Re: The Enterprise and its Market

[David MacInnes <macinnes@xxxxxxxxxxx>]

Bob Gannaway

The problem with Say's law, as Keynes pointed out more eloquently than I, is
that it assumes there is only one type of planned expenditure. One of Keynes'
most important innovations in economic theory was to point out that planned
expenditures, or what he called aggregate demand, can be divided into two
categories; that is, planned expenditures that depend on current income (D1),
and planned expenditures that do not depend on current income (D2). If output
increases, there is no mechanism in a capitalist economy, short of government
intervention, to insure that D2 will increase in the same proportion.
Therefore, Say's Law does not hold.

It is hoped that this list remains tolerant of those who do not understand the
fundamentals, and wish to learn them, so it can keep the PK school alive, and,
hopefully, growing. I have learned much here and hope others can share in this
experience.

David MacInnes

Bob Gannaway wrote:

> Paul Davidson
>
> Yes, Say said it. I hope that doesn't mean it's not true. I hadn't heard of
> M. Say for so long I thought he had "died". Anyway my object is to learn
> whether his law or my version is wrong and if so what is the factual or
> logical error. Also to point out the bearing it has (if true) on what the
> capitalists are doing as they try to reduce payrolls, to zero if possible.
>
> Bob Gannaway