laissez-faire

Laissez-faire refers to an economic philosophy that advocates for minimal government interference in the economy.

The phrase “laissez-faire” originates with the French physiocratic economists, who were early proponents of a free market economy. The phrase translates literally to “ let them do it ”, but the figurative meaning is somewhat closer to “ leave them to do it .” It has since been used to describe the views of many free market economists, such as Adam Smith, Friedrich Hayek, and Milton Friedman. Laissez-faire economists advocate policies such as:

The term “laissez faire” has also come to be used to describe an authority figure taking a hands-off approach to their duties, but this is neither the original nor usual sense of the phrase. In this usage, a lax parent may be described as “laissez-faire”, or a judge may take a “laissez faire” approach to appellate review . Unlike the use of the term to describe economic policy, in this context the term “laissez-faire” is almost invariably a negative label. It is used to insinuate that the authority figure has failed to perform their duties with appropriate care.

During the Lochner Era , the Supreme Court of the United States is said to have forced a laissez-faire economy onto the United States. By limiting the power of the government to restrict a baker’s work hours, the Supreme Court endorsed a much stronger interpretation of the freedom of contract, a hallmark of laissez-faire economics. However, this interpretation was short-lived, ending with the Supreme Court’s acceptance of President Roosevelt’s New Deal policies .

There is a fear among some political commentators that the Supreme Court will return to the laissez-faire economics of the Lochner Era, however this has not yet come to pass. Today laissez-faire policies are driven by politicians in the legislative and executive branches, not the judicial branch.

[Last reviewed in June of 2023 by the Wex Definitions Team ]

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