Final answer:
Laissez-faire economics refers to a hands-off governmental approach in economic matters, with minimal to no interference. It argues that market forces of supply and demand should autonomously regulate the economy. This concept has seen varying degrees of application and criticism throughout history.
Step-by-step explanation:
A practice in which the government does not interfere or has minimal interference in economic matters is called laissez-faire economics. Originating from a French phrase that translates to 'let it be,' the concept suggests that an economy functions best when the government takes a non-interventionist approach. This theory became prominent in the U.S. during the late 1800s as a result of rapid industrialization and peaked before the Great Depression.
The principle of laissez-faire found its roots in the response by businessman Thomas Le Gendre to French finance minister Jean-Baptiste Colbert's inquiry about how the government could assist the business community. 'Let us do it,' Le Gendre purportedly said, setting the stage for this economic mindset.
Throughout history, laissez-faire policies have waxed and waned, often argued for by libertarians and free-market proponents who believe in minimal governmental influence over private enterprise and economic affairs. However, periods of laissez-faire have sometimes led to negative consequences like monopolies, poor working conditions, and unregulated markets, necessitating some degree of government intervention.
Despite shifts away from laissez-faire economics following economic crises and increased public demands for regulation, the debate continues, with some advocating for individual rights and limited government, while others argue for the importance of governmental oversight to prevent market failures and protect citizens. Proponents of laissez-faire assert that market forces of supply and demand can naturally regulate the economy without need for government intervention.