was a program for the abolition of laws that limit the market, a program for the restoration of order and for the activation of potential growth."^{[citation needed]}

In France of the 18th century the expression laissez faire was the formula by which the revolutionaries compressed their program. Its objective was the establishment of an unimpeded market economy. In an effort to achieve this end, they advocated the abolition of all laws that prevented more efficient people from outperforming less prepared competitors.

Today it is used as a synonym for a radical version of economic liberalism, but without the pro-market regulations promoted by liberals.

Basics

Being a system of thought, laissez-faire rests on the following axioms:

1. The individual is the basic unit in society.
2. The individual has a natural right to freedom.
3. The physical order of nature is a harmonious and self-regulating system.
4. Corporations are creatures of the state and therefore must be closely watched by the citizenry because of their propensity to interrupt Smith's spontaneous order.

These axioms constitute the basic elements of laissez-faire thought, although another basic and often neglected element is that markets must be competitive, a rule that the early defenders of laissez-faire faire have always emphasized. To maximize freedom and allow markets to regulate themselves, the early advocates of laissez-faire proposed a single tax, a tax on land rent to replace all welfare-damaging taxes penalizing the production.

Etymology and usage

The term laissez-faire probably originated in a meeting that took place around 1681 between the powerful French Comptroller General of Finance Jean-Baptiste Colbert and a group of French businessmen headed by M. Le gender. When the eager mercantilist minister asked how the French state could be of service to merchants and help promote their trade, Le Gendre replied simply: "Laissez-nous faire" ("Leave it to us" or "Let's do it"); the French verb that does not require an object.

The anecdote about the Colbert-Le Gendre meeting appeared in a 1751 article in the Journal économique written by the French minister and champion of free trade René de Voyer, Marquis d'Argenson, also the first known occurrence of the term in print. Argenson himself had used the phrase earlier (1736) in his own diaries in a famous outburst:

Laissez faire, telle devrait être la devise de toute puissance publique, depuis que le monde est civilisé [...]. Détestable principe que celui de ne vouloir grandir que par l'abaissement de nos voisins ! Il n'y a que la méchanceté et la malignité du cœur de satisfyites dans ce principe, et l'intérêt y est opposé. Laissez faire, morbleu ! Laissez-faire !
Soltar, which should be the motto of all public power, as the world was civilized[...] [It is] a detestable principle of those who want to magnify themselves, but by the degradation of our neighbors. There are only evil and evil hearts [who are] satisfied with this principle and [his] interest is opposed. Let him go, for God's sake!

Vincent de Gournay, a French physiocrat and commerce intendant in the 1750s, popularized the term laissez-faire when he supposedly adopted it from François Quesnay's writings on China. Quesnay coined the phrases laissez-faire and laissez-passer, laissez-faire being a translation of the Chinese term wu wei (無為). Gournay strongly supported the removal of trade restrictions and the deregulation of industry in France. Delighted with the Colbert-Le Gendre anecdote, he forged it into a broader maxim of his own: "Laissez faire et laissez passer"; ("Let do and let go"). His motto has also been identified as the longest "Laissez faire et laissez passer, le monde va de lui même!" ("Let go and let go, the world goes on alone!"). Although Gournay left no written treatises on his economic policy ideas, he had an immense personal influence on his contemporaries, particularly his fellow physiocrats, who ascribe both the slogan of laissez-faire as the doctrine to Gournay.

Before d'Argenson or Gournay, PS de Boisguilbert had enunciated the phrase "On laisse faire la nature" ("Let nature take its course"). D'Argenson himself during his lifetime was best known for the similar, but less celebrated motto, 'Pas trop gouverner'. ("Ruling not too much").

The physiocrats proclaimed laissez-faire in 18th century France, placing it in the very center of his economic principles and famous economists, beginning with Adam Smith, developed the idea. It is with the physiocrats and classical political economy that the term laissez-faire is ordinarily associated. The book Laissez Faire and the General Welfare State states: "The Physiocrats, reacting against the excessive mercantilist regulations of France at the time, expressed a belief in a 'natural order" #39; or freedom under which individuals, by pursuing their selfish interests, contributed to the general good. Since, in their view, this natural order functioned successfully without government help, they advised the state to confine itself to upholding the rights of private property and individual liberty, removing all artificial barriers to trade, and abolishing all useless laws. #3. 4;.

The French phrase laissez-faire gained popularity in English-speaking countries with the spread of Physiocratic literature at the turn of the century XVIII George Whatley's Principles of Commerce 1774 (co-authored with Benjamin Franklin) retold the Colbert-LeGendre anecdote; this may mark the first occurrence of the phrase in an English publication.

Herbert Spencer objected to a slightly different application of laissez-faire, to "that wretched laissez-faire " which leads to the ruin of men, saying: "Along with that laissez-faire wretch who calmly watches as men ruin themselves by trying to enforce their equitable claims, there is activity in providing them, at other men's expense, free novel reading!

As a product of the Enlightenment, laissez-faire was conceived "as the way to unlock human potential through the restoration of a natural system, one freed from the constraints of the government". In a similar vein, Adam Smith viewed the economy as a natural system and the market as an organic part of that system. Smith saw laissez-faire as a moral program and the market as his instrument to guarantee men the rights of natural law. By extension, free markets become a reflection of the natural system of freedom. For Smith, laissez-faire was "a program for the abolition of laws that restrict the market, a program for the restoration of order and for the activation of potential growth".

However, Smith and notable classical economists such as Thomas Malthus and David Ricardo did not use the phrase. Jeremy Bentham used the term, but it was probably James Mill's reference to the laissez-faire maxim (along with the motto "Pas trop gouverner") in an 1824 entry for the Encyclopædia Britannica which actually brought the term into wider use in English. With the advent of the Corn Law (founded in 1838), the term received much of its meaning in English.

Smith first used the metaphor of an invisible hand in his book Theory of Moral Sentiments (1759) to describe the unintended effects of economic self-organization based on economic self-interest. Although it is not the metaphor itself, the idea behind the invisible hand belongs to Bernard de Mandeville and his Fable of the Bees (1705). In political economy, that idea and the doctrine of laissez-faire have been closely related for a long time. Some have characterized the invisible hand metaphor as a laissez-faire metaphor, although Smith never used the term. In Third Millennium Capitalism (2000), Wyatt M. Rogers Jr. notes a trend in which recently 'conservative politicians and economists have chosen the term 'free market capitalism'; instead of laissez-faire".

American individualist anarchists such as Benjamin Tucker saw themselves as laissez-faire economic socialists and political individualists while arguing that their "anarchist socialism" or "individual anarchism" it was "consistent Manchesterism".