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". Comradely, Fred
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