Welcome to Jean-BaptisteSay.com

Jean-Baptiste Say stated that immutable, observable facts exist in political economy.  These general facts are able to be used to fashion general laws, which are "only the expression of what passes in all similar cases."  In turn general laws when used as proofs and applied to every day economic life are termed general principles.  Accordingly, to Say, laws (definitions) were statements of facts. And facts are "always the result of several anterior facts which are the causes of them."  For example, value "constitutes a quality composed of many others." So, for every definition, its lineage needs to be known or traced back through its anterior statements of facts. "A science is especially more complete relative to a certain order of facts, as we are more successful in stating the chain which unites them, to connect the effects to their true causes." 

This website reconstructs the inductive causal chain that connects to the Law of Markets of Say. Learn more about Say's inductions by exploring the chart on the right.

Relative to current markets, it is unsold commodities and commodities sold below costs of production that are of interest.  Both instances constitute unprofitable consumption, and unprofitable consumption is not production; no product results, no market is opened--in fact, a market has been closed.  The entrepreneur has destroyed the value of the productive services (capital) with the result of no value or insufficient value to replace it.  

There are three important points here: one, there exists an excess supply of commodities, but not of products; two, no revenue remains unconsumed, meaning that the ability to demand is equal to the actual demand; three, the unprofitable consumption shrinks the real economy by reducing the amount of existing value and, by destroying capital, weakens the ability of the real economy to create value.  The individual consumer's decisions determine which exchanges are unproductive consumption, which are unprofitable consumption, and which are profitable consumption.  With unproductive consumption and unprofitable consumption the circular flow of value, that is, the real economy, contracts; with profitable consumption (production) the circular flow of value expands (see Figure 2).  It is the type of consumption that is the pulse of the real trade cycle and the consumer sovereign determines the type of consumption.

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