Keynes, Say's Law, and Monetary Theory

["Gunnar Tomasson" <tomasson@xxxxxxxx>]

The following is my response of today's date to a question raised with
respect to Say's Law:

> It is not for lack of trying that, after 50-60 years of concentrated
effort,
> neither Samuelson nor Tobin have made it to first base insofar as
> formulating what the former termed "operationally meaningful theorems."
>
> In all SCIENCE, an "operationally meaningful theorem" is one that can IN
> PRINCIPLE be refuted, "if only under ideal conditions," as Samuelson wrote
> with respect to any such theorem that MIGHT be determined to exist in the
> field of theoretical economics.
>
> So far, Say's Law is the ONLY "operationally meaningful theorem" that has
> been formulated in economics.
>
> As an "apparatus of the mind," it served classical economists of first
rank
> as IMPLICIT point of departure for ANALYTICAL reasoning with respect to
> things on which Keynes lectured at Cambridge in the early 1930s under the
> title 'The Monetary Theory Of Production'.
>
> Of subsequent developments in monetary theory, Charles Goodhart wrote in a
> Financial Times article in the 1980s that, in his view, the then-current
> state of monetary theory was "less satisfactory" that that to which Keynes
> and Robertson had advanced it by the early 1930s.
>
> In other words, while thousands of would-be monetary theorists have been
> trying to out-perform Keynes and Robertson by using something OTHER than
> Say's Law as their point of departure, Goodhart judged all their efforts
to
> have been for nought.
>
> So here is the closest thing we are likely to have insofar as an
> "operationally meaningful" proposition with respect thereto is concerned:
>
> The relationships between (a) the Supply and Sale of Factor Services, (b)
> Entrepreneurial Production, and (c) the Supply and Sale of Final Output
that
> comprise Say's Law give would-be monetary theorists a point of departure
> that has PROVED superior to any and all alternatives thereto proposed and
> tested during the past seventy years.
>
> Gunnar