Jean-Baptiste Say
Jean-Baptiste Say (January 5, 1767 – November 15, 1832) was a French economist and businessman. He had classically liberal views and argued in favour of competition, free trade and lifting restraints on business.
Biography
Say was born in Lyon.
His father, Jean-Etienne Etienne Say, was of Protestant family which had moved from Nîmes, to Geneva for some time in consequence of the revocation of the Edict of Nantes. Say was intended to follow a commercial career, and was sent, with his brother Horace, to England: here he lived first in Croydon, in the house of a merchant, to whom he acted as clerk, and afterwards in London, where he was in the service of another employer. When, on the death of the latter, he returned to France, he was employed in the office of a life assurance company directed by Étienne Clavière.
Say's first literary attempt was a pamphlet on the liberty of the press, published in 1789. He later worked under Mirabeau on the Courrier de Provence. In 1792 he took part as a volunteer in the campaign of Champagne; in 1793 he assumed, in conformity with the Revolutionary fashion, the pre-name of Atticus, and became secretary to Clavière, then finance minister.
In 1793 Say married Mlle Deloche, daughter of a former lawyer. From 1794 to 1800 Say edited a periodical entitled La Decade philosophique, litteraire, et politique, in which he expounded the doctrines of Adam Smith. He had by this time established his reputation as a publicist, and, when the consular government was established in 1799, he was selected as one of the hundred members of the tribunate, resigning the direction of the Decade.
In 1800 he published in Olbie, ou essai sur les moyens de reformer les moeurs d'une nation. In 1803 appeared Say's principal work, the Traite d'economie politique. In 1804, having shown his unwillingness to sacrifice his convictions for the purpose of furthering the designs of Napoleon, he was removed from the office of tribune. He then turned to industrial pursuits, and, having made himself acquainted with the processes of the cotton manufacture, founded at Auchy, in the Pas de Calais, a spinning-mill which employed four or five hundred persons, principally women and children. He devoted his leisure to the improvement of his economic treatise, which had for some time been out of print, but which the censorship did not permit him to republish.
In 1814 he "availed himself" (to use his own words) of the sort of liberty arising from the entrance of the allied powers into France to bring out a second edition of the work, dedicated to the emperor See also Alexander I of Russia, who had professed himself his pupil. In the same year the French government sent him to study the economic condition of Great Britain. The results of his observations appeared in A tract de l'Angleterre et des Anglais.
A third edition of the Traite appeared in 1817. A chair of industrial economy was founded for him in 1819 at the Conservatoire des Arts et Metiers. In 1831 he was made professor of political economy at the College de France. Say in 1828–1830 published his Cours complet d'economie politique pratique.
In his later years Say became subject to attacks of nervous apoplexy. He lost his wife in January 1830; and from that time his health constantly declined.
When the revolution of that year broke out, he was named a member of the council-general of the department of the Seine, but found it necessary to resign.
He died in Paris on November 15, 1832.
Say's Law
He is well known for Say's Law (or Say's Law of Markets), often summarised as
- "Aggregate supply creates its own aggregate demand",
- “Supply creates its own demand”, or
- “Supply constitutes its own demand”.
He argued that production and sale of goods in an economy automatically produces an income for the producers of the same value, which would then be reinjected into the economy and create enough demand to buy the goods. Thus production is determined by the supply of goods rather than demand. Unemployment of men, land or other resources would not be possible unless it were by choice, or due to some kind of restraint on trade.
He was also among the first to argue that money was neutral in its effect on the economy. Money is not desired for its own sake, but for what it can purchase. An increase in the amount of money in circulation would increase the price of other goods in terms of money (causing inflation), but would not change the relative prices of goods or the quantity produced. This idea was later developed by economists into the Quantity theory of money.
Say's ideas helped to inspire neoclassical economics which arose later in the 19th century. He wrote Traite d’Economique Politique.
As an interesting conjecture, Say's Law may have culled from Ecclesiastes 5:11 — "As goods increase, so do those who consume them. And what benefit are they to the owner except to feast his eyes on them?" (NIV)
External links
- Say's Law and Economic Growth
- Bio from the Mises Institute
- Federal Reserve Bank of Dallas Ecomomic Insights article (Volume 11, Number 1)
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