Introduction

Almost 100 years after its theoretical endorsement by Adam Smith, laissez-faire,1

as a form of economic management, was adopted by the British Government for a short period. A further century on, laissez-faire was again popularized by leading neo-classical economists with the aim of improving the economic efficiency of Anglo-American countries following the perceived failure of Keynesian-inspired economic policies. Yet each approach contains compromise. The pure model ostensibly proposed by Smith was not pure; it contained a distinctive role for government as we shall see. Furthermore, the goal of efficiency has become muddied as time has passed. This study adopts a largely qualitative approach consisting primarily of a historical analysis of the literature which, in terms of management practice, defines economic efficiency in imprecise and descriptive terms.