From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Sun Oct 23 2005 - 13:46:55 EDT
On Sun, 23 Oct 2005 11:05:40 -0400 Jerry Levy <Gerald_A_Levy@MSN.COM> 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, While I think there is equivalence...in a sense...I agree with the rest of your post, Jerry. In his book on the topic Sowell discovered six or seven meanings for Say's Law. But in a sense surely Fred is right, in that capitalist circulation is often equated with barter, so there has been the belief that supply necessarily creates the potential demand (if distributed correctly) to sop up that supply. Why oversupply here would be matched with overdemand there is something Marx tried to show the liklihood of in the repro schemes, so that the adjustment process would likely be hardly smooth but shot through with disturbances and crises. I must say that I find Marx's exposition quite difficult, awkward, and I have yet to read a great improvment on the use of repro schema to show difficulties in the continuous adjustment process. There is surely expositional work to be done here. Foley's use is very intellectually satisfying but it is more in the use of the repro schema as a model of the determinants of growth. I would like the repro schema to be read primarily as a critique of the easy adjustment implied by Say's Law, not as a model of growth which dangerously suggests the infinity of capital, a la Hilferding and today Stedman Jones. Rakesh 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. > > In solidarity, Jerry On Sun, 23 Oct 2005 11:05:40 -0400 Jerry Levy <Gerald_A_Levy@MSN.COM> 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. > > In solidarity, Jerry
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