Nama : Alya Nuraliza

NIM : 041790331

TUGAS 3 Bahas Inggris Niaga

The principles of Laissez-Faire are not valid anymore in this present time.

What Is Laissez-Faire?
Laissez-faire is an economic theory from the 18th century that opposed any
government intervention in business affairs. The driving principle behind
laissez-faire, a French term that translates as "leave alone" (literally, "let
you do"), is that the less the government is involved in the economy, the
better off business will be—and by extension, society as a whole. Laissez-
faire economics are a key part of free market capitalism.

Legend has it that the origins of the phrase "laissez-faire" in an economic

context came from a 1681 meeting between the French finance minister
Jean-Baptise Colbert and a businessman named Le Gendre. As the story
goes, Colbert asked Le Gendre how best the government could help
commerce, to which Le Gendre replied "Laissez-nous faire" – basically, "Let
us do (it)." The Physiocrats popularized the phrase, using it to name their
core economic doctrine.
Unfortunately, an early effort to test laissez-faire theories did not go
well. As an experiment in 1774, Turgot, Louis XVI's Controller-General of
Finances, abolished all restraints on the heavily controlled grain industry,
allowing imports and exports between provinces to operate as a free trade
system. But when poor harvests caused scarcities, prices shot through the
roof; merchants ended up hoarding supplies or selling grain in strategic
areas, even outside the country for better profit, while thousands of French
citizens starved. Riots ensued for several months. In the middle of 1775,
order was restored—and with it, government controls over the grain
market.
Despite this inauspicious start, laissez-faire practices, developed further by
such British economists as Smith and David Ricardo, ruled during the
Industrial Revolution of the late 18th and early 19th century. And, as its
detractors noted, it did result in unsafe working conditions and large wealth
gaps. Only in the beginning of the 20th century did developed industrialized
nations like the U.S. begin to implement significant government controls
and regulations to protect workers from hazardous conditions and
consumers from unfair business practices—though it’s important to note
that these policies were not intended to restrict business practices and
competition.

Do you agree or disagree to the statement?

agree,
Most modern industrialist countries now do not represent laissez-faire in
their principles or policies, because they usually involve a large number of
government interventions in the economy. These interventions include
minimum wages, corporate welfare, antitrust, nationalization, and social
welfare among other forms of government intervention. Subsidies for
business and agriculture, government ownership in several industries
(usually in natural resources), regulation of market competition, trade
restrictions in the form of protective tariffs - import kuta - or internal
regulations that take advantage of the domestic industry, and other forms
of government favor.