Say's Law of the Market | Create Wealth

#economics #propaganda #money #law

It’s commonly said that Say’s law is: production creates its own demand. This is a straw man. This kind of thinking led to busy work projects like digging holes and filling them in. Say’s law can’t be explained in a sentence. This should arouse suspicion. People don’t produce—abracadabra—there is demand for the product. People produce so they can consume, but as Say pointed out, this is “according to the wants” of the people. The product must have value.

“It is the aim of good government to stimulate production, of bad government to encourage consumption.” The first part of that sentence is easy to understand, governments must remove barriers to production. The second part is a little more complicated. We often hear to spend to stimulate the economy. Yes, in the short run this will work. The economy will do very well on day 1 if all money is spent. What happens on day 2? There is no money to consume.

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