Laissez-faire, meaning “letting go” in French, generally refers to the notion that less government is better than more. Ignoring from the outset that all open marketplaces usually require the same amount of governance, as the participants are generally the same. As such let me answer the question of who governs best in what situation.
The letting-go by the government, as insinuated by the question, can only responsibly occur, and not turn into chaos and mistrust, with the establishment of modern principles applied to free-market constructs. Principles our old constructs of economics have failed to establish.
In short, the establishment of paradoxical rules of freedom defined in a preemptive playbook must be designed to serve to 1) protect collective freedom amidst 2) the maximization of individual liberties. Free-markets only approach a reliable proxy of freedom when a vile-maxim of personal interests does not damage our collective interests.
Laissez-faire has generally been implemented as simplistic and error-prone absolutism, with little or no interference by government, and in the context of such supposes the private sector will establish its independent governance to protect collective freedoms. Reality is that the past has demonstrated a private sector run “free,” and remunerated by the chase for short-term quarterly earnings, yields rather grandiose ignorance to the protection of the collective interests of long. And thus laissez-faire has yielded an erosion of the trust in the marketplace to which the methodology is applied.
A clear example of the malfeasance of laissez-faire implementations is the creation of a tobacco industry, which produced great short-term wealth for a few. With insufficient self-governance by the private sector of smoking’s devastating consequences, now has become the third leading cause of death (in the U.S.) some thirty years later. The reigning in of laissez-faire deployed too late to stave off our currently unsustainable medical insurance premiums, now severely damaging the health of our collective interests. There are many other examples.
Reality is, we in the U.S. have not deployed free-market systems at all, for we have never deployed freedom’s paradox, nor have we deployed freedom as a relativity theory that can encompass the world. Instead, we have implemented freedom as one-dimensional absolutism void of the protection of (even our own) collective freedoms.
Rights and obligations
So, to expect to benefit from the reduction of government interference from laissez-faire, we must begin to treat freedom as relativity theory, to mimic more accurately the aspirations and inspirations of the world’s diverse ingenuity and capacity, and implement its paradox as the preemptive playbook to stave off infractions to damage collective interests. The theory of the playbook of a free-market, guided by its paradox, deciding what can be discovered, to use Albert Einstein’s wisdom.
Only when we respect and endorse a plurality of freedom, its principles balanced by its matching and transparent paradox, can we expect the participants (not government) to successfully apply most of the arbitrage of the marketplace in question, and thereby induce the renewability of self-governance to maximize the trust, health and longevity of its participants.