Re: [OPE-L] Say's Law

From: Fred Moseley (fmoseley@MTHOLYOKE.EDU)
Date: Tue Oct 25 2005 - 20:20:25 EDT

On Sun, 23 Oct 2005, Jerry Levy wrote:

> > Assuming that S = D for certain theoretical purposes is not the same as
> > "being a prisoner to Say's Law".  According to Say's Law, S must = D
> > ALWAYS AND OF NECESSITY in the real world.
> Hi Fred:
> While I agree that assuming S = D at one level of abstraction is not
> equivalent to assuming Say's Law, I think that what you assert above
> about Say's Law isn't quite correct:   Say's Law doesn't state that
> S will equal D "ALWAYS AND OF NECESSITY in the real world."
> Quite the contrary: Say's Law claims that when there is an increase
> in aggregate supply, that increase in supply will cause there to be an
> increase in aggregate demand.  That is, AD will adjust to AS.  Yet,
> neither Say  nor any of his followers (that I am aware of) claimed that
> the adjustment of AD would be instantaneous -- rather,  they
> recognized that there would be a temporal (but, they believed, brief)
> lag in practice. During that lag (the period when AD is adjusting to
> the new  level of AS) then S would _not_ equal D.  In other words, a
> claim that S creates its own D is not synonymous with a claim
> that in the real world S must "always and of necessity" equal D.

Jerry, I agree that this is one formulation of Say's law.  But my main
point remains valid.  Assuming that S = D for the theoretical purpose of
explaining the production of surplus-value and the distribution of
surplus-value "in its pure shape" is not the same thing as assuming quick
and automatic adjustment to S = D in the real capitalist economy.

In other words, Marx's assumption of S = D for his purposes does not make
him a "prisoner of Say's law".


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