Final answer:
The claim that free-market capitalism and laissez-faire capitalism are the same is true, as both advocate for minimal government intervention and rely on market forces like supply and demand to guide the economy.
Step-by-step explanation:
The statement that free-market capitalism and laissez-faire capitalism are essentially the same thing is true. Both economic philosophies advocate for minimal government intervention in the economy, allowing market forces of supply and demand to guide economic activity.
The concept of laissez-faire, a French phrase meaning 'let do' or 'let it be,' reached its peak in the United States during the late 1800s, aligning with the nation's rapid industrialization period.
Capitalism, or a free market system, is characterized by economic freedom, competition, and voluntary exchange. The key idea behind laissez-faire economics is that the best route to economic growth and development is to allow private markets to operate efficiently without government intervention.
This belief was widely held until the 1930s, when economic policies began to shift towards including more government intervention in response to issues like monopolies, recessions, and the need for regulatory standards.
The core principle, as outlined by Adam Smith, the Scottish economist and proponent of modern economic theory, is that the 'invisible hand' of competition in a free market leads to the most efficient distribution of resources and pricing. This fosters an environment where both producers and consumers can benefit, encouraging efficiency and choice.