There are a lot of myths and misconceptions about what exactly economics is and what us economists mean when we say certain phrases. Unfortunately, a lot of that is our own doing: for all our collective brainpower, we are incredibly bad at naming things. I’ve attempted to address some of these misnomers in the past, now let me tackle one very close to my heart: laissez-faire economics.
I’m pretty sure it’s blatantly obvious to you, dear readers, that I am a free market economist. We are sometimes referred to as “laissez-faire” (French for “let alone” or “hands off”) economists. The implication of such terminology, however, is that there is no active participation in the market, that whatever will be will be. But this is not a “Jesus, take the wheel” situation. In order for a market economy to function, it needs active participation. What we don’t want is government, and specifically government, to take the wheel. Individuals will drive their own lives toward their goals, but not governments. Individuals will interact with one another to solve economic problems, but we do not want it driven by government. Individuals will help one another, but we don’t want it driven by government. To quote the character Hayek from one of the nerdiest/greatest music videos of all time:
I don’t want to do nothing, there’s plenty to do
My question is, who plans for who?
I want plans by the many, not by the few
Give us a chance so we can discover
the most valuable ways to serve one another.
So, it’s really incorrect to say we want a hands-off approach to the economy. It’d be more accurate to say we want a government-hands-off approach.