NAMA : DWIKA YUNISA

NIM     : 042481149

DISCUSS SESION 6 - Bahasa Inggris Niaga (ADBI4201)

1. What does “Laissez-Faire” mean?  

ANSWER:

Laissez-faire is an economic theory that has developed since the 18th century. Those who adhere
to this theory believe that the government does not need to interfere in people's business
activities. Alias, considers that the economy must run according to what it is.The word laissez-
faire itself comes from French which can be interpreted as "leave it as is". The theory assumes
that the smaller the government intervention in economic activities, the more qualified the
community's business activities will be. So, therefore, this laissez-faire principle is often
considered the main root of the economic theory of free capitalism. Hence, laissez-faire theorists
are those who reject the existence of legal products in order to regulate the running of the
economy. For example, such as Laws (UU), Government Regulations (PP), to Presidential
Regulations (PP) which regulate minimum wages, taxation, and trade.

2. How is “Laissez-Faire” still relevant today? What are the weaknesses of “Laissez-Faire”?

ANSWER:

Laissez-Faire Will Never Be Relevant

Until now, it seems that there has never been any country in the world that has let go of its
economy 100% and let the invisible hand work (there is no pure government intervention in the
economy). The United States, which is considered a super free country, still uses the Fed rate to
control inflation, reportedly at the last meeting of July 2016 it was set at 0.25% -0.5%.In
addition, the late Adam also wanted the state to minimize taxes, because taxes were considered
only successful in increasing the cost of living. Well, just imagine if this is used by our country.
The tax contribution is still the largest in the APBN. In the years ahead, laissez-faire
understanding or the like may never be achieved. Like it or not, the state is responsible for the
impact of the national and international economy. Just look at the Great Depression of 1929 that
devastated the world economy, then the case of one country Subprime Mortgage in 2008, namely
the US undermined the economy to Indonesia. Laissez-Faire has never been relevant.

The weaknesses of "Laissez-Faire" :

a. Increasing income inequality

b. The common or common interest is neglected

3. Do you think government’s supervision in economic activities should be significant?  

ANSWER:

YES,  I think government’s supervision in economic activities should be significant because

Supervision has a number of important functions. In addition to the consistent implementation of
regulation, supervision can complement regulation in dealing with the financial sector's
continuous innovation and adaptation, thereby reducing the need for frequent rule changes and
promoting regulatory stability. Moreover, supervision can go beyond the quantitative
requirements to address qualitative matters such as corporate governance, influencing banks to
change their risk culture for the better. In short, there is a lot that supervisors can and should do
to help make banks not only more resilient but also more reliable - and thus more able to perform
their intended economic and social function.