What are the advantages and disadvantages of laissez faire theory?

Answer 1

Laissez-faire theory believes:

• The individual is the basic unit in society.
• The individual has a natural right to freedom.
• The physical order of nature is a harmonious and self-regulating system.
• Corporations are creatures of the State and therefore must be watched closely by the citizenry due to their propensity to disrupt the

Advantages:

• The government allows business to grow at will.
• To a point, it increases the overall efficiency of the economy.
• To a point, it reduces corruption.
• It increases economic freedom.

Disadvantages:

• It leads to ultrapowerful megacorporations that dominate the market and destroy fair competition and enterprise. Eventually, these megacorporations eventually corrupt the government and erode democratic and political freedoms.
• It results in a highly unstable economy which suffers numerous bubbles. When the bubbles burst, the corporation are not hurt as much as it hurts the people, especially the lower class.
• It causes degeneration and destruction of local environments, and puts local populations at serious health risks.
• It alienates foreign markets.
• It causes massive wealth disparity and a large portion of the society lives on meager wages.