Re: Case solved, at last!

["J. Barkley Rosser, Jr." <rosserjb@xxxxxxx>]

Paul and Gunnar,
      Our library is closed so I cannot get at Say or at
a decent version of Mill.  It was Mill's father who
said "supply creates its own demand" and credited
Say with this, although one of James Mill's contemporaries
may have said that before him.  Certainly Mill, Jr. also
said it somewhere.
     The funny thing about Say, as I believe I have noted
before on this list, is that he recognized that his own
"law" is not always true.  There is a passage (I can
find it if the library is open) in which he gave the Ottoman
Empire as an example, where people hoard money
and wealth because of the the fear that the government
will arbitrariy seize it.   His basic message was laissez-
faire, with his law almost being normative.  Thus, "Say's
Law" would hold in l-f because people would not be
afraid of the government and thus would not hoard.
Barkley Rosser
----- Original Message -----
From: "Gunnar Tómasson" <gunnar.tomasson@xxxxxxxxxxx>
To: "pdavidso" <pdavidso@xxxxxxx>
Cc: <pkt@xxxxxxxxxxxxxxxx>
Sent: Monday, December 24, 2001 1:13 AM
Subject: Re: Case solved, at last!


> William J. Baumol reports that "Only the second edition of Say's 'Traité'
om
> 1814 describes explicitly the logic of Say's Law as we interpret it
> nowadays." ('Say's (at Least) Eight Laws, or What Say and James Mill
Really
> Have Meant', in Economica, 44, p. 147)
>
> Baumol then goes on to note the following:
>
> "The focal chapter's title, "Des Débouchés", is often translated as "on
> markets".  However, it should be borne in mind that the term "market" is
> used as in "making a market", to denote the availability of effective
> demand, not as an institution (such as a marketplace) that facilitates the
> process of exchange.  Perhaps a better translation of 'des débouchés' is
"on
> outlets for goods".  I begin with the propositions which are the main
> subject of the extremely brief chapter on 'débouchés'  in the first
edition
> of the 'Traité'.  These can be summarized as:
>
> "Say's 'First Proposition'.  A community's purchasing 'power' (effective
> demand) is limited by and is equal to its output, because production
> provides 'the means' by which outputs can be purchased.  Furthermore,
>
> "Say's 'Second Proposition'.  Expenditure increases when output rises.
>
> "Note that the first proposition deals with purchasing 'power', not with
> actual purchases.  It tells us, as Keynes did, that output is the source
of
> effective demand - that output is purchasing power..." (p. 147)
>
> In the context of recent exchanges about the 'source' of Entrepreneurial
> Profit - defined as excess of final sales proceeds over factor cost -
Say's
> 'First Proposition' would seem to accord with (a) Schumpeter's contention
> that the 'source' of such profits raises analytical issues which
remain[ed]
> to be addressed, and (b) my conclusion that, in the context of analytical
> economics, the 'source' MUST be 'final demand inflation' - defined as net
> injection of NEW nominal purchasing power into the market for final output
> relative to the factor cost of production ('A community's purchasing
'power'
> [that is] equal to its output.').
>
> Gunnar
>
>
> ----- Original Message -----
> From: "pdavidso" <pdavidso@xxxxxxx>
> To: "Gunnar Tómasson" <gunnar.tomasson@xxxxxxxxxxx>
> Cc: <pkt@xxxxxxxxxxxxxxxx>
> Sent: Sunday, December 23, 2001 11:19 PM
> Subject: RE: Case solved, at last!
>
>
> >===== Original Message From Gunnar Tómasson <gunnar.tomasson@xxxxxxxxxxx>
> =====
> >
> >In the General Theory, Keynes cited John Stuart Mill and Alfred Marshall
on
> the subject matter of Say's Law, inter alia, as follows.
> >
> >Mill:  "All sellers are inevitably, and by the meaning of the word,
> buyers."
> >
>
>
> CAN ANYONE GIVE ME THE CORRECT CITATION (BOOK, PUBLISHER DATE, ANY PERHAPS
> EVEN PAGE REFERENCE) FOR JOHN STUART MILL'S FORMULATION OF SAY'S LAW
>
> AND ALSO JOHN BAPTISTE SAY'S ORGINAL REFERENCE FOR HIS LAW??
>
> PAUL
>
> Paul Davidson
> Editor, Journal of Post Keynesian Economics
> University of Tennessee
> SMC 523
> Knoxville, Tennessee 37996-0550
> phone # (865)974-4221; fax #(561)737-8262;
> email pdavidson@xxxxxxx
> http://econ.bus.utk.edu/Davidson.html
>
>
>
>