What is Laissez Faire?

Definition: Laissez faire is a term that means “allow to do”. In other words, it means to allow some room for non-strictly-supervised activities.

What Does Laissez Faire Mean?

The term was first coined in France and it means “allow to do” or “leave it be”. The idea behind this term is mostly applied to the field of economics. It is one of the principles that support the free market system and theory. This concept was mostly supported by Jean-Baptiste Colbert and Dr. Francois Quesnay and it backs the idea that the market works more efficiently when the government leaves some room to market participants to interact between each other without strict supervision.

This idea was also backed by Adam Smith, the father of classical economics. He stated that the market was able to self-regulate through supply and demand interactions and he recommended low government participation to increase productivity and economic development. The concept of laissez faire can also be applied to leadership. In this case, by allowing individuals to have some freedom to act and make decisions, this principle predicts a better outcome than if the leader micro-manages strictly each of the activities being performed.

Here’s an illustration.


Mr. Pratt is the head of the Financial Department at a big tobacco company. He has five employees working for him, performing different finance-related activities. Right now, the department has to develop an internal control’s system to reduce the risk of negligence and losses. Mr. Pratt wants to approach this task creatively and he needs his team to help him develop all the policies and procedures. How could the concept of laissez faire help him obtain the best outcome from this situation?

As we previously discussed, laissez faire means “allow to do”, which means to give some room for things to happen. According to this definition, Mr. Pratt should divide individual and group tasks to his workers and let them interact between each other to come up with the bests solutions for this particular assignment.