Hi,

Here is a source that may help with the answer.

“Let me therefore begin with this almost universally unknown fact: the term “Say’s Law” was invented in the twentieth century by an American economist, Fred Manville Taylor, and came into general discourse among economists on the American side of the Atlantic only following the publication of his introductory text, Principles of Economics, in 1921.” [source: STEVEN KATES, “,” LETTER TO THE EDITORS: SAY’S LAW: ITS ORIGINS AND MEANING”, Journal of the History of Economic Thought,” Volume 41, Number 1, March 2019]

The author also stated that “It might further be noted that the phrase “supply creates its own demand” is also twentieth-century American, invented by Harlan Linneus McCracken and first published in his Value Theory and Business Cycles (1933, p. 159) (Ibid., p. 124).

That article also touched on some other aspects of your question.

So it seems that it was not Keynes that coin the term.

Thank you, Lall. You gave me a very good information. I could download the paper and have read it. I also bought a book by Steven Kates:

Say's Law and the Keynesian Revolution: How Macroeconomics Lost Its Way.

Perhaps contact Dr Arnold Heertje hè is really an expert in this field

Guy Numa is the leading young expert on Say. He has a recent article in the Journal of Economic Perspectives (2019) on the misinterpretations of Say and commonalities with Keynes.

Fred M. Taylor, in his Principles of Economics (1925, p. 201) writes, "This principle, I have taken the liberty to designate Say's Law; because, though recognized by many earlier writers, it was particularly well brought out in the presentation of Say (1803)." The principle Taylor discusses is the fact that productions (supply) constitute demand for productions. But a more complete rendition of the law of markets from Say's own writings is a two-part proposition: (a) the production of a commodity immediately creates a demand, an outlet, or market for other produced goods and services, and (b) productions can only be purchased by or with other productions. These two parts of Say's proposition, which he claims to have derived from Adam Smith's Wealth of Nations, is what Keynes (1936) corrupted as "supply creates its own demand," having derived that version from a restatement by John Stuart Mill (1874, p. 73). Mill's own statement is, "Nothing is more true than it is produce which constitutes the market for produce, and that every increase of production, if distributed without miscalculation among all kinds of produce in the proportion which private interest would dictate, creates, or rather constitutes, its own demand."

Keynes, who appears never to have read Say's own (and better) formulation of the law of markets or outlets (as the French readers claim to be a more accurate rendition), found the proposition a major affront to his attempt to formulate a theory of employment in his General Theory (1936). This because Keynes believed that Say's Law assumes there is always full employment of labor or that there is no obstacle to full employment. Thus, Keynes (1939) subsequently concludes: "a theory so based is clearly incompetent to tackle the problems of unemployment and the trade cycle." I think it is grossly misleading for Alain Beraud and Guy Numa (2019) now to claim the possibility of agreement between Keynes and Say on the functioning of a monetary economy. For one thing, Say adopted Adam Smith's treatment of savings as being spent reproductively by borrowers whereas Keynes treats savings as a withdrawal from the expenditure stream; Keynes never connected savings with the purchase of interest- and/or dividend-earning assets. Savings simply disappear in some "black hole."

People should read J.-B. Say's own "Treatise on Political Economy" and "Letters to Mr. Malthus." Say himself treats the incidence of unemployment from economic contractions or labor's displacement by machinery as economic growth occurs, but which Keynes did not recognize.

Thank you, Jan Jansen , for your information. I have searched Dr. Arnold Heertje in ResearchGate. I could find many articles on him and a few paper by him, but I could not find his page.

Dear Daniele Tavani

I could not find a personal page of Guy Numa. Instead, I find his co-author Alain Béraud who is also a specialist of French economic thought. Do you know Guy Numa? If you have his e-mail address, please invite him to our ResearchGate.

You can write to him directly: his institutional page at Colorado State (where I also work) is https://economics.colostate.edu/author/gnuma/.

Wilhelm Roscher, head of the German Older Historical School of National Economics, criticized Say in his essay "Zur Lehre von den Absatzkrisen" (1861). He does not speak of "Say's law", but of the "strict theory of Say". His intention compared with our’s is the same: It is the question of whether every supply seeks/finds its demand (or not). In doing so, Roscher anticipates even Marx's discussion of Say’s theory and “his phrases” (MEW 26.2). According to my view, Keynes is located at the end of a longer chain of interpretations.

Whether Keynes used it as a straw man may be a moot point since orthodox economic theories and their policies (including New Keynesian QE) rest on the premise that supply creates it own demand. Thus Keynes' thesis was either valid or psychic, lol.

The term is present in Marx both in the Capital and the theories of surplus value in the way Keynes treated it. Marx never claimed that capitalism was not capable of growth, actually the schemes of expanded reproduction were meant to prove this. Therefore Say simply argued in favour of the idea that every supply creates its own demand and Ricardo, a quantity theory of money proponent, endorsed his view.

Dear Daniele Tavani

thank you for your information. At your suggestion, I have read

Alain Béraud and Guy Numa 2019 Retrospectives: Lord Keynes and Mr. Say: A Proximity of Ideas. Journal of Economic Perspectives 33(3): 228-242.

This was a very good paper to redress the long dated disfigured image made by J. M. Keynes. Keynes was a great economist, but his explanations contain many flaws and misleading accounts. It seems to me it is a time to reconstruct his system from very basis of the theory. This is one of reasons why I posed a question two years ago:

https://www.researchgate.net/post/Does_Post_Keynesian_Economics_need_no_theoretical_foundations

My own challenge for a reconstruction is shown by the recent book co-authored with Morioka and Taniguchi:

Book Microfoundations of Evolutionary Economics

Although the title claims that this book affords microfoundations of evolutionary economics, we believe it provides microfoundations of Post Keynesian economics too, as it is emphasized in the Preface.

At your advice, I will send an e-mail to Guy Numa.