ShmoopTube

00:00

Finance a la shmoop what is laissez faire? alright well you know the

00:07

Renaissance Fair you know about playing fair and what about with laissez faire?

00:15

French term for more or less a Beatles [Beatles band singing]

00:19

song yeah let it be well as it applies to economics let it be means that the

00:23

economy is smarter than we are or at least a better arbiter of what works

00:28

what doesn't and what is fair ish so the ideology of laissez faire argues that

00:34

economic forces should be allowed to work themselves with maximum freedom and

00:39

minimal government interference part of the logic is purely economic government [Stash of cash appears]

00:43

involvement is friction bureaucrats who insert their noses only serve to hit the [Car driving uphill and approaches woman with stop sign]

00:49

brakes on the economy and make transactions more expensive by applying

00:53

taxes, ever been to the DMV and you know gotten the angry stare from the woman

00:59

whose Facebook page updating you just interrupted while hoping to get your [Dog on a leash appears]

01:02

license renewed yeah that's big government at work friction tax dollars

01:07

being spent to employ that woman instead of just figuring out a website that'll

01:12

let you go do it all on your own for about one millionth of the cost but part

01:16

of the argument of laissez faire is ethical, laissez faire advocates argue that

01:21

government interference distorts the natural and equitable forces of economic

01:26

development like think global warming for economics courtesy of our carbon [Earth heating up]

01:32

pollution otherwise known as regulatory friction slowing down the natural forces

01:36

of the commercial markets well in the heyday of laissez faire economics in

01:40

the last decades of the 19th century you really could buy happiness money was

01:45

pretty much everything government could be bought and it was kind of not a real

01:50

force without money behind it right kill someone well, you pay a fine of 199.95

01:55

kind of the way you know mexico works today

01:58

so what's fair about laissez faire? is it fair to have no minimum wage well laissez faire [Scribbles appear on graph of federal minimum wage]

02:05

would say yes but john steinbeck you know The Grapes of Wrath guy yeah he

02:09

would say no no and a half the logic is that human being

02:13

needing to eat will do pretty much anything to feed their kids right and [Man using shovel]

02:17

can't blame them will they work for just five bucks an hour to pay for that last

02:21

meal and probably a dollar an hour if it'll feed their last kid yeah you bet

02:27

fair well maybe among cave people but not today [Cave people by a fire]

02:31

but then there are other perspectives to consider like is it fair to have child

02:34

labor laws? if kids want to earn money cobbling shoes or making straw hats or

02:40

working 16-hour days in a stock brokerage or at shmoop...

02:45

shouldn't they be allowed to do so what do you think fair

02:48

not fair laissez faire yeah we don't know for sure what do you think? [People in shmoop boardroom]

Full Transcript