Say

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JEAN BAPTISTE SAY (1767-1832)

Very little has been written about the life of this Frenchman. His major contribution was his theory of supply and demand, which has become to be known as ‘Says Law’.

SAYS LAW – The essential arguments this presented were, firstly we exchange goods for other goods. Secondly having one good will generate demand for another good. This idea does sound a bit gobbledegook but it does make sense when you explore it further. What Say suggested was money was the basis for the exchange of goods and therefore the reason why people were in business. Say went further stating, by producing the goods themselves, an income is created for both the manufacturer and their workers. This feeds back into society, for example a worker makes shoes, is paid a wage which is then used to buy other products such as food and clothing. The major assumption was that as money was generated it was always spent on something else.

The work of Say although quite logical today was quite revolutionary for its time. The problem with the work was that it assumed there would never be any over-production because as goods were being produced income was generated and other goods were bought. The problem in modern times is that mass production can lead to mass stock piles if goods are not purchased.

‘Says Law’ is a crude analysis, never the less it was one of the first perspectives on looking at merely at supply and demand.

ESSENTIAL FEATURES OF THE WORKS OF J B SAY

Says Law on supply and demand

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