Friday, February 09, 2007

Love's in the Air

As we approach Valentine's day on Feb 14th, love is already in the air! The economic term for this -and I am stretching the concept- is laissez-faire. To prove it, if you google "love and economics" -and I am not saying that I did!- you will get a result related to the subject.

The term laissez-faire is French -which explains the connection with love- meaning essentially: let it be. This is synonymous with free market. A laissez-faire policy argues for minimal government intervention in the economy. Just like love, an economic system is better served when it is left on its own without restrictions or restrains, it is argued.

If the overriding objective of a well functioning economic system is to create wealth for a nation, then it is better left to Adam Smith's invisible hand. When people are left on their own to pursue their own economic interest, the overall economic objective will be achieved. This is the theory in its pure form. Now some intervention may be necessary to correct market imbalances; however capitalism and free markets remain the best existing system. So after all love and economics agree.. just let it be..

PS: As an after thought, I attended a lecture by Alaa Aswani the author of Yaqobian Building which is a best selling international novel. He explained how he carefully composes the characters of his novel, but half way into it he loses control over them! He creates the characters then they take a life of their own.. Jokingly he said that he was pleased when two of the characters decided to get married and he congratulated them! I guess even in best selling work of fiction laissez-faire works its magic.

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