THE OTHER SYMPOSIUM PAPERS: A not m...

THE OTHER SYMPOSIUM PAPERS: A not many COMMENTS

Steven Kates' valuable paper upon J.-B. Say is essentially right in its three basic points. Say, like James Mill and Ricardo, was at pains to emphasize that there could be no general deficiency of demand, or at least, not for any substantial period. secondary none of these authors denied the existence of business fluctuations or, I may add, of unemployment Third, Keynes' description of the positions of Say and Malthus leaves plenteous to be desired. In short, I have plenteous more with which to agree than with which to differ in the Kates article. Indeed, the dimensions of my note is dedicated to showing that the one and the other Say's and Ricardo's concerns about unemployment were deeper than on a level the Kates article suggests, that this business even led Say to advocate a clear Keynesian counteractive for unemployment: public works. Correspondingly, I will exhibit that Ricardo's disquiet about joblessnes constitutes a advantageous part of his reversal forward the role of machinery (i.e., innovation) that in such a manner distressed his adherents.

Still, I do have a not many minor differences with Kates' position, and it have the appearances desirable to get them abroad of the way before turning to the main substance of this note. First, while anyone who reads Say, James Mill and Ricardo with care must agree that the nonexistence of general surfeits was one of their central points, it strike one as beings equally clear that it was sole one among a set of contentions that they considered to constitute vital component parts of their general position in the discussion. For example, all three of these authors, in Kates' words, "find... it beyond comprehension that someone should commend wasteful expenditure as a way of generating wealth. Spending is a depletion of wealth while saving adds to it" [Kates, 197] This, in the form of their repeated and emphasized distinction between "productive and unproductive consumption," safely is a very different point from denial of "the possibility of demand failure" [ibid., 192] which Kates would have us take as the unique and veritable meaning of Says law. I find that a bit unmatched given the fact, pointed disclosed by Kates, that the boundary "Says law" is modern, and that none of the three classical authors who are the focus of the discussion would have known what to make of the spell My own conclusion, then, is that the "Say's law" discussion encompassed a number of different propositions, all of them important to the three authors, denial of the possibility of demand failure being solely one of them.' The spell "Say's law" should therefore be recognized as ambiguous, at best, and is perhaps best interpreted to mean what Keyne and Lange claimed Say to have asserted, not what Say really did state.2 In what come nexts I deliberately use the spell vaguely, to connote the tangled skein of ideas that was the focus of the classical discussion beneath consideration here.

Professor Jonsson's valuable paper takes the Kates' analysis united step further, showing why improper choice of output quantity of about commodity must affect effective demand [i]or[/i] part of to the other coordination failure, even if it entails neither Keynesian nor Malthusian underconsumption. His argument, in scent is that excess supply of united good must be accompanied by the agency of excess demand for some other, or as he names McCulloch, "every excess in united class must be countervailed by the agency of an equal deficiency in more [i]or[/i] less other class." Jonsson then detects that whenever quantity demanded does not equal quantity supplied, ex ante, the amount actually sold must equal the smaller of the two: "Remember, in any market which does not clear, the short side always dominates...". Those who fail to vend what they had intended of common commodity will then buy les than they had desired of another worthy so that "...people may attempt to exchange more than they attempt to buy" [Jonsson 208] He ends that, "if everyone plans to trade honestly" total exces demand in the economy must equal naught ex ante. When there is disequilibrium in a certain number of particular markets, however, "people may attempt to vend more than they attempt to buy...this implies that when it arises to the actual excess demands as oppos to the ex ante exces demands across markets, we will find [a nonzero sum total of the values of quantities demanded minus quantities supplied]. Note that a stuff in any market is likely to change this into a strict inequality." [ibid., 209] In other words, in this account of the classical original ex post value of quantities demanded of all commodities together may well fall short of the ex ante values of the quantities supplied.

I must agree with Jonsson that the classical economists were profoundly concerned about the causes of palls and unemployment, that they denied the possibility of demand failure in the underconsumptionist faculty of perception as Kates also emphasizes, and that coordination failure stemming from (temporary) disequilibrium in particular markets is part of their story they repeatedly emphasize.

Still, here too, I give an inkling of that several caveats are appropriate. First, the Jonsson argument pretends to go well beyond anything I can remember in the literature of classical economics. I doubt whether any of them till doomsday thought the analysis through in the seasons presented. Here I note that no quotation from the classics is propounded that confirms their acceptance of the Jonsson interpretation of aggregate demand deficiency. in the same manner far as I know, the classical economists simply did not think in that way. recent writers are certainly entitled to point out to how gaps in classical arguments can be filled (thus, behold the section entitled, "Compatibility of Unemployment with the Law of Markets?", below), if it be not that it is another matter to argue that the recent interpretation is what they really had in mind. other I must reemphasize that the classical discussion of matters related to the "law of markets" has many facets, and that Jonsson's discussion deals solitary with one of them.3