‘Supply Creates its Own Demand’: A Discussion of the Origins of the Phrase and of its Adequacy as an Interpretation of Say’s Law of Markets

Steven Kates

History of Economics Review, 2005, vol. 41, issue 1, 49-60

Abstract: Two issues are addressed in this paper. Firstly, the origins of the phrase ‘supply creates its own demand’ as a definition of Say’s Law are investigated. The paper argues that while there are a number of possible sources for these words within the classical literature, their most likely origin is in the writings of John Stuart Mill. The second more important issue is whether those words are an accurate summary statement of the conclusions classical economists wished to draw. The paper argues that the phrase is entirely inadequate as a definition of Say’s Law, not just failing to capture the full meaning classical economists had wished to convey but seriously misleading if one wishes to understand how classical economists understood the way economies actually work.

Date: 2005
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DOI: 10.1080/18386318.2005.11681202

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