Bars

What Is Laissez Faire Economics?

By Jeremy Bowman – Updated Nov 11, 2025 at 8:11 PM EST

Key Points

Laissez-faire economics promotes minimal government intervention in market activities.
Adam Smith's idea of the "invisible hand" suggests markets regulate themselves without government aid.
Reagan-era policies are examples of laissez-faire, showing both economic growth and societal challenges.

One of the most important factors in a country's economic health, well-being, and even culture is its economic system.

The choice of economic system affects regulations, entrepreneurship, freedom, and the ability to generate wealth. Within capitalism, there are a number of different approaches, and one of the better-known is laissez-faire.

Loading paragraph...

GettyImages-1292531161 — Image source: Getty Images.

Loading image...

Loading paragraph...

Herfindahl-Hirschman Index

A measure of market concentration, indicating how competitive or monopolistic an industry is based on firm market share distribution.

Loading definition...

Loading paragraph...

What Is Conscious Capitalism? A Guide to Purpose-Driven Business

Making money can come with a conscience. These companies are doing well while doing good.

Best Stocks to Buy Now: Our Buy-and-Hold Picks for May 2026

Get a list of the best companies to buy and hold for the long haul.

8 Best Bear Market Stocks to Buy in 2026

Learn about the best stocks to buy during a bear market.

How to Invest in Stocks: 7 Steps to Get Started

Are you ready to jump into the stock market? We've got you. Build long-term wealth using The Motley Fool's market-beating method.

Loading hub_pages...

Loading paragraph...

About the Author

Jeremy Bowman has been a contributing Motley Fool stock market analyst, covering technology, consumer goods, and macroeconomic trends since 2011. Before The Motley Fool, Jeremy was a newspaper reporter, restaurant manager, and English teacher abroad. He holds a bachelor’s degree in English from Colorado College and a master’s degree in business administration from American University. One of his Motley Fool headlines was briefly featured on Late Night with Stephen Colbert.

TMFHobo

@TMFBowman

The Motley Fool has a disclosure policy.