Laissez-Faire is a French phrase meaning literally " let do, let pass," which have been applied to the principles of economics. laissez-faire economic theory holds that individualls be allowed to pursue their own interests with as little goverment intervention as possible. It was popularized in englishlish-speaking country in the 18th and 19th centuries by Adam Smith (1723-1790), who was both a philosopher and economist and is considered to be th " father of modern economics."
Smith sought to understand and explain the market system of his time. he felt that a majority of people saw confusion when they observed economic activity in England during the middle of the 18th century. At the time it seemed that almost everyone was doing, economically, whatever they wanted to make. Consumers purchased whatever thay wanted to buy. People didn't tell each other what had to be bought and what had to sold, especially the goverment. And yet, somehow, bussinesses seemed to be providing the goods and the services that consumers wanted and needed. Some might have called this luck; Adam Smith called it an " invisible hand." Today, this economic concept is called the laissez-fair economy.
the " invisible hand" is a term for the unseen process of co-ordination which ensures consistency of invidual plans in a decentralized market economy. Adam Smith introduced this phrase in his book, An inquiry into the Nature and causes of the Weath of Nations, in which he stressed the role that the invisible hand played in attaining a harmony af inetrests.
Image this invisible had suspended above everyone. This invisible hand encourages businesspeople to pursue profits, and pushes consumers to buy goods and services. And at the same time, that invisible hand discourages goverment from directing the economic activity.
The invisible hand that Adam Smith reffered to as a guiding force was the people and their attitudes. It all started with profit-seeking individuals. Using self-interest to feed their drive, people started their businesses. When a business would become successful, others would notice and eneter into the same field. As a direct result, growing consumer demand was satisfied while competion controlled rising prices. As demand grew, bussenesses were established in which workers shared tasks. This is called division of labor, in which one worker handled the first stage, another the second, and a third finished the product. The result was mass production, more efficiency, and lower costs. Mass production