What might interest you more than the words is that I didn’t write them, although I do, of course, agree with them completely. They are from an article in The American Spectator, Demand for Economic Growth by Bob Luddy.

Jean-Baptiste Say theorized that the growth of economies is not demand-driven, but growth is created by new and lower cost products and services. McDonald’s created huge demand in 1955 with a 15-cent hamburger, and now dominates fast food worldwide. As a result, a new, trillion-dollar industry has been created — eating away from home. We eat at grocery stores, fast food restaurants, at work, and from food trucks.

In 1925, Bell Labs made enormous investments in telephone technologies, resulting in international phone service at a modest cost. Today, electronics have improved service and lower costs, so virtually anyone can communicate worldwide.

Casual observation helps us validate Say’s Law. The big-box retailers have provided low-cost goods, stimulating demand for all types of consumer goods. We now have on-line vendors offering every product imaginable at even lower cost, delivered to your door by none other than FedEx, which did not exist when I was in college.

America has the opportunity to take full advantage of Say’s Law, and to create new demand and growth from investment and innovation. The requisites are: lower taxes, reduced regulation, and leaders to innovate. We must also focus on education, as innovators must have enormous knowledge to create the future world of ideas.

Small business, which creates the majority of new jobs, is especially challenged by government regulation, because financial and management resources are very limited.

This month marks the 80th anniversary of the publication of the second most destructive book in the history of economics. It actually requires concentrated mis-education to believe that buying things, rather than producing things, is the basis for growth and employment. I remain very uncertain about when Say’s Law will again return to the centre of economic policy, but I am absolutely certain that until it does, macroeconomic policy will do mostly harm and seldom do an economy any good.

[My very great thanks to Autumn Baroque for sending this article along.]