Laissez faire can be best described as a political theory that embracing the idea that ‘the best governments are the governments that govern the least,” while also preventing the union from evolving into a state of anarchy and chaos. The United States and other global economic powers, have historically taken a “hands-off” approach towards their economic policies, in order to allow their economies to flourish on their own. On the contrary, when governments tend to heavily regulate business and trade, their economies experience a recession (or at times, even a depression). The fundamental principles of laissez faire were in some instances, disregarded, and at other times advocated by the United States Federal Government, particularly in economic topics such as railroad land grants, anti-trust laws, and the regulation of the nation’s interstate commerce.
The railroad land grants that were issued by (or on behalf) of the federal government, encouraged the idea of laissez faire, as the government dispersed tax money throughout the 1800s. Eventually, those indebted to the federal government began to repay their debts, and the nation’s debt slowly began to diminish. Land grants were also awarded to railroad companies that were willing to build railroads in uninhabited areas that were not otherwise economically luring. ) Rather than the government constructing nationalized railroads, they provided economic incentives for railroad companies to build in specific areas, such incentives include: federal subsidies, land grants, and cash grants. The government did what was best for the people of the United States people: rather than nationalize the railroad system and diminish any economic growth that the area may have experienced as a result of the privatization of the railroads. Such a decision by the national government certainly embraces the idea of laissez faire, as although the railroad companies that took advantage of the economic incentives benefited, so did the rest of the American people.
The role of laissez faire in the federal government’s control of interstate commerce was seen in both the form of fostering and of dismissal. The government, to their own dismay, failed to have the foresight that by encouraging a limited number of railroad corporations to take advantage of their economic incentives, that corporate monopolies would soon be present. Monopolies did not, however, completely hinder the American people, as they provided employment opportunities and supplies to those who would otherwise, be without. Even despite this positive attribute, monopolies on interstate trade and railroads were largely unsuccessful in allowing the nation to progress both economically and socially. The government at this time, however, did not make economic policies that were in the best interest of the American people, as small businesses and individuals were exploited by such an abuse of power. Instead, the railroad companies were in the best interest of American politicians and government officials, as individuals gained power due to the tremendous economic gains that these monopolies accrued. While the government had achieved more political and economic power, their constituents overwhelmingly unsatisfied in their role(s) in interstate commerce.
Ultimately, these constituents were somewhat successful, as their constant pressure on their representatives led Congress to finally decide to pass legislation that would regulate monopolies and interstate trade. This piece of legislation, known as the Interstate Commerce Act, ironically took even more independence from their citizens. The government no longer felt that it was its duty to intervene and protect its citizens’ rights, and this resulted in further economic and social abuses by “big businesses”. The government however, was not solely to blame for such abuses, as the American people made accusations toward the government’s intentions, which caused them to lose credibility.
Laissez faire
Though the government tried to pass legislation that would regulate trusts and other economic abuses, by setting rigid regulations about anti-trusts, the government essentially gained political power over the nation’s commerce. The Sherman Antitrust Act was abused frequently throughout the late 1800s, and seldom was the legislation used properly.
The principles and theory of laissez faire were routinely disregarded by the federal government, as the government attempted to elevate its own power, rather than protect its citizens. The government breached its own limitations and boundaries as it passed legislation such as the Interstate Commerce and Sherman Antitrust Acts. Largely, the government looked out for its own interest, and did what it felt was the best decision for the country, rather than the will of the American people. was routinely disregarded in the government’s anti-trust legislation and regulations. The government can now intervene against what it deems as “unfair economic competition”, thus leading to further abuse by government officials. Legislation known as the Sherman Antitrust Act, allowed the government to close any businesses who had abused their power over their competition. When the government decided to pass such legislation, laissez faire was violated, despite their intentions being good.
