Essay on Laissez Faire

1833 Words 8 Pages
I don't view laissez-faire as the best economic system. In fact, under it the economy would suffer and only the big businesses would thrive. Laissez-faire is an economic theory which states that there is an Invisible Hand guiding the economy, thus there is no need for government involvement. The Invisible Hand refers to uncontrolled competition, with greed as the major factor, in fact it is considered by some to be the purest form of competition due to the fact that laissez-faire is basically the economic version of Darwin's survival of the fittest theory. He who is best will prevails, in theory anyway. The theory asserts that economy is capable of being its own guardian. An example of this is when two businesses produce similar products. …show more content…
Big business can afford to lower prices for their merchandise below that of smaller businesses. Eventually the smaller businesses would just not be able to stand the competition and be forced to close down. Without government control over business those monopolies could then begin to charge consumers any price they want. The consumers would have no other choice but to pay it, since by then no one else would be offering the product. If competition should happen arise from a smaller vendor the big business would simply drop their prices once more just long enough to drive the new competitors into bankruptcy, than it can once again charge whatever it wants. When this happens the consumers get taken advantage of.

The government has laws in place to prevent this from happening. It has antitrust laws as well as laws to prevent price gouging. Price gouging is substantially raising the price of a product when it is in high demand or extremely low supply. The antitrust laws prevent one business from becoming too big and preventing fair competition. They also prohibit a variety of practices that restrain trade, such as price-fixing conspiracies, corporate mergers likely to reduce competition of particular markets. In a laissez faire society none of these laws would exist, so the people of those societies would be getting the short end of the stick, so to
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