SCHOOL OF LAW

UNIVERSITY OF KASHMIR
NAAC Accredited Grade - ( A+ )

Project By Harib Muzaffar

Roll No 38
Course B. A. LL. B
Semester 1st
Subject Political Science
Topic Laissez-faire State & how it paved the way of
Welfare state
Submitted To Dr. Aejaz
Laissez-faire State, “Individualism”.

What is laissez-faire individualism?

Laissez-faire individualism promotes no intervention of state at all, individual is the center of this philosophy,
where the rational faculty of an individual is trusted hence the state does not interfere in any sense. Since an
individual is rational he can think of his own self interest and then only the society can progress. It does not
promote any kind of aid to the vulnerable sections of the society by arguing that giving an individual more than
he deserves impedes the social progress. Therefore human welfare is ignored.

Philosophers who thought on Individualism or Laissez-faire state;

Adam Smith (Father of economics & microeconomics)
Economic man is a rational person geared towards self interest and generating wealth.
Because a human being is rational he’s always geared towards the best for himself.
Adam Smith talks about The Invisible Hand.
The Invisible Hand;
The person who focuses on his/her own needs actually contributes to the public good, The unobservant
Market Forces that help the demand and supply of goods in a free market to reach the Equilibrium.
It lets the market run on its own and thus the market and economy prosper, states intervention hinders and
impedes the market forces and the potential of market gets distorted, hence its considered as Public loss.

Role of state according to Laissez-faire state

The state of Laissez-faire assigns three main roles to the state;
1. Protect the state from external threats, invasion, aggression, takeover. It assigns the role of defense to the
state.
2. Enforce justice and protect the citizens from each other, and enforce the natural rights which were the
outcomes of the Social Contract Theory.
3. Duty of erecting and maintaining certain public works and institutions that can never be for the interest of
any individual or small number of individuals.

Jeremy Bentham (father of utilitarianism)

Utilitarian theory (Hedonistic calculus of human nature);
1. Intensity (how strong is its feeling?)
2. Duration (how long it lasts?)
4. Certainty (how certain we feel to have it?)
5. Proximity or propinquity (how near it is to us, i.e how early we can have it?)
6. Fecundity (does it also produce other types of pleasure?)
7. Purity (no pain is mixed to it)
8. Extent (how many people are affected with it?)
Maximization of pleasure and minimization of pain.
J. Bentham disagrees with Social Contract and considers it illogical and ahistorical.
According to him the natural law and state of nature doesn’t exist and society is organic in nature. It depended
on pain and pleasure and state came to cater human nature.
Principle of Utility (Greatest happiness principle);
Primary motivators in human beings are pleasure and pain. Right action gives the greatest balance of
pleasure over pain.
Liberty (The sovereign’s will/ state’s result) is the greatest happiness principle, and Law restricts the liberty,
hence evil.
Good Law; protect ones economic and personal goods and that what government exists is self government.
Law reflects the interests of the individual.
Natural a fallacy;
Rights are created by the law and law is simply the command of sovereign. Therefore it requires Government.
Universal interest of legislation;
State must employ a utilitarian calculation in which the pain experienced by the few is reduced to the minimum
necessary to produce the benefits for the many and only on that basis may pleasures be summed and pains
subtracted in order to produce the rationale to justify the best policy. (pain to few is to minimum and produces
benefits to maximum).
Facilitating individuals in the pursuit of their interests in a free market is what Govt should do proves best way
to maximize public good.
Punishments from aiding the cause of good governance. However two basic rules have to abide by.
1. Offence must be classified
2. Ratio in proportion to offense

James Mill (1733-1836)

James mill is famous for popularizing the ideas of his favorite thinkers rather than giving his own original
thought.
He founded his philosophical radicalism on the basis of Jeremy Bentham’s utilitarianism and led a radical
reformist movement aiming extension of franchise and representation of the interests of the working class in
British Parliament.
Rather than that Mill had intensive study of Hobbes’ individualism and Adam Smith’s classical political
economy.
After his analysis he came to a conclusion that all the functions of the aristocratic state were impeding the way
to the greatest happiness of the greatest number’
Essays on Government (1825) he commended democratic as good government which sought to work for the
benefit of citizens. He argued that aristocratic government is motivated by self-interest which promotes
corruption. And that corruption will be prevented by instituting the representative type of government based
on universal suffrage, secret ballot and periodic elections.
James Mill particularly linked the middle rank and hoped that when democratic institutions are established, the
people would follow their footsteps.

Herbert Spencer (Sociologist)

Herbert Spencer gave the sociological foundation of Laissez-faire individualism.
There are three essays in which Herbert Spencer gave the idea of Laissez-faire individualism.
1. Social Statics (1850)
2. The Man versus state (1884)
3. The Principles of Ethics (1892-93)
According to Herbert Spencer the universal evolution H. Spencer postulated the tendency of all things to
ultimate equilibrium and the consequent tendency of all things to transform themselves by a process of
evolution in order to attain this equilibrium, accordingly tends to equilibrate himself with his social
environment by adaptation and by inheritance of that adaptation, until he attains, in a perfect equilibrium, the
blessedness of anarchy.

Process of evolution state has a very limited role to play, the roles are;
1. Function of protection (administration) of the law of equal freedom.
2. Protect individuals from each other.
3. Protection from the external invasion.
H. Spencer treated the state as a “joint stock company for mutual assistance” it should not assume any other
function, nor otherwise interfere with the process of natural evolution.
Spencer shall not give any kind of assistance to any individual, therefore no public health and no relief to the
poor by the reason that it would defeat the operation of the law of natural selection, Spencer applies the
principle of struggle for existence & survival of the fittest as guiding the principle of social evolution.
Family ethics (rule of diverting common resources towards maintenance of the weak), applied to the
state it retards the process of giving the weakling more than he deserved & perpetuated an under saving life.
Spencer stretched the concept of negative liberty to such an extreme extent that he considered elimination of
the weak in the struggle for existence as part of the process of Social progress.

Herbert Spencer related the study of society with the Evolutionary Theory of Charles Darwin, hence proposed a
synthetic philosophy.
According to Spencer, Progress is necessary for the evolution of ones own qualities, to take the best of one out,
to explicit the ones potential to progress hence take the society forward.
He also argued that for Natural growth of an organism it requires liberty due to his commitment to the law of
equal freedom and his view that law and the state would of necessity interfere with it, he insisted on extensive
policy of Laissez-faire and commented “all socialism is slavery”.
Insisted that the state’s intervention shall be minimum.
Rights are essential to progress and work of government was to be restricted to administer justice.
Government/state exists just because of the consent of individuals.
He considered state as a joint stock company and the directors (government) can never act for a certain good
except on the explicit wishes of its share holders (individuals).
Government Imposes conception of good life by promising free health, education etc but by applying a
teleological conception of life were as good as tyrannies.
The ones who do not compete impede the society and hinders the social progress.

Herbert Spencer advocates Anarchy, he’s an anarchist.

Therefore Laissez-faire individualism talks about extreme Negative liberty in which the state
has the minimal role to play which is just the administration of justice and protection from
each other moreover from external invasion, there are no regulations on the economy.

What’s a welfare state?

A state that provides for various types of social services for its citizens, e.g. social
security (financial assistance in case of loss of job or any other source of income,
death of the bread-winner, prolonged illness or physical disability or any other calamity),
free education, public health, poor relief, supply of essential goods and services like
Food grains, milk, fuel and transport to the needy at subsidized rates. It undertakes the
protection of cultural heritage including monuments, museums, libraries, art galleries,
botanical gardens and zoological parks, etc. It also promotes higher education and
scientific research, etc. to step up intellectual and cultural development of society.

Transition from negative liberalism (Laissez-faire state) to positive liberalism

(welfare state), how Laissez-faire paved the way of welfare state.
Liberal theory which stood for negative liberalism in its early phase, was
transformed into positive liberalism in its later phase. Positive liberalism promoted
the idea of welfare state, as it proposed the positive role of the state (positive liberalism) in securing
welfare of its citizens, particularly of their vulnerable sections while as Negative liberalism had an aim to
establish free-market society which promoted capitalism. The success of capitalism in the nineteenth century
demonstrated that the free-market society created large inequalities among human beings and
promoted oppression of the vulnerable sections—workers, peasants, consumers,
etc. With the enormous growth of the labour force in industrial cities, freedom of contract in practice meant
freedom for factory-owners to hire and fire their workers to maximize their profits with the consequent
insecurity and suffering of the workers. Freedom of trade was not restricted to commodities—labour
was also treated as a commodity. The result was inhumane conditions for the workers, child labour, slum
housing, and free sale of poisoned meat, bad gin and other things injurious to health. When freedom of
enterprise was interpreted as the total absence of regulation on business and industry, it brought disastrous
consequences for the bulk of society, not the greatest happiness of the greatest
number held so dear by the classical economists and classical liberals had sought to justify a free-market
society on the basis of the 'equality' of individuals. Bentham had argued that in aggregating individual utilities,
each individual was to count as one. He had sought to justify the liberal state as the state most calculated to
maximize utilities—security of life, freedom of individual movement, security of property, etc.
He had also postulated that a free-market society enabled each individual to maximize his own utility, and
therefore brought everyone into productive relations which would thus maximize the aggregate utility of
society. But in this process he was caught in a dilemma - to reconcile theoretical equality with practical
inequality. As C.B. Macpherson, in his Democratic Theory- Essays in Retrieval (1973), has aptly illustrated:
Bentham was clear that the market must be left to determine the allocation of the material product
among the individuals who contributed to it b their labour or land or capital, although he saw that this
would mean persistent inequality. He acknowledged, indeed, that there was a case for equality of
wealth or income.
This followed from the principle of diminishing utility—the principle that a second loaf of bread doesn't give
a hungry man as much satisfaction as the first loaf, or more generally that the more you have of anything the
less the utility to you of any increment. Given this principle, and given that each individual's satisfaction was to
count as one, it followed that the aggregate utility of the whole society would be greatest if everyone had equal
amounts of wealth. Bentham tried to escape from this dilemma by introducing another element—
the criterion of productivity—and decided the case in favour of inequality. As Macpherson has further
elucidated: As soon as Bentham had thus demonstrated the case for equality he argued that it had to yield to
the case for productivity. Without security for unequal property, there would be no incentive to capital
accumulation, and without capital accumulation there would be practically no productivity. Besides,
without a large labour force whose incentive was fear of starvation, the market could not maximize
productivity.
However the philosophers could not escape from the realty of laissez-faire (individualism), as the number of
working class had enormous increment and their condition was deteriorating and it could not be kept behind
the curtain for any longer. The socialists were already looking for a solution of the situation or the working
class. There was this realization that its not fit that certain inequalities are piling and people are exploited of
their natural rights. Liberals had to come with a new theory of the solution of the skying inequality otherwise
the whole mechanism was to tumble down. Resulting in the tenets of the liberal theory were revised towards
the last quarter of the 19th century and the process of re considering went on during the 20th century.

John Stuart Mill (1806-73), was the first prominent liberal philosopher who started with a defence of laissez-
faire individualism, but on realizing its weaknesses in the light of new socio-economic realities, he proceeded to
modify it. In the event he proved himself to be the chief exponent of positive liberalism. After John Stuart Mill,
Thomas Hill Green (1836-82) and L.T. Hobhouse (1864-1929), both English political thinkers, made important
contributions to the theory of positive liberalism. Green and Hobhouse insisted on a positive role of the state in
removing social inequalities, and they stated their case eloquently and convincingly. Subsequently in early
twentieth century Harold J. Laski (1893-1950), an English political thinker, and Robert M. Maclver (1882-
1970), an American Sociologist, sought to provide new foundations for the liberal theory-a pluralistic base in
the existing circumstances. individualistic base which was not found to be strong enough.

John Stuart Mill

J.S. Mill played an important role in drawing a distinction between the political and economic spheres, and in
working out the implications of liberal theory in these spheres. Thus, while in the political sphere he proved
himself to be a strong supporter of constitutional and representative government, in the economic sphere he
showed socialist leanings and laid the foundations of the 'welfare state'. In this way, Mill gave a positive
direction to liberal theory.

There are 2 aspects of the whole idea now according to me;

1. If laissez-faire individualism never existed there would be no glaring inequalities and deterioration of human
beings. And the welfare state was not required if there were no inequalities in the society. Agreed that the
inequalities are since the existence of the human beings, but the individualism caused an immense increment in
the inequalities in the society.
2. Laissez-faire individualism caused a lot of damage to the society but ultimately it’s the reason that welfare
state exists today. All the democracies of either developing or under-developed countries are compelled to have
the welfare nature of state. The rights of individual are protected and individuals not so rich get basic facilities
on reasonable subsidies and get reservations in getting jobs, etc. Even in the developed countries like America,
who have capitalist economy, promote the welfare of individuals by proposing certain policies like Housing
assistance (Support for renters and homeowners in populations such as the elderly and those with disabilities,
typically for those meeting income requirements), Medicaid (Low-cost or free health coverage for those in
need, including income-eligible families with children and pregnant women), Supplemental Nutrition
Assistance Program (SNAP) (Food and nutrition assistance for low-income individuals), Temporary
Assistance for Needy Families (TANF) (Financial assistance and support services related to work, child care,
and job preparation for income-eligible unemployed and underemployed people).
In my opinion the laissez-faire individualism (negative liberalism) was disastrous but ultimately it paved the
way of the welfare state (positive liberalism) role of state to protect the vulnerable sections of the society,
peasants, labors, etc.
Therefore it was necessary for “Laissez-faire individualism” to exist in order to pave the way of “welfare
state”.