The European Society for the History of Economic Thought has proposed the
following as an issue that might be investigated during its next meeting in
May:



"First, over the issue as to whether a market-based economy tends naturally
to use its resources in the best possible way without any State
intervention beyond that of providing basic infrastructure and protecting
property rights: a matter of concern from the times of the General Glut
controversy that saw Malthus opposed to Ricardo down to the debates that
have marked the evolution of macroeconomics since the publication of
Keynes' *General Theory*."



I suppose with the words "from the times of" they are not with absolute
certainty suggesting that there is any relationship between denying the
possibility of a general glut and an overall *laissez-faire *approach to
economic policy, but let's face it, they are. And I realise that just
because I stated in my *Say's Law and the Keynesian Revolution* (Elgar
1998) that “the issue in regard to Say's Law is not *laissez-faire*” (p 16)
doesn't mean (1) that anyone interested in this issue read the book or (2)
that even if they had read it, that they had accepted my argument assuming
they had even noticed it.



The conclusion reached at the end of the general glut debate was that
demand did not affect the level of economic activity and therefore did not
affect the level of unemployment. That may or not be true but was accepted
almost without dissent from around 1808 through to 1936, during which time
the role of the state became ever larger. In 1935, no one thought of
economic policy as *laissez-faire* but there was even so an almost
universal denial of overproduction as a cause of recession and mass
unemployment. Indeed, just how far apart the two concepts are may be seen
in the following comment by John Stuart Mill, the most relentless defender
of the impossibility of a general glut amongst classical economists. This
is from his volume, *On Socialism *(Prometheus 1976: 102*) *where he is
discussing whether it is in all cases beneficial to leave things to “free
competition” or whether there are occasions for state intervention:



“The kind of policy described is sometimes possible where, as in the case
of railways, the only competition possible is between two or three great
companies, the operation being on too vast a scale to be within the reach
of individual capitalists, and this is one of the reasons why businesses
which require to be carried on by great joint-stock enterprises cannot be
trusted to competition, but, when not reserved by the State to itself,
ought to be carried on under conditions prescribed, and, from time to time,
varied by the State, for the purpose of insuring to the public a cheaper
supply of its wants than would be afforded by private interest in the
absence of sufficient competition.”



How much farther from the notion of *laissez-faire* could this be? Roping
the two together only demonstrates how little is understood about the
nature of the general glut debate – which to bring the issue up to our own
day is about whether the GFC was due to demand deficiency and a stimulus is
the proper response, the central economic question of our time. If I argue
that the poor economic conditions of the present are not caused by an
absence of demand - the core issue of the general glut debate - in doing so
I make absolutely no claim about whether there are a chain of government
policies and interventions that might in other ways help to improve the
state of the economy. The possibility of general gluts on the one hand and
*laissez-faire* on the other are independent concepts.



That governments may base their interventions on the belief that they have
to increase aggregate demand is something else. But even if governments
finally eventually do reduce their own level of expenditure and did somehow
balance their budgets, the notion that we would then be living in a
*laissez-faire* economy would remain unmistakeably wrong. They are not the
same issue and should not be confused.

On 8 October 2014 18:17, Van Den Berg, Richard <
[log in to unmask]> wrote:

> The 19th Annual Conference of the European Society for the History of
> Economic Thought (ESHET) will take place in Rome, Roma Tre University,
> 14-16 May 2015. Proposals for papers or sessions on all aspects of the
> history of economic thought are welcome. An abstract of about 400 words for
> a paper and 600 words for a session should be submitted on the conference
> website no later than January12th, 2015.
>
> Note that: a) published papers are not eligible for submission; b) only
> one conference presentation is allowed per person (but more than one
> submission may be accepted, if involving co-authors who are also
> presenting); c) session proposals must conform with a standard format (3
> papers, 90 min).
> Particularly welcome are proposals of papers and sessions that fall into
> the ESHET 2015 conference theme:
> Great controversies in economics
>
> The clash of opinions constitutes one of the main driving forces in the
> advancement of knowledge. While this applies to all the sciences,
> controversies in the study of economic phenomena have a particularly
> significant role. The changing nature of the subject matter of economic
> theory over time and space, the circumstance that economists, with their
> value judgements, belong to the system they themselves study, and the fact
> that no economic theory is neutral in terms of its social and welfare
> implications may account for this.
> A list of the great controversies in the history of economic thought may
> well include the monetary controversies of the19th century, the
> Methodenstreit, the Cambridge controversy over the theory of capital, and,
> more recently, disputes over rules vs. discretion, fiscal austerity and the
> causes and consequences of economic crises from the Great Depression to the
> present day.
>
> These controversies, unquestionably significant per se, can be regarded as
> instances of deeper fault lines characterizing the evolution of economic
> thinking over time. Two main divides come immediately to mind in this
> respect. First, over the issue as to whether a market-based economy tends
> naturally to use its resources in the best possible way without any State
> intervention beyond that of providing basic infrastructure and protecting
> property rights: a matter of concern from the times of the General Glut
> controversy that saw Malthus opposed to Ricardo down to the debates that
> have marked the evolution of macroeconomics since the publication of
> Keynes' General Theory. Closely connected to this first issue is the
> following: whether and, if so, to what extent the allocation and
> distribution of resources affect and are themselves affected by different
> social groups and institutions or are solely determined by technology,
> preferences and endowments (as exemplified by the differing views on wage
> determination entertained by classical, institutional or neoclassical
> economists). The well-known methodological divide between the mainly
> deductive approach to the study of economic problems and other approaches
> that attribute more weight to historical-inductive reasoning or specific
> perspectives (e.g. feminist economics) cuts across the issues mentioned
> above.
> Participants are welcome to address any issue related to specific and
> general controversies in economics or the effectiveness of communication
> between different schools of thought or the importance of pluralism in
> economics.
>
> YOUNG SCHOLARS SEMINAR
>
>
> ESHET invites young scholars -- persons currently enrolled in a PhD, or
> who have been awarded a PhD no more than two years prior to May 2015 (and
> regardless of age) -- to submit their work to the Young Scholars Seminar to
> be held on the occasion of tjhe ESHET Conference.
> Up to six submissions will be selected: ESHET will cover travel expenses
> up to €300, accommodation costs up to €80/night for three nights, and the
> registration fee. The authors of the selected papers will have 20 minutes
> each to present the paper, and a senior sholar will disscuss it. Papers may
> be on any topic relevant to the history of economic thought, and are not
> restricted to the conference theme.
> Candidates should e-mail a paper no longer than 9000 words to Professors
> Richard Sturn ([log in to unmask]) and Annalisa Rosselli (
> [log in to unmask]) by February 9th, 2015. Authors will be
> notified about the result of the selection process by March 23rd, 2015.
> Please include documentation of your (and your co-authors) position vis à
> vis your PhD, and indicate in the Subject of your e-mail: for Young
> Scholars Seminar.
> ESHET encourages young scholars to participate in the conference. A
> one-year ESHET membership is offered to all young scholars who submit a
> paper. Papers that have not been selected will be considered for
> presentation at other conference sessions.
>
> The Scientific Committee
>
> Tony Aspromourgos (The University of Sydney)
> José Luis Cardoso (Universidade de Lisboa)
> Roberto Ciccone (Università Roma Tre)
> Cristina Marcuzzo (Sapienza Università di Roma)
> Annalisa Rosselli (Università di Roma "Tor Vergata")
> Antonella Stirati (Università Roma Tre)
>
> This email has been scanned for all viruses by the MessageLabs Email
> Security System.
>



-- 

Dr Steven Kates
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    and Marketing
RMIT University
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