"Drop the dead donkey": a response to Steven Kates on the subject of Mill's fourth proposition on capital
Roy H Grieve ()
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Roy H Grieve: Department of Economics, University of Strathclyde
No 1603, Working Papers from University of Strathclyde Business School, Department of Economics
Steven Kates has recently (2015a) attempted to explain and justify J S Millâ€™s paradoxical â€œfourth proposition on capitalâ€ , which states that â€œdemand for commodities is not demand for labourâ€ , a proposition which notoriously â€“ over generations â€“ has baffled many eminent commentators. Kates intends to resolve the puzzle by offering â€œa proper understanding of Sayâ€™s Law as it was understood by Mill and his contemporaries.â€ We conclude that Kates does indeed reveal the logic of Millâ€™s proposition, making it clear that from Millâ€™s lost â€œsupply-sideâ€ perspective, it is in no way puzzling or paradoxical. However, at the same time it becomes evident that Millâ€™s whole position is undermined by his acceptance of the untenable belief that â€œdemand is constituted by supplyâ€ , which leaves us with the clear understanding that his fourth proposition, despite Katesâ€™s rationalisation and defence thereof, as well as certainly being paradoxical, is simply untrue.
Keywords: Mill's fourth proposition on capital; Say's Law; wage-fund theory; Steven Kates (search for similar items in EconPapers)
JEL-codes: B12 (search for similar items in EconPapers)
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