“The End of Laissez-Faire”

“The End of Laissez Faire” by John Maynard Keynes, first given as a 1924 lecture and later published in the 1931 Essays in Persuasion, represents a leading example of his work aimed at influencing opinions of individuals and policymakers as they made decisions about economics issues during the interwar period. Initially, this chapter summarizes “The End of Laissez Faire”: the first three sections utilized a history of ideas analysis to explain the predisposition toward laissez faire and the implications of that bias, and the final section offered policy recommendations for an economy in which Keynes argued that laissez faire was no longer relevant. Next the chapter reviews reactions to Keynes’s ideas. It concludes with an assessment of the importance of “The End of Laissez Faire,” including its role in helping Keynes to escape the special case of classical economics and in developing a “middle way” for economic policy.