Steve Kates invoked Mill’s “demand for commodities is not demand for
labour”.  I find his argument quite intriguing:

1) Steve  seems to be quite clear that it was _Alfred Marshall_ and
not Keynes who made J.St. Mill's argument appear obsolete.
Then he goes on to argue:

2) Mill's  "words would have been the foundation for the most
insightful analysis and forecast for what would happen following the
introduction of the stimulus packages in 2009."

Is the argument now concerning 1) : it was the textbook success of
_Marshall_ and  _not_   the textbook success of Keynes which made
Mill's statement  obsolete?

Is the argument concerning 2): The neoclassical marginalist analysis
is totally wrong in view of the 2009 crisis?  Has neoclassical
analysis failed the falsification test in 2009?

My own view on this matter I have put recently thus:
see:
http://cje.oxfordjournals.org/content/early/2010/09/03/cje.beq027.full.pdf?
ijkey=6aIg4BWngJW5F0Y&keytype=ref

"But the reason why today such an ‘insight’ [like Mill's]  may
rightfully be considered as an ‘absurdity’ is
not the spread of ‘Keynesian perversity’ but the classical marginal
analysis itself. It is the
(neo-)classical theory of the firm that generates the indeed
fundamental relationship—in
total opposition to J. St. Mill’s allegedly ‘profound insight’—that
there is a necessary
connection between output demand meeting and being produced by firms
on the one hand
and employment by firms on the other hand. This is what the Footnote
[in the General Theory, pp. 55–6, n.2]  expresses and this is an
essential step in Keynes’ theory of employment."


re:
2011/8/21 Steve Kates <[log in to unmask]>:....<snip>
>I have been working on (for a
> paper I will deliver to the UK HET next month) is Mill’s “demand for
> commodities is not demand for labour”. No one any longer understands
> what Mill meant and it is clear from the evidence that amongst those who
> could make neither head nor tail of it was Alfred Marshall. My argument
> is that the intervention of the marginalist revolution had made it near
> impossible for a mainstream economist to understand Mill, even though as
> recently as 1876, Leslie Stephen had described Mill’s proposition as
> “the best test of a sound economist”.
>
> But it is not just the mainstream who have this problem since it is not
> just the winners who write the history. Sometimes the ones who lost out
> also write histories. Indeed whatever it is we “know” and believe seem
> to prevent us from making sense of other positions. This is what happens
> to mainstream histories of economics. The past is interpreted in light
> of what exists and what we understand today. The question that is asked
> is how did we get to where we are, but as economists we must of
> necessity begin with some kind of truth as our foundation from which we
> look at what others have said and done. In the history of ideas, it is
> mainstream beliefs that will almost certainly have the most powerful
> influence in determining how to describe what came before.
>
> Think about what Mill wrote about the demand for commodities not being
> demand for labour. His words would have been the foundation for the most
> insightful analysis and forecast for what would happen following the
> introduction of the stimulus packages in 2009. Going to him now might
> provide some true insight into what went wrong. But the likelihood that
> anyone will try to make sense of things using Mill is pretty remote,
> unless, of course, one understands what he wrote and believes it
> already.
>
>
>
> Dr Steven Kates
> School of Economics, Finance
>    and Marketing
> RMIT University
> Level 12 / 239 Bourke Street
> Melbourne Vic 3000
>
> Phone: (03) 9925 5878
> Mobile: 042 7297 529
>



-- 
Prof. em. Dr. Dr.h.c. G.M. Ambrosi
Jean Monnet Professor "ad personam"
University of Trier,  FB IV VWL
D-54286 Trier
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