A Laissez Faire Economy

A Laissez Faire Economy

  • Submitted By: arn7
  • Date Submitted: 08/29/2009 7:58 AM
  • Category: Business
  • Words: 771
  • Page: 4
  • Views: 1423

Laissez – faire economy leads to anarchy


India post independence has never ever followed a laissez – faire economy as Indian economist already understood that Laissez Faire economies lead to anarchy. In a country like India business has always been regulated by policy makers and hence there lies a close link between the two. The Government in India has always been laying down regulations in various sectors of the economy be it domestic investments as well as foreign direct investment (FDI) the Government has the power of decision. Also, even when it comes to taxes including corporate taxes, excise duties etc the taxes in most sectors leaving core sectors like agriculture and infrastructure are relatively higher than countries following an open ,market policy. A laissez – faire policy is completely detrimental in the interests of developing and emerging countries like India who still have a lot to achieve in economic and social welfare. It will have a negative aspect as FDI by foreign players will be far higher than what domestic companies can invest in various sectors thereby harming local industrialist and also if cheaper goods are brought into the country and sold by manufacturers in China who have great economies of scale our countries industries will be at risk and if the demand for domestic products go on a decline a large amount of employees and labourers will be laid off and unemployed as Indian companies will be at loss and will have to sooner or later shut shop and this entire cycle could lead the economy into recession.
Laissez-faire activists support little or no state intervention on economic issues, which implies free markets, minimal taxes, minimal regulations and private ownership of property. They support certain kinds of negative liberty as opposed to positive liberties, such as wealth redistribution, given by the state. However, some laissez-faire proponents, like progressive libertarians prefer negative income tax as a replacement to...

Similar Essays