Economic Thought and Policy

Abstract

Though many economists and statesmen of the early and mid-nineteenth century hankered after a pure laissez-faire economy, all were forced to admit that this was an ideal which was neither practical nor wholly desirable. Not only was the state patently committed to defend and police itself, there were certain obvious defects in the organization of nineteenth-century industrial society which cried out for some kind of state intervention. John Stuart Mill (1806–73) was well aware of the conflict of aims involved. His solution to the problem was to insist on freedom from state interference as a position from which he would only depart with reluctance. He then proceeded to enumerate the directions in which he admitted (reluctantly) the necessity of state intervention. The inroads into his original principle that these exceptions involved merely served to emphasize the incompatibility of theory and practice in this field.