To understand the strengths and weaknesses of the laissez-faire economic policy, you first have to understand what the laissez-faire economic policy is. The laissez-faire economic policy comes from the French phrase laissez-faire meaning "let things alone." As a result, the laissez-faire economic policy means a strict free market. Some strengths of this economic policy are there are no regulations or taxation on commerce. This encourages the growth of businesses. However, with this type of economic system if a business does poorly or needs help the government isn't responsible. So, even though the laissez-faire economic policy has some good advantages, it also has a major disadvantage. Sources: http://www.u-s-history.com/pages/h844.html
One of the strengths of a laissez-faire system is the growth of businesses, as I mentioned in the earlier post. With anyone, who has the right requirements, able to start a business the number of products grows. Therefore, the GDP, or gross domestic product, grows, and a growing GDP means a healthy economy. This means more businesses will grow and jobs will become abundant. It's like a cycle. Therefore, the laissez-faire economic system has a very positive advantage. Sources: http://www.enotes.com/history-fact-finder/economics-business/what-laissez-faire-capitalism http://useconomy.about.com/od/grossdomesticproduct/f/GDP_Growth_Rate.htm
A laissez-faire economy says that an economic system should be freed from govenrnment interfernece or moderation and be driven by the market forces instead. Laissez-faire is French for allow topass or let go. This concept was started in the 18th century by Adam Smith (Scottish). Smith's belief was that the economies' success would be mainly driven by the intrests of people. He thinks that the government would interfere with the natural intrest of people. Adam Smith knew that a balanced system of production and exchange would emerge. That ended up happening. Another advantage was that everyone benefitted in this exchange. Lassez-faire has been renamed free enterprise which is a more familiar term for people today. This system is believed in especially by the Bush team. However, there were certain issues with this system. One was that if a company were to fall the government would have to let it. In a country like China where the government is allowed to interfere as much as they want so the business would not fall. With no government involvement monopolies form. Also the workers tend to get harsh treatment. However, in the end I support Adam Smith. I find that this type of interest and competiton easily makes up for the cons. http://www.businessdictionary.com/definition/laissez-faire-economics.htmlhttp://economics.about.com/od/governmenttheeconomy/a/laissez_faire.htm
Before i get into the strengths and weaknesses of the economic system, I'd like to state the definition of the phrase. It means "The opinion that an economic system should be driven by free market forces, not government intervention." And is it French for "leave it be".But anyway, the Laissez Faire economic system "argues that the economy works best when it is governed solely by market forces." Like the market is left to run on its own. There shouldn't be government intervention in forms of taxes, unions, duties, tariffs, quotas, restrictive laws, or monetary policies. The system is a capitalism. "Capitalism involves the ownership of property by individuals." Individual's goal is to use this property to make income. And because of the meaning of Laissez Faire, supporters of it don't want government to interfere with business matters, or at least keep the influence to a minimum. http://www.investorwords.com/2714/laissez_faire.htmlhttp://wiki.answers.com/Q/What_is_the_Laissez-faire_economic_theoryhttp://www.enotes.com/history-fact-finder/economics-business/what-laissez-faire-capitalism
The laissez-faire economic system was used in the United States in the 1920s. President Coolidge, the president at that time, thought that the laissez-faire economic system would benefit the US, and it did. Businesses prospered and, the American people were happy. With shorter working hours and labor-saving machines, Americans had more free time. As a result, they went movies and sports events because they had the time and the money. Overall, in 1929, the money spent on entertainment went up by a 100% in a decade. The laissez-faire economic system is part of what made the "Roaring Twenties" so great. Sources: Textbook
As for the strengths and weaknesses, there aren't many that i could find for both on the Laissez Faire System. But for strengths, the system is good because businesses have responsibility and "less direction is required". I'm guessing that means that the businesses can kind of do the job without the government telling them everything they have to do, what to do, and when to do it. Like the business has more responsibility and can take care of them self. And for the weaknesses, there are more of them than strengths i think. Like one weakness is that this system can get the business off track, and lose focus so they could fail as a business. And like it proves poor management skills and it just lets it show that the businesses don't care anymore now that they have responsibility and they are less interested.I personally don't care for the Laissez Faire system because employees and people with businesses need direction in their life. Like if i was in a business with the system running our government, not letting them help us, i would certainly fail. Like just thinking about running my business without help from the government, like no money and stuff, i wouldn't survive.http://www.blurtit.com/q841759.htmlmy head
I think that with this policy people are able to really excel. If the government owns everything then nobody gets a fair chance to be better. Lassez-faire is a principle that suggests that an economy is most efficient when not hampered by the government. It opposes regulation and encourages self-interest and competition. I think that self-interest and competiton are very important. However, lassiez-faire was not always accepted by the United States. They used to think that the economy would not be able to flourish and many industries would drop if left alone. However, people like Theodore Roosevelt and Woodrow Wilson were able to convince people that lassez-faire is the right way to go. In the "roaring 20s" laissez faire finally became truly accepted.
You tell it sister!
This is my source for the second posthttp://www.u-s-history.com/pages/h844.html
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