What is the Austrian view of Say’s Law, that supply creates its own demand?
It depends on who you ask, there are differences within the “Austrian camp”. I’d put it as follows, in a barter economy any demand must come from previously existing supply. However, when money enters the picture things are somewhat different. Say’s law only holds under the conditions of monetary equilibrium. Supply and demand can differ for only two reasons a shift in the demand for or the supply of money. If the money supply is increasing there will be an increase in purchasing power and ex ante demand will be greater than supply. A similar situation is possible as a result of increasing demand for money (or decreasing supply of/ demand for money).
LOLOLOL. When money enters the picture, the pseudo-economists and monetary cranks enter the picture as well…and they start babbling…about lots of ‘scholarly’ theories…so funny.
From my understanding, Keynes attempted to demolish Say’s Law in attempt to prove that markets don’t work. Hazlitt outlines 4 rebuttals to Keynes vs. Say’s Law here:
What does the other side of the Austrian camp have to say about Say?
I know that George Reisman is adamantly supportive of Say’s Law. He has given a few lectures on the subject, and sells a tape about it. He make a very good arguement in favor of its value. After listening to it I had to agree that it is valid, but the government can enter the market with newly printed currency and disrupt the proper function of money. Other than that, it is obvious that one cannot buy unless one has first sold. Even if the product first sold is something that is already is oversupply, one must produce and sell to get the money to enter the market to buy. What are other positions on this? Anyone? I know that some economists feel that the Great Depression proved Say wrong. Any comments?