Editing Laissez-faire (section)

== History ==
=== Europe ===
{{main|Economic liberalism}}
{{see also|Classical liberalism}}
In Europe, the ''laissez-faire'' movement was first widely promoted by the [[Physiocracy|Physiocrats]], a movement that included [[Vincent de Gournay]] (1712–1759), a successful merchant turned political figure. Gournay is postulated to have adapted the Taoist concept ''[[wu wei]]'',<ref>[[Christian Gerlach]], [http://hsozkult.geschichte.hu-berlin.de/daten/2005/gerlach_christian_wu-wei.pdf Wu-Wei in Europe. A Study of Eurasian Economic Thought] {{Webarchive|url=https://web.archive.org/web/20200803052148/http://hsozkult.geschichte.hu-berlin.de/daten/2005/gerlach_christian_wu-wei.pdf |date=2020-08-03 }}, London School of Economics – March 2005 p. 3" the diffusion of ''wu-wei'', co-evolved with the inner-European ''laissez-faire'' principle, the Libaniusian model." p. 8 "Thus, ''wu-wei'' has to be recognized as a ''laissez-faire'' instrument of Chinese political economy "p. 10 "Practising ''wu-wei erzhi''. Consequently, it is this variant of the ''laissez-faire'' maxim in which the basis of Physiocracy's 'moral philosophy' is to be located. Priddat's work made clear that the ''wu-wei'' of the complete ''économie'' has to be considered central to Physiocracy; "p. 11 "that ''wu-wei'' translates into French as ''laissez-faire''".</ref> from the writings on China by [[François Quesnay]]<ref name=Clarke/> (1694–1774). Gournay held that government should allow the [[Natural law|laws of nature]] to govern economic activity, with the state only intervening to protect life, liberty and property. [[François Quesnay]] and [[Anne Robert Jacques Turgot]], Baron de l'Aulne took up Gournay's ideas. Quesnay had the ear of the King of France, [[Louis XV of France|Louis XV]] and in 1754 persuaded him to give ''laissez-faire'' a try. On September 17, the King abolished all tolls and restraints on the sale and transport of grain. For more than a decade, the experiment appeared successful, but 1768 saw a poor harvest, and the cost of bread rose so high that there was widespread starvation while merchants exported grain to obtain the best profit. In 1770, the [[List of Finance Ministers of France|Comptroller-General of Finances]] [[Joseph Marie Terray]] revoked the edict allowing free trade in grain.<ref>Will & Ariel Durant, ''Rousseau and the Revolution'', pp. 71–77, Simon and Schuster, 1967, {{ISBN|0-671-63058-X}}.</ref>

The doctrine of ''laissez-faire'' became an integral part of [[Classical liberalism|19th-century European liberalism]].<ref name="Fine, Sidney 1964"/> Just as liberals supported [[freedom of thought]] in the intellectual sphere, so were they equally prepared to champion the principles of [[free trade]] and [[free competition]] in the sphere of economics, seeing the state as merely a [[Night-watchman state|passive policeman]], protecting [[private property]] and administering justice, but not interfering with the affairs of its citizens. Businessmen, British industrialists in particular, were quick to associate these principles with their own economic interests.<ref name="Fine, Sidney 1964"/> Many of the ideas of the physiocrats spread throughout Europe and were adopted to a greater or lesser extent in Sweden, Tuscany, Spain and in the newly created United States. [[Adam Smith]], author of ''[[The Wealth of Nations]]'' (1776), met Quesnay and acknowledged his influence.<ref>Will & Ariel Durant, ''Rousseau and the Revolution'', p. 76, Simon and Schuster, 1967, {{ISBN|0-671-63058-X}}.</ref>

In Britain, the newspaper ''[[The Economist]]'' (founded in 1843) became an influential voice for ''laissez-faire'' [[capitalism]].<ref>{{cite journal|author=Scott Gordon|title=The London Economist and the High Tide of Laissez Faire|year=1955|journal=Journal of Political Economy|volume=63|issue=6|pages=461–488|doi=10.1086/257722|s2cid=154921783}}</ref> ''Laissez-faire'' advocates opposed food aid for famines occurring within the [[British Empire]]. In 1847, referring to the famine then underway in Ireland, founder of ''The Economist'' [[James Wilson (businessman)|James Wilson]] wrote: "It is no man's business to provide for another".<ref>{{cite book|author=Cormac Ó Gráda|title=The Great Irish Famine|year=1995|chapter=section: ''Ideology and relief'' in Chpt. 2|isbn=978-0-521-55787-0|publisher=[[Cambridge University Press]]|author-link=Cormac Ó Gráda}}</ref> More specifically, in [[An Essay on the Principle of Population]], [[Malthus]] argued that there was nothing that could be done to avoid famines because he felt he had mathematically proven that population growth tends to exceed growth in food production. However, ''The Economist'' campaigned against the [[Corn Laws]] that protected landlords in the [[United Kingdom of Great Britain and Ireland]] against competition from less expensive foreign imports of cereal products. The [[Great Famine (Ireland)|Great Famine]] in Ireland in 1845 led to the repeal of the Corn Laws in 1846. The tariffs on grain which kept the price of bread artificially high were repealed.<ref>George Miller. ''On Fairness and Efficiency''. The Policy Press, 2000. {{ISBN|978-1-86134-221-8}} p. 344</ref> However, repeal of the Corn Laws came too late to stop the Irish famine, partly because it was done in stages over three years.<ref>Christine Kinealy. ''A Death-Dealing Famine:The Great Hunger in Ireland''. Pluto Press, 1997. {{ISBN|978-0-7453-1074-9}}. p. 59.</ref>

A group that became known as the [[Manchester capitalism|Manchester Liberals]], to which [[Richard Cobden]] (1804–1865) and [[John Bright]] (1811–1889) belonged, were staunch defenders of free trade. After the death of Cobden, the [[Cobden Club]] (founded in 1866) continued their work.<ref>{{cite web|title=London Clubs in the Late Nineteenth Century|url=http://www.nuff.ox.ac.uk/economics/history/paper28/28taddeiweb1.pdf|author=Antonia Taddei|year=1999|access-date=30 December 2008|archive-date=17 December 2008|archive-url=https://web.archive.org/web/20081217115036/http://www.nuff.ox.ac.uk/economics/history/paper28/28taddeiweb1.pdf|url-status=live}}</ref> The breakdown of ''laissez-faire'' as practised by the British Empire was partly led by British companies eager for state support of their positions abroad, in particular British oil companies.<ref>{{cite journal|last=Jones|first=G. Gareth|year=1977|title=The British Government and the Oil Companies 1912–1924: The Search for an Oil Policy|journal=[[The Historical Journal]]|volume=2 |issue=3|pages=647–672|jstor=2638433|doi=10.1017/s0018246x00011286|s2cid=161977401 }}</ref>

{{Anchor|Liberismo}}
In Italy, philosopher [[Benedetto Croce]] created the term "liberism" (derived from the Italian term ''liberismo''), a term for the [[economic doctrine]] of ''laissez-faire'' [[capitalism]]; it is synonymous with [[economic liberalism]]. He claimed that "Liberalism can prove only a temporary right of private propriety of land and industries."<ref>(Croce-Einaudi, 1988, p. 139)</ref> It was popularized in English by Italian political scientist [[Giovanni Sartori]].<ref>Giovanni Sartori. ''The Theory of Democracy Revisited'' (1987). [[Chatham, New Jersey]]. Chatham House. {{ISBN|0-934540-49-7}}.</ref> Sartori specifically imported the term from Italian to distinguish between [[social liberalism]], which is generally considered a [[political ideology]] often advocating extensive government intervention in the economy, and those [[economic liberal]] theories that propose to virtually eliminate such intervention. In informal usage, liberism overlaps with other concepts such as [[free trade]], [[neoliberalism]], [[right-libertarianism]], the American concept of [[Libertarianism in the United States|libertarianism]],<ref name=":2" /> and the ''laissez-faire'' doctrine of the French liberal [[Doctrinaires]]. The intention of Croce and of Sartori to attack the right to private property and to free enterprise separating them from the general philosophy of liberalism, that is primarily a theory of natural rights, was always criticised openly by the quoted philosophers and by some of the main representatives of liberalism, such as [[Luigi Einaudi]], [[Friedrich Hayek]],<ref name=":2">{{cite news|author=Pietro Moroni|url=https://www.pandorarivista.it/articoli/le-due-facce-della-medaglia-neoliberale/|title=Le due facce della medaglia neoliberale – Pandora Rivista|work=Pandora Rivista|date=25 April 2015|access-date=22 October 2018|archive-date=22 June 2018|archive-url=https://web.archive.org/web/20180622032453/https://www.pandorarivista.it/articoli/le-due-facce-della-medaglia-neoliberale/|url-status=live}}</ref><ref>{{Treccani|croce-ed-einaudi-un-confronto-su-liberalismo-e-liberismo_(Croce-e-Gentile)/|Croce ed Einaudi: un confronto su liberalismo e liberismo|accesso=22 ottobre 2018|autore=Marcello Montanari|anno=2016}}</ref><ref>{{cite book |title=Liberalismo politico e liberalismo economico|author=Dario Antiseri|publisher=Rubettino}}</ref> and [[Milton Friedman]].<ref>{{cite book |title=Liberalismo|author=F.Hayek|publisher=Ideazione|page=62|year=1997|quote=Ciò comporta anche il rifiuto della distinzione tra liberalismo politico e liberalismo economico /elaborata in particolare da Croce come distinzione tra liberismo e liberalismo) Per la tradizione inglese, i due concetti sono inseparabili. Infatti, il principio fondamentale per cui l'intervento coercitivo dell'autorità statale deve limitarsi ad imporre il rispetto delle norme generali di mera condotta priva il governo del potere di dirigere e controllare le attività economiche degli individui.}}</ref> The [[Austrian School]] economist [[Eugen von Böhm-Bawerk]] argues that the differences between the economical concept of liberism<ref>I sostenitori dell'esistenza di una dottrina liberista la attribuiscono ad [[Adam Smith]] e al suo saggio ''La Ricchezza delle Nazioni'', laddove questi utilizzò il termine "liberal policy" un paio di volte per indicare il commercio privo di dazi. Smith non vedeva di buon occhio l'assenza di regolamentazione statale, infatti dichiarò: «''Raramente la gente dello stesso mestiere si ritrova insieme, anche se per motivi di svago e di divertimento, senza che la conversazione risulti in una cospirazione contro i profani o in un qualche espediente per far alzare i prezzi''»''.''</ref> and the economical consequences of liberalism<ref>La lingua francese parla di ''libéralisme politique'' e ''libéralisme économique'' (quest'ultimo chiamato anche ''laissez-faire'', lett. ''lasciate fare''), lo spagnolo di ''liberalismo social'' e ''liberalismo económico''. La lingua inglese parla di ''free trade'' (libero commercio) ma usa il termine ''liberalism'' anche per riferirsi al liberismo economico.</ref><ref>{{Cite web|url=http://www.fondazioneluigieinaudi.it/Download/lezione_Scognamiglio_2011.pdf|title=Liberismo e liberalismo nella polemica fra Croce ed Einaudi|first=Scogniamiglio Pasini|last=Carlo|access-date=22 October 2018|archive-url=https://web.archive.org/web/20161228124608/http://www.fondazioneluigieinaudi.it/Download/lezione_Scognamiglio_2011.pdf|archive-date=28 December 2016}}</ref> can be summarized by saying that "A market is a law system. Without it, the only possible economy is the street robbery."<ref>{{cite book |title=Potere o legge economica?|last=Boehm-Bawerk|publisher=Rubbettino|page=67|year=1999}}</ref> 

=== United States ===
{{main|Liberalism in the United States}}
{{Liberalism US}}
Frank Bourgin's study of the [[Constitutional Convention (United States)|Constitutional Convention]] and subsequent decades argues that direct government involvement in the economy was intended by the [[Founding Fathers of the United States|Founding Fathers]].<ref name=bourgin>{{cite book|first=Frank|last=Bourgin|title=The Great Challenge: The Myth of Laissez-Faire in the Early Republic|isbn=978-0-06-097296-7|year=1989|publisher=George Braziller Inc.|location=New York}}{{page needed|date=March 2022}}</ref> The reason for this was the economic and financial chaos the nation suffered under the [[Articles of Confederation]]. The goal was to ensure that dearly-won political independence was not lost by being economically and financially dependent on the powers and princes of Europe. The creation of a strong central government able to promote science, invention, industry and commerce was seen as an essential means of [[Taxing and Spending Clause|promoting the general welfare]] and making the [[economy of the United States]] strong enough for them to determine their own destiny. Others view Bourgin's study, written in the 1940s and not published until 1989, as an over-interpretation of the evidence, intended originally to defend the [[New Deal]] and later to counter [[Ronald Reagan]]'s economic policies.<ref>{{cite web|last=Bourgin|first=Frank|url=https://www.kirkusreviews.com/book-reviews/frank-bourgin/the-great-challenge-the-myth-of-laissez-faire-i/|title=The Great Challenge: The Myth of Laissez-faire in the Early Republic|publisher=Kirkusreviews.com|date=1 June 1989|access-date=30 July 2013|archive-date=21 September 2013|archive-url=https://web.archive.org/web/20130921055716/https://www.kirkusreviews.com/book-reviews/frank-bourgin/the-great-challenge-the-myth-of-laissez-faire-i/|url-status=live}}</ref>

Historian Kathleen G. Donohue argues that in the 19th century [[liberalism in the United States]] had distinctive characteristics and that "at the center of classical liberal theory [in Europe] was the idea of ''laissez-faire''. To the vast majority of American classical liberals, however, ''laissez-faire'' did not mean "no government intervention" at all. On the contrary, they were more than willing to see government provide tariffs, railroad subsidies, and internal improvements, all of which benefited producers". Notable examples of government intervention in the period prior to the [[American Civil War]] include the establishment of the [[United States Patent and Trademark Office|Patent Office]] in 1802; the establishment of the Office of Standard Weights and Measures in 1830; the creation of the Survey of the Coast (later renamed the United States Coast Survey and then the [[United States Coast and Geodetic Survey]]) in 1807 and other measures to improve river and harbor navigation; the various [[United States Army|Army]] expeditions to the west, beginning with [[Lewis and Clark Expedition|Lewis and Clark]]'s [[Corps of Discovery]] in 1804 and continuing into the 1870s, almost always under the direction of an officer from the Army [[Corps of Topographical Engineers]] and which provided crucial information for the overland pioneers that followed; the assignment of Army Engineer officers to assist or direct the surveying and construction of the early railroads and canals; and the establishment of the [[First Bank of the United States]] and [[Second Bank of the United States]] as well as various protectionist measures (e.g. the [[Tariff of Abominations|tariff of 1828]]). Several of these proposals met with serious opposition and required a great deal of horse-trading to be enacted into law. For instance, the First National Bank would not have reached the desk of President [[George Washington]] in the absence of an agreement that was reached between [[Alexander Hamilton]] and several Southern members of Congress to locate the capitol in the [[District of Columbia]]. In contrast to Hamilton and the [[Federalist Party|Federalists]] was [[Thomas Jefferson]] and [[James Madison]]'s opposing political party, the [[Democratic-Republican Party|Democratic-Republicans]].

Most of the early opponents of ''laissez-faire'' capitalism in the United States subscribed to the [[American School (economics)|American School]]. This school of thought was inspired by the ideas of Hamilton, who proposed the creation of a [[First Bank of the United States|government-sponsored bank]] and increased tariffs to favor Northern industrial interests. Following Hamilton's death, the more abiding [[Protectionism|protectionist]] influence in the antebellum period came from [[Henry Clay]] and his [[American System (economic plan)|American System]]. In the early 19th century, "it is quite clear that the ''laissez-faire'' label is an inappropriate one" to apply to the relationship between the United States government and industry.<ref name="Prince Taylor">{{cite journal|last1=Prince|first1=Carl E.|last2=Taylor|first2=Seth|year=1982|title=Daniel Webster, the Boston Associates, and the U.S. Government's Role in the Industrializing Process, 1815–1830|journal=Journal of the Early Republic|volume=2|issue=3|pages=283–299|jstor=3122975|doi=10.2307/3122975 }}</ref> In the mid-19th century, the United States followed the [[Whig Party (United States)|Whig]] tradition of [[economic nationalism]], which included increased state regulation and [[Macroeconomics|macroeconomic]] development of infrastructure.<ref name=guelzo>{{cite book|first=Allen C.|last=Guelzo|title=Abraham Lincoln: Redeemer President|isbn=978-0-8028-3872-8|year=1999|url=https://archive.org/details/abrahamlincolnre00guel|publisher=W.B. Eerdmans Pub. Co|location=Grand Rapids}}{{page needed|date=March 2022}}</ref> [[Public works]] such as the provision and regulation transportation such as railroads took effect. The [[Pacific Railway Acts]] provided the development of the [[First transcontinental railroad]].<ref name="guelzo"/><ref>{{Cite web|date=2019-05-10|title=From Sea to Shining Sea: The Heroes and Villains of the First Transcontinental Railroad|url=https://theobjectivestandard.com/2019/05/from-sea-to-shining-sea-the-heroes-and-villains-of-the-first-transcontinental-railroad/|access-date=2021-04-29|website=The Objective Standard|language=en-US|archive-date=2021-04-29|archive-url=https://web.archive.org/web/20210429210027/https://theobjectivestandard.com/2019/05/from-sea-to-shining-sea-the-heroes-and-villains-of-the-first-transcontinental-railroad/|url-status=live |last1=White |first1=Tim }}</ref> To help pay for its war effort in the Civil War, the [[Federal government of the United States|United States government]] imposed its first personal [[income tax]] on 5 August 1861 as part of the [[Revenue Act of 1861]] (3% of all incomes over US$800; rescinded in 1872).

Following the Civil War, the movement towards a [[mixed economy]] accelerated. Protectionism increased with the [[McKinley Tariff]] of 1890 and the [[Dingley Tariff]] of 1897. [[Government regulation]] of the economy expanded with the enactment of the [[Interstate Commerce Act of 1887]] and the [[Sherman Anti-trust Act]]. The [[Progressive Era]] saw the enactment of more controls on the economy as evidenced by the [[Woodrow Wilson]] administration's [[The New Freedom|New Freedom]] program. Following [[World War I]] and the [[Great Depression]], the United States turned to a mixed economy which combined [[free enterprise]] with a [[Progressive tax|progressive income tax]] and in which from time to time the government stepped in to support and protect American industry from competition from overseas. For example, in the 1980s the government sought to protect the automobile industry by "voluntary" export restrictions from Japan.<ref>{{cite journal|author=Robert W. Crandall|year=1987|title=The Effects of U.S. Trade Protection for Autos and Steel|journal=Brookings Papers on Economic Activity|volume=1987|issue=1|pages=271–288|doi=10.2307/2534518|jstor=2534518|url=https://www.brookings.edu/wp-content/uploads/1987/01/1987a_bpea_crandall.pdf|access-date=2019-09-24|archive-date=2019-10-01|archive-url=https://web.archive.org/web/20191001135513/https://www.brookings.edu/wp-content/uploads/1987/01/1987a_bpea_crandall.pdf|url-status=live}}</ref>

In 1986, Pietro S. Nivola wrote: "By and large, the comparative strength of the dollar against major foreign currencies has reflected high U.S. interest rates driven by huge federal budget deficits. Hence, the source of much of the current deterioration of trade is not the general state of the economy, but rather the government's mix of fiscal and monetary policies – that is, the problematic juxtaposition of bold tax reductions, relatively tight monetary targets, generous military outlays, and only modest cuts in major entitlement programs. Put simply, the roots of the trade problem and of the resurgent protectionism it has fomented are fundamentally political as well as economic".<ref>{{cite journal|author=Pietro S. Nivola|year=1986|title=The New Protectionism: U.S. Trade Policy in Historical Perspective|journal=[[Political Science Quarterly]]|volume=101|issue=4|pages=577–600|doi=10.2307/2150795|jstor=2150795}}</ref>

A more recent advocate of total ''laissez-faire'' has been [[Objectivism|Objectivist]] [[Ayn Rand]], who described it as "the abolition of any and all forms of government intervention in production and trade, the separation of State and Economics, in the same way and for the same reasons as the separation of Church and State".<ref>Rand, Ayn ''Capitalism: The Unknown Ideal,'' Ch. 7, New American Library, Signet, 1967.</ref> Rand's political philosophy emphasized [[individual rights]] (including [[Private property|property rights]])<ref>{{harvnb|Peikoff|1991|pp=350–352}}.</ref> and she considered ''laissez-faire'' capitalism the only moral social system because in her view it was the only system based on the protection of those rights.<ref name="rights">{{harvnb|Gotthelf|2000|pp=91–92}}; {{harvnb|Peikoff|1991|pp=379–380}}.</ref> She opposed [[statism]], which she understood to include [[theocracy]], [[absolute monarchy]], [[Nazism]], [[fascism]], [[communism]], [[socialism]] and dictatorship.<ref>{{harvnb|Peikoff|1991|pp=369}}.</ref> Rand believed that natural rights should be enforced by a constitutionally limited government.<ref>{{harvnb|Peikoff|1991|p=367}}.</ref> Although her political views are often classified as [[Conservatism in the United States|conservative]] or [[Libertarianism in the United States|libertarian]], she preferred the term "radical for capitalism". She worked with conservatives on political projects, but disagreed with them over issues such as religion and ethics.<ref>{{harvnb|Burns|2009|pp=174–177, 209, 230–231}}; {{harvnb|Den Uyl|Rasmussen|1986|pp=225–226}}; {{harvnb|Doherty|2007|pp=189–190}}; {{harvnb|Branden|1986|p=252}}.</ref> She denounced [[libertarianism]], which she associated with [[anarchism]].<ref>{{harvnb|Sciabarra|1995|pp=266–267}}; {{harvnb|Burns|2009|pp=268–269}}.</ref> She rejected anarchism as a naïve theory based in [[subjectivism]] that could only lead to collectivism in practice.<ref>{{harvnb|Sciabarra|1995|pp=280–281}}; {{harvnb|Peikoff|1991|pp=371–372}}; {{harvnb|Merrill|1991|p=139}}.</ref>