Say's Law example essay topic

Biography Say (1767-1832) was a French economist who enunciated the doctrine that became known as Say's Law of Markets, an economic thesis for many years. He was born in Lyons on January 5, 1767 to middle-class Huguenot parents, and spent most of his early years in Geneva and London. As a young man, he was engaged in business in England. Returning to France at the outbreak of the French Revolution, in the employ of a life insurance company, he became a journalist after, being noted for his skill in expounding the economic principles of Adam Smith with force and clarity. From 1816, he was a professor of Political Economics at various institutions. Soon, he became an influential member of a group of strongly pro-free-market intellectuals.

His devotion to laissez-faire principles appears to have been maintained throughout his life. He died in Paris on November 15, 1832. Books, Laws, and Ideas Written Masterpieces Ollie, ou essai sur le moyens de r'eformer les moeurs d'une nation, 1800. Trait'e d'economie politique, ou simple exposition de la mani " ere dont se for ment, se distribu ent, et se component les richesses, 1803 A Treatise on Political Economy, or the production, distribution and consumption of wealth, 1803 (Engl. transl.) De l'Angleterre et des Anglais, 1815.

Catechism of Political Economy, 1815. Petit volume contenant quelques apercus des hommes et de la soci " et'e, 1817. Des can aux de navigation dans l'etat actuel de la France, 1818 De l'importance de le port de la Villette, 1818 Cours 'a l'Ath " en'ee de Paris, 1819. Lettres 'a M. Malthus sur diff " erent sujets d'economie politique, notamment sur les causes de la stagnation g'en " erale du commerce, 1820. "Letters to Thomas Robert Malthus on Political Economy and Stagnation of Commerce", 1821, (transl. of 1820), The Pamphleteer "Sur la balance des consommation's avec les productions", 1824, Revue Encyclop " edique. "Examen Critique du discours de M. Mcculloch sur l'economie politique", 1825, Revue Encyclop " edique.

"De l'economie politique moderne, esquisse g'en " erale de cette science, de sa nomenclature, de son histoire et de sa bibliographie", 1826, Encyclop " edie progressive. "De la crime commerciale", 1826, Revue Encyclop " edique "Compte rendu de Malthus "Definitions in Political Economy", 1827, Revue Encyclop " edique "Discours d'ouverture au cours d'economie industrielle", 1828 Cours complet d'economie politique pratique, 1828. M'elange et correspondence d'economie politique, 1833. Oeuvres diverses de J. -B. Say, 1848. La Decade Philosophique, first editor Laws, Policies, And Ideas Say's Law of Markets Entrepreneurs, Capital, and Interest Value and Utility Taxes and The State Money and Banking Say's Law of Markets The cornerstone of classical economics was Say's Law which states that the production of goods and services creates the necessary and sufficient means with which to purchase everything produced. In simplified language, "Supply creates its own demand".

The implication is that when a full- employment level of output is produced, all of it is purchased. In a barter economy, one cannot quarrel with Say's Law. A farmer exchanges wheat for lumber and clothing. The production (supply) of wheat is the direct source of the demand for lumber and clothing.

Supply of goods and services in general gives rise to an equivalent demand for other goods and services. In a money economy, it is not so obvious that say's law is necessarily valid. The farmer's wheat is exchanged for money but not all receipts are necessarily exchanged for goods and services. The act of saving - the withdrawal of income from the expenditure stream - potentially causes complications in the analysis.

Unless the savings is counterbalanced by an equivalent amount of investment spending when output is at full employment, aggregate spending may be insufficient to buy back all the output produced. Not all classical economists initially accepted Say's law. The most spirited argument against it was put forward by Thomas Malthus, a preacher. Malthus argued that when people saved, part of their income would be lost to the economy and there wouldn't be as much aggregate demand out there as aggregate supply. According to Malthus, Say's law did not necessarily hold true.