Recently I finished and essay for school that was due about a month ago, but thanks to the sad state of American High Schools these days I can turn it in late.
I was assigned to discuss the concepts of Laissez-Faire and Capitalism.
According to Wikipedia (don't bother telling me Wikipedia is a bad source; it's as good as anything you can find on the internet), Laissez-Faire means "let [them] do," but broadly it implies, "let it be," "let them do as they will," or "leave it alone." Meaning less government regulation and more private decision making. It works because a relatively small group of government bureaucrats in Washington don't know as much about the complicated facets of the various professions as the professionals who specialize in those professions do.
It's really pretty arrogant and thoughtless of government officials, or those who would prefer a command economy, to believe that government bureaucrats know how to run your business better than you do.
Which leads into Capitalism. Capitalism means that private citizens own the means of production. These private citizens employ those means to create a profit. Of course there is competition and in order to defeat the competition, your company has to be better than the other company. How do you make it better? You innovate, you come up with new methods and new technologies that give your company an edge. But it doesn't stop there, the other company isn't out of business yet so he not only adapts your innovations (if he can), he also discovers further innovations to help him defeat your company. They cycle goes on and on driving the bar ever higher. The company and all of its employees innovate because they want more money. Call it greed or call it the profit motive, same difference. Capitalism and Laissez-Faire harness greed, a desire commonly considered bad, to raise society to ever loftier heights. The profit motive and its connection to innovation is one of multiple reasons why excessively taxing the rich is a bad idea. If the government takes half your profits, would you go to the same lengths to get new profits?
The connection between Capitalism and innovation is one of the reasons why the Soviets had to copy large quantities of their technology from the West, with an economy without competition and private profit motive there was no innovation.