A laissez-faire policy is a political and economic doctrine which holds that economies function efficiently when there is minimal government interference. This policy opposes the taxation and regulation of commerce and advocates for individualism, free trade and free competition.
The doctrine of laissez-faire is associated with the infamous economists known as Physiocrats. These economists flourished in France between 1750s and 1780s. This policy became popular in Britain under the influence of Adam Smith, a renowned philosopher and economist. However, it was not enthusiastically accepted in the United States.
The belief in this policy became very popular in the 19th century, with its proponents advocating unregulated individual activity. John Stuart Mill, a British economist, was responsible for popularizing this policy through his arguments in Principles of Political Economy in 1848. During this era, it was widely perceived that an individual allowed to pursue his own desires would achieve the best results for society. The key function of the state was to provide security and maintain order, but the state should avoid interfering with the initiatives of an individual pursuing his desired goals. However, laissez-faire advocates insisted that the government had a crucial role in enforcing contracts.
Towards the end of the 19th century, acute economic changes were experienced, and they proved that the laissez-faire doctrine was no longer effective. New theories and concepts were developed to deal with the new challenges. However, this policy still has its advocates.