2. The End of Laissez-faire (1926)

Let us clear from the ground the meta-physical or general principles upon which, fromtime to time, laissez-faire has been founded.It is not true that individuals possess a pre-scriptive “natural liberty” in their economicactivities. There is no “compact” conferringperpetual rights on those who Have or on thosewho Acquire. The world is not so governedfrom above that private and social interestalways coincide. It is not so managed herebelow that in practice they coincide. It is not acorrect deduction from the Principles of Eco-nomics that enlightened self-interest alwaysoperates in the public interest. Nor is it truethat self-interest generally is enlightened; moreoften individuals acting separately to promotetheir own ends are too ignorant or too weak toattain even these. Experience does not showthat individuals, when they make up a socialunit, are always less clear-sighted than whenthey act separately.

We cannot, therefore, settle on abstractgrounds, but must handle on its merits in detail,what Burke termed “one of the finest problemsin legislation, namely, to determine what the

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