LAISSEZ FAIRE—LAISSEZ PASSER
These two formulas, which are frequently met with in economic, political, social and socialistic discussions, were invented by the physiocrates. By laissez faire they mean simply let work, and by laissez passer, allow exchange; in other words, the physiocrates demand, by these phrases, the liberty of labor, and the liberty of commerce.
—These two phrases have never been used by economists in any other sense; but the partisans of interference of all forms—socialists, protectionists, administrationists and interventionists—have often pretended to believe that they were the expression of the liberty to do everything, not only in political economy, but in morals, in politics and in religion. Jabard made this same assertion, about half a century ago, in the numerous pamphlets which he published, and even went so far as to assert that by laissez faire and laissez passer economists understood "unrestrained depredation." To repeat such an interpretation is sufficient refutation for any serious, thinking man who does not close his eyes in order that he may not see, and stop up his ears that he may not hear. Economists do not apply their axiom to morals, politics or religion, which subjects they do not consider at all as economists, but only inasmuch as they relate to human activity and human industry; they do not pretend that men should be allowed to do everything, and that everything should be allowed to pass, but simply that men should be allowed to work and to exchange the fruits of their labor without hindrance and without being subjected to preventive measures, under the protection of laws repressing attempts against the property and labor of another.
—Dupont de Nemours thus relates the origin of these formulas in his preface to Turgot's "Eulogy of de Gournay": "M. de Gournay, who was the son of a merchant and had long been actively engaged in commercial pursuits himself, had recognized that manufactures and commerce could be made to flourish only by liberty and competition. They discourage rash enterprises, and induce reasonable speculation; they prevent monopolies, restrict the private gains of merchants for the benefit of commerce, quicken industry, simplify machinery, diminish the burdensome expense of transportation and storage, and lower the rate of interest. They secure the highest possible price for the products of the earth, for the benefit of the producer, and the sale of these products at the lowest possible price, for the benefit of the consumers, for their satisfaction and enjoyment. He concluded from these observations that commerce should never be submitted to any tax or interference, and drew from them this axiom: laissez faire, laissez passer."
—But it seems that this axiom was inspired by a reply made a long time before to Colbert when inquiring about measures favorable to the interests of commerce, the justice of which had impressed itself upon the friends and disciples of Quesnay. "It is well known," says Turgot, in his "Eulogy of de Gournay" already quoted, "what the reply of Legendre to Colbert was: Laissez nous faire, (Let us alone), to which Quesnay added, somewhat later: "Do not govern too much."
laissez-faire ( lĕs'ā fâr' ) [ Fr. = leave alone ]
In economics and politics, doctrine that an economic system functions best when there is no interference by government. It is based on the belief that the natural economic order tends, when undisturbed by artificial stimulus or regulation, to secure the maximum well-being for the individual and therefore for the community as a whole.
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Vincent de Gournay [ vaNsAN´ du gOOrnA´]
1712–59, French economist, precursor of the Physiocrats and of Adam Smith. A wealthy merchant, he was in government service as intendant of commerce from 1751 to 1758.
He translated and annotated the chief work of Josiah Child (see under Child, Sir John) and gathered around him a group of men interested in reforming the economy of France and in abolishing trade restrictions.
His favorite phrase was "Laissez faire, laissez passer," and he is generally credited with being its originator. Unlike the Physiocrats, he regarded industry and commerce as well as agriculture to be important sources of wealth.
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The physiocrat Marquis de Gournay is usually credited with originating the term "laissez -faire, laissez passer," but A.R.G. Turgot's Eloge de Gournay attributes that term to Le Gendre, an anti-Colbert merchant of France, who spoke the phrase "laissez-nous faire" while speaking out against the Colbertization of industry. Boisguillebert is also said to have used the term before Gournay.
[From The Physiocrats by Henry Higgs, 1897.]
Colbertism was an extreme form of Mercantilism built around war financing schemes, high taxation, and central planning.
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