While Mill carefully delineated cases where expediency could justify departing from laisser-faire, he was unequivocal in his condemnation of government actions based on false economic theories. These interventions, cataloged in Book V, Chapter X, represent cases where interference is not merely a questionable exception, but a positively harmful and “mischievous” act. These interventions stand in stark contrast to the principled exceptions outlined earlier; whereas those address market or social failures, these are based on flawed economic premises that actively create inefficiency and harm.

First and foremost, Mill refutes the Doctrine of Protection to Native Industry. He argues that prohibiting imports to favor domestic producers is to “render the labour and capital of the country less efficient in production than they would otherwise be.” If a commodity can be imported more cheaply, a protective tariff forces a waste of national resources. The result is a “sheer loss, to the country as well as to the consumer.”

Next, Mill summarizes the case against Usury Laws, which fix a maximum legal rate of interest. Such laws, intended to protect borrowers, have the perverse effect of increasing their costs by driving them to disreputable lenders who charge for the extra risk. Furthermore, he finds these laws “demoralizing,” as they reward a borrower for breaking a contract by allowing the annulment of the debt, thereby using the law to sanction bad faith.

Finally, Mill opposes government attempts to fix or moderate the price of food, especially during times of scarcity. He argues that in a real scarcity, the price must rise to reduce consumption. If the government artificially holds the price down, it does not increase the available supply. The only result is that the existing supply is bought up more quickly, with the government’s intervention serving only to “enrich the corn-dealers, the very reverse of what is desired.”

These erroneous interventions, grounded in prejudice rather than sound political economy, stand as a clear warning against the dangers of misapplied government power.