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J. Barkley Rosser has raised two points in regard to Say's Law which he has 
asked me to comment on. He wrote: 
 
'Is it not the case that [John Stuart Mill] identifies his father as 
linking 
this view to Say, even if he did not actually call it "Say's Law"?' 
 
'BTW, I think this point has been made on this list before, but I would 
note 
that Say himself did not fully accept his own "law" and discussed 
exceptions 
to it.' 
 
 
These are, in my view, related questions. John Stuart Mill did  
indeed indicate that his father may have been the author of the 'law  
of markets'. In the Principles, at the end of the chapter specifically  
dealing with Say's Law, the chapter titled "Of Excess of Supply",  
he wrote:   
 
'It is but justice to two eminent names to call attention to the fact,  
that the merit of having placed this most important point in its true  
light belongs principally, on the Continent, to the judicious J.B.  
Say, and in this country to Mr. [James] Mill.' (John Stuart Mill,  
Principles of Political Economy, Book III, Chapter 14, Section 4 -  
page 562 of the Ashley edition.)   
 
This statement is found in all editions of the Principles. 
 
I have little doubt that the formulation of Say's Law was actually  
made by James Mill because only he was answering the right  
question. Say had constructed an apparatus which would later be  
used by the elder Mill, but Say's intent was to demonstrate that  
scarcity of money is not a cause of recession. It was James Mill  
who first dealt directly with the question of whether demand  
deficiency is a sensible explanation for recessions and  
unemployment, and it was he who trained his guns on showing  
how illogical such a notion actually is.   
 
Although in early classical writings the words 'demand deficiency'  
were often used, ultimately 'overproduction' became the way it was  
almost invariably described. Nevertheless, whichever way it was  
stated, the question addressed was whether supply could outrun  
demand. This possibility was rejected absolutely by the entire  
mainstream of the economics profession right up until 1936, and it  
was this which constituted the central conclusion of the law of  
markets.   
 
But I digress. Say himself did seem to have a shaky hold on the  
proposition which bears his name and his conception of the  
underlying processes were eventually superseded by James Mill's  
version. There is fascinating correspondence between Malthus and  
Ricardo in which both poke fun at the way in which Say defends  
his own theory. I think they were a little harsh, and for the most  
part I do think Say had the basic ideas pretty clear in his mind. But  
I also think that while Say may have stated the underlying  
propositions first, he ended up by following James Mill.   
 
In the 1814 second edition of his Treatise Say rewrote, in its  
entirety, his chapter on the thiorie des dibouchis to make it  
conform as best he could to the arguments found in James Mill's  
Commerce Defended (1807). But even then he sometimes went too  
far under what Schumpeter described as 'polemical stress', making  
Say a very imperfect guide to Say's Law.   
 
I might also just note that the arguments surrounding the law of  
markets had nothing to do with the wages fund or any other early  
classical doctrine. It successfully bridged the divide during the  
marginal revolution. Jevons himself, in his Theory of Political  
Economy, was quite clear that overproduction was 'absurd and self- 
contradictory' and demonstrated exactly that using his own  
marginalist tools. All this is found in a brief section titled simply  
'Over-production' (page 212 of the Penguin edition).   
 
That Say's Law did not survive the Keynesian Revolution is  
because it was not intended to. That is what the Keynesian  
Revolution was about.   
 
Steven Kates 
 
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