Laissez Faire

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WRITE UP ON
“Is laissez-faire economic policy a relic of the past? Is constant intervention by governments and fiscal stimulus a necessity now?

WRITE UP ON
“Is laissez-faire economic policy a relic of the past? Is constant intervention by governments and fiscal stimulus a necessity now?

SHREYA KHASTAGIR
SCMHRD, Pune
SHREYA KHASTAGIR
SCMHRD, Pune

"It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest," - Adam Smith. This idea reflects the concept that each person when works for his/her own benefit inadvertently helps to create benefit for all. This can only be done by creating an environment for free trade and free from any government intervention which can promote individuals and firms to maximize their returns by efficient utilization of resources. This concept of laissez-faire, "leave it alone”, came into prominence with the advent of political and economic liberalism in Europe. As long as markets are free and competitive, the actions of private individuals, motivated by self-interest, would work together for the greater good of society. For past two centuries, two economic principles and policies have dominated the political debate, one being social democracy, which favours government intervention, and the other being liberalism, favouring laissez-faire. In general, liberals hold laissez-faire to be the key to economic growth, prosperity, and rising standards of living. Conservatives, on the other hand, favour regulation as a necessary means to achieve social justice, and to protect the weak from being quashed by the strong. In the modern world today, some forms of government intervention are required even in laissez-faire to establish the ground rules for free enterprise. The role of government in today’s world cannot be eliminated even in countries which may seem to follow the policy of Laissez-faire but the extents to which these government...
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