Supply Creates Its Own Demon II: You Don’t, Say!
by Sandwichman at Econospeak (reposted with permission from the author)
Supply Creates Its Own Demon II: You Don’t, Say!
Karl Marx could hardly bring himself to utter the name of J. B. Say without affixing to it some contemptuous description or sarcastic remark:
“Say’s earth-shaking discovery…”
“…adopted by Ricardo from the tedious Say (and to which we shall return when we discuss that miserable individual)…”
“…his authority, Say, is playing a trick on him here… “
“…we shall criticise Say’s theories later, when we deal with this humbug himself.”
“The constant recurrence of crises has in fact reduced the rigmarole of Say and others to a phraseology which is now only used in times of prosperity but is cast aside in times of crises.”
“This is the childish babble of a Say…”
“Say, who tries to hide his dull superficiality by repeating in absolute general phrases Smith’s inconsistencies and blunders…”
“Storch says of this trash of Say’s…
“After Garnier appeared the inane Jean-Baptiste Say’s Traité d’économie politique.”
“This is his kind of originality, his kind of productivity and way of making discoveries, And with his customary logic, he refutes himself again…”
“Say replies with his characteristic profundity…”
“…the absurdity of J. B. Say, who pretends to account…”
“…as it does to J. B. Say in the vulgarisation of Adam Smith.”
“The result he arrives at, is precisely that proposition of Ricardo that he aimed at disproving. After this mighty effort of thought, he triumphantly apostrophises Malthus…”
“A disciple of Ricardo, in reply to the insipid nonsense uttered by J. B. Say…”
Curiously, in “The compensation theory, with regard to the workers displaced by machinery,” Section 6, Chapter 15, Volume 1 of Capital, Marx performed the ultimate insult by snubbing Say, almost entirely. The first sentence includes “James Mill, McCulloch, Torrens, Senior and John Stuart Mill” among those bourgeois political economists claiming that machinery sets free enough capital to reabsorb the workers displaced by it. Say is relegated to a footnote citing the anonymous pamphlet in which the author refutes “the insipid nonsense uttered by J. B. Say” by pointing out:
Where division of labour is well developed, the skill of the labourer is available only in that particular branch in which it has been acquired; he himself is a sort of machine. It does not therefore help matters one jot, to repeat in parrot fashion, that things have a tendency to find their level. On looking around us we cannot but see, that they are unable to find their level for a long time; and that when they do find it, the level is always lower than at the commencement of the process.
Thus, the anonymous author of An Inquiry into Those Principles Respecting the Nature of Demand, and the Necessity of Consumption, Lately Advocated by Mr. Malthus, neatly summed up in a paragraph the rebuttal to the so-called compensation theory. This succinct reply makes a mystery of Marx’s exclusion of Say from his listing, at the start of the section, of bourgeois political economists.
The mystery is solved in Chapter 20 of Theories of Surplus Value, “Disintegration of the Ricardian School,” where Marx discussed the pamphlet he described as “one of the best of the polemical works of the decade.” “What the author writes about Say is very true,” Marx observed. Following a quotation from the pamphlet about the hazard arising from the difference in timing between consumption by workers and their production, Marx exclaimed that this was, “indeed the secret basis of glut.” Several paragraphs later, Marx concluded:
Over-production, the credit system, etc., are means by which capitalist production seeks to break through its own barriers and to produce over and above its own limits. Capitalist production, on the one hand, has this driving force; on the other hand, it only tolerates production commensurate with the profitable employment of existing capital.
CORRECT LINK for Supply Creates Its Own Demon II: You Don’t, Say!:
For a repudiation of the Adam Smith’s theories that are often used to support today’s economic models. A short enjoyable book is the Bad-Samaritans that one does not have to have a PHD in math to read and understand modern economics.
Regarding the book you recommend by Ha-Joon Chang. I don’t know anything about the author, but the Amazon blurb quotes the contents as follows, “Ha-Joon Chang blasts holes in the “World Is Flat” orthodoxy of Thomas Friedman and other neo-liberal economists who argue that…..” Unless there is another Thomas Friedman and he is actually an economist of any sort, that quote is a bit off the end of the accuracy of attribution scale.
Does anyone else know the book referred to, or its author?
“Lucid, deeply ingormed, an enlivened with striking illustrations, this penetrating study could be entitled ‘Economics in the Real World.’ “ Noam Chomsky
“This is a marvelous book. Well researched, panoramic in its scope, and beautifully written, Band Samaritans is the perfect riposte to devotees of a one-size-fits-all model of growth and globalization. I strongly urge you to read it.” Larrly Elliott, economics editor, Guardian
I believe he is a rode’s scholar; Clinton was also, so that’s not much of a distinction. But till I read this book often lost arguments from those who supported A. Smiths theories.
Jack it’s a short book and it really is a fun read, which is exceptional for a book on economics from an economic professor.