From Practical Economics
Adam Smith is remembered for promoting the concept of laissez faire. This is a French term used when describing government actions over a market economy. Laissez faire literally is defined as "let do" but its applied meaning is 'let (it) be" or take a hands-off approach and allow the market economy to function without government interference in its industry or business.
This pure form of capitalism is the most beneficial because the free flow of economic decisions creates the greatest degree of efficiency. Anything that interferes with freedom in economic affairs, like the government commanding the economy, will retard the system overall and inhibit growth.
Some will argue the U.S. economy functions under laissez faire principles but Walter Williams, the John M. Olin Distinguished Professor of Economics at George Mason University points out, "There are 15 cabinet departments, nine of which control various aspects of the U.S. economy. They are the Departments of: Transportation, Housing and Urban Development, Health and Human Services, Education, Energy, Labor, Agriculture, Commerce, and Interior. In addition, there is the alphabet soup cluster of federal agencies such as: the IRS, the FRB and FDIC, the EPA, FDA, SEC, CFTC, NLRB, FTC, FCC, FERC, FEMA, FAA, CAA, INS, OHSA, CPSC, NHTSA, EEOC, BATF, DEA, NIH, and NASA."
This alphabet soup of government involvement in the American economy would make Adam Smith‘s head spin like a top as he rolls over in his grave. The important role of government in the economy will be discussed in chapter 19, but the idea that free markets need to actually function free of outside mandates and commands should seem painfully obvious at this point