Adam Smith Vs Laissez Faire Study

To leave the markets alone, the laissez-faire approach to economics was the catchphrase for Adam Smith and other Classical economists. This approach lent its power to the “invisible hand” of the market and the idea that adjusting the way the market works would ultimately affect its ability to function properly. Smith believed the market was a “perfectly ordered mechanism operating according to natural laws.” This was a misguided idea, when the market is left to make its own decisions without restraint, they are not likely to make everyone better off like Smith thought (Canterbery 39-45).
The Industrial Revolution brought quick growth and dissolved Adam Smith 's vision for his perfectly ordered, harmonious economics. Smith himself, witnessed employers keeping their workers on subsistence wages to control them. If many companies did this in one area the workers would not be able to go to another employer to find better pay. The workers could afford the basics of survival in their current jobs, but could not negotiate their wages, nor could they strike (Canterbery 57-58). If they did, they and their family would risk starving to death. As factories began to employ the masses, the common people were left further behind as the gap between employee wages and company revenue was widening. The gap between revenue and expenses …show more content…
In some cases, employers will conspire to hold their employees ' wages down to increase their own profit. Monopolies will work to keep their monopoly by stifling competitors and generally harming consumers. Many private companies would not exist with a lack of skilled workers. The infrastructure created by governments is essential to the workings of an economy and its private industries. This brings to the forefront the saying laissez-faire, which cannot work in the real world and must be actively opposed, in order to create a healthier