laissez faire

A doctrine that says government involvement in business and financial affairs should occur only at a very minimal level. It is French for “let them do as they please.” Adam Smith originated this theory in 1776, in his book The Wealth of Nations. Advocates of a laissez-faire policy believe that businesses should be able to pursue all opportunities as they see fit, and that the marketplace should act as an invisible hand in order to create the maximum good for everyone. Although this theory was popular during the 19th century, and businesses in the United States and Great Britain generally were able to do as they wished, the laissez-faire philosophy was severely restrained in the United States in the 20th century when the federal government broke up several large monopolies. Later, the Great Depression further changed the thinking of government officials, who felt compelled to take action to cope with severe unemployment.