Laissez Faire Economics Essay

1056 words - 5 pages

Tommy Jones begged, pleaded, and hoped beyond hope for that new touch screen phone that would immediately move him up the social ranks at his school. His wish was granted on Christmas morning. He was rewarded with that sleek, black phone with 4G capabilities. Two months later the next phone in that series is out; it is almost an exact clone of the first model with the most moderate changes, and suddenly Tommy’s phone is obsolete. There was no great improvement when compared to the old model, no; the corporation knows that it will sell, no matter how small the improvement. This model of constant obsolescence has become the norm in the economy today; companies reap profits with mediocre products, completely uncaring of the consumers. To put the economy back in the hands of the consumers. A system of deregulation must be enacted to allow the marketplace to be run once again by consumer interest through reduced taxation, increased corporate competition, and an increase in consumer power in the marketplace.
Adam Smith theorized that the economy could be run entirely by consumer interest in his book The Wealth of Nations. Smith has become labeled by many as “the father of modern economics,” however his policy is quite simple, there should be a hands off policy by the government on the economy. This free market policy, in the simplest terms, means no government interference so that the marketplace will involve only private businesses and consumers. Although Adam Smith may not have explicitly labeled his views, they have since been dubbed, “Laissez-Faire”, the definition being “A policy or attitude of letting things take their own course, without interfering (OED Online).” The actual enacting of Laissez-Faire or free market policies means, reducing taxation and government interference, while increasing competition to allow the marketplace to belong solely consumers and corporations.
The first aspect of free market policies are the removal of government interference from the marketplace. This would leave only the consumers and corporations in the typical economic business model. Free market policies would also amputates any needless regulations such as quotas, tariffs, or unnecessary boundaries on corporations. In turn, production costs of goods and services are now reduced since money that would have gone to satisfying these regulations can now be supplied into the business. Now firms are able to afford to provide more of the same product at a lower cost for consumers, with extra revenue to improve production or even wages of the workers. These workers will then, in turn, have a larger amount of money to utilize to buy products now offered at a lower rate improving not one, but multiple businesses.
Another advantage with the removal of government interference from the economy is a reduction in the start up costs of new corporations along with a reduction in taxation, since less requirements and regulations are now in place. With business no longer...

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