Question

c) Explain ONE way in which the adoption of laissez-faire economic policies led to an increase in the share of global manufacturing for states in Europe and North America.

Answer 1

Answer:

Laissez faire economics advocates for less government regulation and intervention. Extreme laissez faire views dislike all types of taxes and controls.  Of course something like that will never happen, but different economic policies favor certain laissez faire views.

For example, during the 1800s, many politicians believed that business owners were entitled to exploit their workers in order to make higher profits. As a result of these types of policies, 14 or 16 hour long labor days were common, no safety regulations existed, and the wages were not high. Since governments didn't regulate labor markets, businesses were able to benefit form this and increase total production.

Answer 2

The adaptation of laissez-faire policy proved to be beneficial for North America and Europe as there was a significant increase in demand and supplies due to presence of free market.

Free market is one of the most apt form of market for any region as there is not much price differentiation and the demand for the product becomes perfectly elastic.

Laissez-faire policy

• The laissez-faire policy also refers to as a free market where there are no barriers to the entry of maximum number of buyers and sellers and is completely a determinant of price.

• North America and Europe adopted free market concepts after the emergence of the Industrial Revolution, and the growth of the economy was significantly high.

• The growth was more as there was curbing of monopoly and hence the prices were competitive as higher prices by a seller will lead to lower demand for such product.

Hence, the adoption of laissez-faire policy helped North America and Europe by increasing the growth of the regions due to increased demand from competitive markets.

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