Which economic theory holds that government should not regulate or interfere with commerce?

• A. Laissez-faire
• B. Government by proxy
• C. Iron triangle
• D. Issue network

Answer: (A)

Laissez-faire is the economic theory that government should not regulate or interfere with commerce. It argues that markets work best when left to their own devices, with prices and production determined by supply and demand. Proponents believe that minimal government intervention leads to more efficient outcomes, encouraging competition, innovation, and growth. The government’s role, if any, should be limited to maintaining order, enforcing contracts, protecting property rights, and providing a stable framework for the economy—not micromanaging business activity or shaping economic rules.

The other terms describe how policy is formed or implemented rather than a guiding principle about economic regulation. Government by proxy refers to outsourcing government functions to private actors; an iron triangle describes a stable coalition among Congress, the bureaucracy, and interest groups that can influence policy; and issue networks are broader, more fluid groups of people who participate in policy debates. None of these capture the idea of keeping government out of economic regulation in favor of free markets, which is the essence of laissez-faire.