What is 'Laissez-Faire'. Laissez-faire is an economic theory that became popular in the 18th century. The driving principle behind laissez-faire, a French term that translates as leave alone (literally, let you do), is that the less the government is involved in the economy, the better off business will be â and by extension, society as a whole. Laissez-faire economics are a key part of free market capitalism.