Laissez faire is an economic theory that favors the free market and is suspicious of government intervention in the conduct of business and industry. It encourages private ownership and personal initiative as the best means to enrich individuals and societies. Most laissez-faire economists would admit that there are situations when government intervention is essential, but they would prefer to keep the state's role to a minimum. The term arose in the seventeenth century, when a French merchant responded to royal minister who asked how the government could help him by saying, "Laissez nous faire." The phrase is probably best translated, "Let us be." By the late eighteenth century a group of French economists known as physiocrats popularized the theory as a reaction against a system of state controls over the economy known as mercantilism. They maintained the laws of nature, not state regulation, will foster prosperity. Also the British economist Adam Smith 1723–90), who has been called the "father of modern economics," argued that the market would regulate enterprise more effectively than governments. The theory was most widely accepted in Great Britain and the United States in the nineteenth century, but in the early twentieth century it was in part discredited by the misery that was associated with the Industrial Revolution. In the late twentieth century, however, there was a reaction against intrusive government regulation and high taxation, and the reaction was aided by the failure of socialism in Eastern Europe. Laissez-faire principles were again celebrated in the United States under President Ronald Reagan (1980–1988) and in Great Britain under Prime Minister Margaret Thatcher (1979–1990). Her program of selling of government-owned industries to private investors, which was called privatization, has been adopted by many countries throughout the world.
See also: Capitalism, Mercantilism, Ronald Reagan, Adam Smith