Say's law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say (1767–1832), who stated that "products are paid for with products" and "a glut can take place only when there are too many means of production applied to one kind of product and not enough to another". In Say's view, a rational businessman will never hoard money; he will promptly spend any money he gets "for the value of money is also perishable."
Say's law was generally accepted throughout the 19th century, though modified to incorporate the idea of a "boom and bust" cycle, which was viewed as natural and inevitable. During the worldwide Great Depression, in the first half of the 20th century, a school of economics called Keynesian economics arose, disputing Say's conclusions. The debate between classical economics and Keynesian economics continues today.
Say was not the discoverer of "Say's law", but the name appears to have stuck to the popularizer of this economic theory, which was in circulation at the dawn of the Industrial Revolution.
Famous quotes containing the word law:
“Trust me that as I ignore all law to help the slave, so will I ignore it all to protect an enslaved woman.”
—Susan B. Anthony (18201906)