Question

What were the effects of laissez-faire capitalism?

Answer 1

Effects of laissez-faire capitalism:

• Laissez-faire capitalism allows companies to compete freely with each other in an open marketplace.

• Without costs of government regulation, businesses can grow faster.

• This leads to price increases for the consumer and the lack of diversification in the marketplace.

• Without restrictions from the government, there is more incentive for innovation, and technological advances can take place.

• This can result in a large wealth gap in a society with a few very rich people in control of the majority of the economy's wealth.

• Capitalism (or laissez faire) feeds and clothes and houses more people at higher levels than any other system.

• Workers have more rights, and have a comfortable work environment.

• Lots of government involvement and regulation raises cost and slows growth.