With his poll numbers diving, socialist French President François Hollande has turned to a free marketer for guidance.
During a speech on Tuesday, Hollande told his audience (via Google translate)
The time has come to resolve the main problem of France: its production.
Yes, I mean its production. We need to produce more, we must produce better.
Supply even creates demand.
This, of course, is the wise observation of the important French economist Jean-Baptiste Say:
Supply creates its own demand.
Let's hope Hollande doesn't stop there. There is much more that he can learn from Say. Amadeus Gabriel writes:
In the third session of his Cours à l'Athénée, Say explains that the supply of society is assured by the individuals who actually compose it. Furthermore, he notes that the disposal of capital is due to the private savings and precaution of individuals who, rather than destroying their savings, build their savings with the intention of creating new products. Likewise, he considers how these products come into the hands of those who need them, concluding that this is the result of interpersonal exchanges. As a result of this conclusion, he raises the following final question:Have we found the government in this analysis up to now?Again, he provides an answer:No. And the reason of this is the fact that government is not at all an essential part of the social organization.Thus, society could work without government management if people carried out their business and let other people carry out their business at the same time. Say underlines his position by giving some historical examples. Writing in 1819, he observes that at times during the previous thirty years, France had found itself in a situation in which all the authorities were suddenly halted. In these critical moments, no government was at all existent. And what does Say observe? During these periods, the essential functions of the social body could not have been carried out in a better way: everything worked, better than would have normally been the case. Say states that the worst occurred in times when people were too much governed.
Jude Wanniski, in "The Crash and Classical Economics", Wall Street Journal, Friday, October 26, 1979, wrote most approvingly of Say, in explaining the Depression with his Supply Side Economics. He writes:
ReplyDelete"Say, the French popularizer of Adam Smith's "Wealth of Nations", wrote: "The one product constitutes the means of purchasing another," and "A product offers, from that instant, a market for other commodities to the full total of its value. This became boiled down by others to: "Supply creates its own demand."
"In other words, suppliers of goods come together in the marketplace to exchange goods. If surplus appears in one place only, it's because in other places sufficient goods have not been produced to purchase that surplus. If a surplus appears everywhere, only an artificial barrier to commerce could have been the cause - some impediment to trade imposed by government. Thus the free-marketeer's dictum to government of "laissez faire", roughly "hands off!" "
The "Flip Side" of this - a collapse of production of Goods and Services, is also explained in this manner. As Hollande moves (predictably) to appropriate the LANGUAGE of Conservative Economic Principles to cover his failures - and those to come - remember what else Wanniski has to say. After a brief mention of the 2 Demand Theories - the liberal Keynesian School and conservative Monetarist School Wanniski writes:
"In both liberal and and conservative demand schools it is the government rather than the individual which has the central role, either through budgetary manipulation or monetary manipulation."
It should not as a surprise that Hollande would steal the language of a French Conservative Economics Theorist known throughout the world. It will not be a surprise when collapse comes to France no matter who Hollande quotes. Say provides an understanding that is lost to many today. As Buckley used to remind, "Who says 'A' must say 'B'. " It'll be up to everyone to remind Hollande that words have meaning and if he is to quote the great Say, it must mean more than merely quoting a "French Economist" for his benefit.
"Yeah, OK. You want Goods and Services? Stand back and get out of the way". I doubt that the Socialist Hollande will ever listen.
CW
"Yeah, OK. You want Goods and Services? Stand back and get out of the way". I doubt that the Socialist Hollande will ever listen.
ReplyDeleteYeah I agree. He's a socialist isn't he? By definition that makes him a complete moron. I have yet to see a socialist add 2+2 and say it equals 4. They always think it equals some other number. Their belief system is based entirely on emotion.