I know that in terms of this discussion, I’m actually dragging it down, rather than contributing, but I want to learn more about this because it seems to have huge implications potentially.
I’m wondering if Professor Murphy can provide a dumbed-down introduction for a beginner in economics to Say’s Law and its implications for me. I have been trying to understand it, but it seems like everyone has a different conception of what it is. I’d like to know the following:
1 What was it that Say actually was trying to say?
2. What is it that people thought he said?
3. What is the Keynesian rebuttal of what he said? I think I understand it to be basically that if there was no demand for things, it wouldn’t matter whether they were produced because nobody would buy them, and that we have to stimulate demand by having the fed inflate to give people more money in order to increase spending in the economy , but I’d like it to be put in the concise and precise terms that you are so good at using, so I can be sure to understand it better.
4. What is the Austrian critique of Keynesian attacks on Say’s Law?
5. My micro course is using Krugman’s textbook(*perhaps there be a contra-krugman textbook haha). In the section on demand, it says that one of the things which has an impact on demand is income. What is wrong with saying that a decrease in income can cause a decrease in demand, and that therefore, when there are economy wide layoffs which decrease demand, that could lead to a recession?
6. I get the sense that the “no such thing as a general glut” premise and the Rothbardian “cluster of errors” concept might have some relation in terms of proving that there’s no such thing as a shortage of economy wide demand which causes crises, but can’t quite put finger on it. Are they connected, and if so, how? Does ATBC have any implications on the debate over Say’s Law?
7. Does Say’s Law have any relation to whether supply or demand is more influential in setting prices?