Say's Law of Markets and the Meaning of “Supply CONSTITUTES Demand”

I shall suggest that, fairly interpreted, “Say's law of markets” survives as the most fundamental “economic law” in all economic theory. It enunciates the principle that “demands in general” are “supplies in general”—different aspects of one phenomenon.

Today's textbooks usually express Say's law most carelessly, using a description of the law which, I think, Keynes was the first to use. It asserts, they tell their readers (without mentioning Keynes) that “supply creates its own demand.” But the supply of plums does not create the demand for plums. And the word “creates” is injudicious. What the law really asserts is that the supply of plums constitutes demand for whatever the supplier is destined to acquire in exchange for the plums under barter, or with the money proceeds in a money economy. (The supplier may of course hold on to the money, i.e., demand it instead of other non-money).

—William H. Hutt, introduction to A Rehabilitation of Say's Law (Athens, OH: Ohio University Press, 1974), 3.