KEYNES, MILL, AND SAY’S LAW: THE LEGITIMATE CASE KEYNES DIDN’T MAKE AGAINST J. S. MILL

• Published in: Journal of the History of Economic Thought Vol. 38; no. 3; pp. 329 - 349
• Format: Journal Article
• Language: English
• Published: Abingdon Cambridge University Press 01.09.2016
• Subjects: Commodities; Confusion; Economic history; Economic theory; Expenditures; Justification; Political economy; Purchasing power
• DOI: 10.1017/S1053837216000031
• ISSN: 0142-7716

Having in the General Theory quoted a passage from John Stuart Mill’s Principles as representative of ancient confusion, John Maynard Keynes has been accused of misinterpreting that passage and thus mistakenly identifying Mill as an upholder of the “classical” proposition that “supply creates its own demand.” Certain critics, seizing on Keynes’s misunderstanding, draw the conclusion that little was actually wrong with Mill’s analysis and that Keynes’s attack on Mill was therefore without justification.Our contention, however, is that, despite his error with respect, so to say, to the “letter” of Mill’s exposition, Keynes was right about the essential “substance” of Mill’s thesis. Mill’s thinking, we suggest, was deeply in thrall to the ideas of his father and Jean-Baptiste Say. The purpose of this paper is to demonstrate that Mill did indeed stand for a “classical” position, albeit qualified, but nevertheless vulnerable to Keynes’s critique as developed in the General Theory.