The end of laissez-faire: is there a class of decisions that no individual will make, so that the state must make them or they go unmade?

John Maynard Keynes, answered from the texts and cited to the page.

The position in brief

It is not true that individuals possess a prescriptive natural liberty in their economic activities, nor that self-interest generally operates for the common good.¹ The doctrine of laissez-faire was never deduced from the principles of economics; it arrived from elsewhere and was subsequently dressed in economic clothing. The state's proper Agenda are those decisions which no one will take if the state does not take them — and the Non-Agenda are everything else, which it should leave alone.²³⁴

Sources

1. It is not so managed here below that in practice they coincide. It is not a correct deduction from the Principles of Economics that enlightened self-interest always operates in the public interest. Nor is it true that self-interest generally is enlightened; more often individuals acting separately to promote their own ends are too ignorant or too weak to attain even these.

   The End of Laissez-Faire, pp. 40–41

2. His strong nervous force is at the opposite extreme of human nature from that nervous irresponsibility which conceives hasty Utopian schemes, and which is rather to be compared to the bold facility of a weak player, who will speedily solve the most difficult chess problem by taking on himself to move the black men as well as the white." THE END OF LAISSEZ-FAIRE This is a fine picture of the great Captain of…

   The End of Laissez-Faire, pp. 38–39

3. All these things I applaud. I criticise it because it misses the significance of what is actually happening; because it is, in fact, little better than a dusty survival of a plan to meet the problems of fifty years ago, based on a misunderstanding of what someone said a hundred years ago.

   The End of Laissez-Faire, pp. 46–47

4. Nineteenth-century State Socialism sprang from Bentham, free competition, etc., and is in some respects a clearer, in some respects a more muddled, version of just the same philosophy as underlies nineteenth-century individualism. Both equally laid all their stress on freedom, the one negatively to avoid limitations on existing freedom, the other positively to destroy natural or acquired monopolies.

   Persuasion, collected essays 1919-1931, pp. 277–278

Where the argument is made

• The End of Laissez-Faire (1926), delivered as the Sidney Ball Lecture at Oxford and published by the Hogarth Press
• A Tract on Monetary Reform (1923), ch. IV ("Alternative Aims in Monetary Policy") and ch. V ("Positive Suggestions for the Future Regulation of Money")
• The Economic Consequences of the Peace, ch. VII

How the argument was received

The founding statement of the twentieth-century mixed economy, and the position against which the Austrian and Chicago traditions defined themselves. Contested less on the diagnosis than on whether the Agenda can be bounded once admitted.