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Regarding Tom Walker's comments that: 
  
> 2. The over-production of some specific commodities COULD lead  
> to their prices falling, but it also could lead to any number of other  
> events occuring -- from soaking oranges in creosote to financial  
> bubbles to government bailouts and thousands of other  
> possibilities. The price WOULD fall to market clearing level with  
> perfectly competitive markets, perfect information and all those  
> other perfections that could no more exist than could "general" over- 
> production (see point 1).   
> 
 
I know of no classical economist who invokes the assumptions of  
"perfectly competitive markets, perfect information ...," certainly not  
Adam Smith, Robert Malthus, David Ricardo, J.-B. Say, or J.S.  
Mill.  I have found Tom's allusion in Keynes's GT, e.g., pp. 222, 277- 
78, where Keynes uses A.C. Pigou as a straw man for the claim,  
and which I point out to be incorrect (see Southern Economic  
Journal, July 1997, esp. 65-66).  Talking about markets operating  
under conditions of "perfect liberty" or competition being "perfectly  
free" does not mean the same thing we moderns do under "perfect  
competition."   
 
The modern "perfect competition" model may be properly attributed  
to Frank Knight, as George Stigler has explained.  Say's Law,  
which addresses the adjustment of market prices, quantities  
supplied and demanded, and interest rates, following the  
miscalculations of producers in estimating the demand for their  
commodities, has no use for that model.   
 
James Ahiakpor  
California State University, Hayward 
  
 
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