I am doing a presentation in Los Angeles at the end of the week which I have titled “A Beginner’s Guide to Say’s Law”. At the centre of this presentation there is a slide that reads as shown below. And the point I am making, and will then set out to prove, is that not only was not one of these propositions accepted by John Stuart Mill nor by any of his mainstream classical contemporaries, but demonstrating that the classical economists were right is far easier than you might think. This is the slide:

Economics is filled with nonsense no economist before the marginal revolution [1870], never mind the Keynesian Revolution [1936], would have believed:

A national economy is driven from the demand side

Classical economists had no theory to explain involuntary unemployment

Recessions can be caused by demand deficiency

Thinking of national saving as a flow of money makes sense

Unproductive public spending can make an economy grow

Profits are maximised where Marginal Revenue equals Marginal Cost

Supply and demand explains what businesses do and how markets work

You can discuss the operation of an economy without discussing the role of the entrepreneur in detail

Nor is it that our modern ways of thinking had never occurred in classical times. Every one of these propositions had their fringe-dwelling supporters but not only were none of these accepted by the classical mainstream but each and every one was also actively opposed. Today, of course, every one of these is mainstream. So what makes you actually believe in progress when economic theory was far more sound and acute 150 years ago than it is today?