Trust but verify. The confidence in laissez-faire is deserving only of marketplaces proven to govern themselves appropriately.
Let go
Laissez-faire, meaning “letting go” in French, generally refers to the notion that less government is better than more. Ignoring from the outset that all open marketplaces usually require the same amount of governance, as the participants are generally the same. As such, let me answer the question of who governs best in what situation.
The letting-go by the government, as insinuated by the question, can only responsibly occur and not turn into chaos and mistrust with the establishment of modern principles applied to free-market constructs. Regulations our old constructs of economics have failed to establish.
Of freedom
In short, the establishment of paradoxical rules of freedom defined in a preemptive playbook must be designed to serve to 1) protect collective freedom amidst 2) the maximization of individual liberties. Free markets only approach a reliable proxy of freedom when a vile maxim of personal interests does not damage our collective interests.
Laissez-faire has generally been implemented as simplistic and error-prone absolutism, with little or no government interference. The private sector will establish independent governance to protect collective freedoms in such a context. The reality is that the past has demonstrated a private sector run “free” and remunerated by the chase for short-term quarterly earnings yields rather grandiose ignorance of the protection of the collective interests of long. Thus, laissez-faire has yielded an erosion of trust in the marketplace to which the methodology is applied.
The Damage
A clear example of the misconduct of laissez-faire implementations is the creation of a tobacco industry, which produced great short-term wealth for a few. With insufficient self-governance by the private sector of smoking’s devastating consequences, it has become the third leading cause of death (in the U.S.) some thirty years later. The reigning in of laissez-faire deployed too late to stave off our currently unsustainable medical insurance premiums, now severely damaging the health of our collective interests. There are many other examples.
The reality is we in the U.S. have not deployed free-market systems at all, for we have never deployed freedom’s paradox, nor have we deployed freedom as a relativity theory that can encompass the world. Instead, we have implemented freedom as one-dimensional absolutism void of the protection of (even our own) collective liberties.
Rights and obligations
So, to expect to benefit from the reduction of government interference from laissez-faire, we must begin to treat freedom as relativity theory, to mimic more accurately the aspirations and inspirations of the world’s diverse ingenuity and capacity, and implement its paradox as the preemptive playbook to stave off infractions to damage collective interests. The theory of the playbook of a free market, guided by its paradox, decides what can be discovered to use Albert Einstein’s wisdom.
Only when we respect and endorse a plurality of freedom, its principles balanced by its matching and transparent paradox, can we expect the participants (not the government) to successfully apply most of the arbitrage of the marketplace in question and thereby induce the renewability of self-governance to maximize the trust, health, and longevity of its participants.
