Jean-Baptiste Say Did Not Believe In Say's Law (Barkley Rosser)
There has been a lot of discussion recently on the econoblogosphere and the History of Economics list about Say's Law, much of it quite heated. I just want to add one relatively minor point: Jean-Baptiste Say did not believe in Say's Law. To be more precise, while he made many statements that look like it, and I would say that he believed in it in the long run and maybe even the medium run, he was fully aware that it may not hold in the short run. He provided numerous examples of exceptions to it from historical cases, situations where for one reason or another citizens would hoard cash and not spend it. So, he was very aware that in the short run supply may not lead to an equal demand. A general glut may be possible, at least for awhile.
BTW, while his law regularly is invoked by those who deny any efficacious role for fiscal policy in macroeconomic stabilization, during the post-Napoleonic War economic slowdown and high unemployment, he in fact sided with Malthus rather than Ricardo and supported public works spending to, yep, you guessed it, help to those who had become unemployed as a result in the reduced military spending with the end of the war. Say was in fact quite practical about public policy and not just someone constantly reciting his own law to deny reasonable policy. But one rarely hears of this.
There has been a lot of discussion recently on the econoblogosphere and the History of Economics list about Say's Law, much of it quite heated. I just want to add one relatively minor point: Jean-Baptiste Say did not believe in Say's Law. To be more precise, while he made many statements that look like it, and I would say that he believed in it in the long run and maybe even the medium run, he was fully aware that it may not hold in the short run. He provided numerous examples of exceptions to it from historical cases, situations where for one reason or another citizens would hoard cash and not spend it. So, he was very aware that in the short run supply may not lead to an equal demand. A general glut may be possible, at least for awhile.
BTW, while his law regularly is invoked by those who deny any efficacious role for fiscal policy in macroeconomic stabilization, during the post-Napoleonic War economic slowdown and high unemployment, he in fact sided with Malthus rather than Ricardo and supported public works spending to, yep, you guessed it, help to those who had become unemployed as a result in the reduced military spending with the end of the war. Say was in fact quite practical about public policy and not just someone constantly reciting his own law to deny reasonable policy. But one rarely hears of this.
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