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Essay on Jean-Baptiste Say
Summary
Jean-Baptiste Say (January 5, 1767 - November 15, 1832) was a French economist and businessman. He had liberal views and argued in favor of competition, free trade and lifting restraints on business.
Say is well known for Say's Law, often summarized as "Aggregate supply creates its own aggregate demand". He argued that production and sale of goods in an economy automatically produces an income for the producers of the same value, which would then be re-injected into the economy and create enough demand to buy the goods. Thus production is determined by the supply of goods rather than demand. Unemployment of men, land or other resources would not be possible unless it were by choice, or due to some kind of restraint on trade.
He was also among the first to argue that money was neutral in its effect on the economy. Money is not desired for its own sake, but for what it can purchase. An increase in the amount of money in circulation would increase the price of other goods in terms of money (causing inflation), but would not change the relative prices of goods or the quantity produced.
This idea was later developed by economists into the Quantity theory of money. Say's ideas helped to inspire neoclassical economics which arose later in the 19th century. The argument referred to as Say's Law was heavily criticized by John Maynard Keynes and Keynesian economists.
In addition to his famous Treatise, his works included Cours Complet d Economie Politique Pratique and Letters to Mr. Malthus. By means of his writing, his influence spread to Italy, Spain, Germany, Russia, Latin America, Great Britain, and the United States, in which latter country his admirers included Thomas Jefferson and James Madison. His devotion to laissez-faire principles appears to have been maintained throughout his life. Say died in Paris. (Palmer,1997)....
