Crucial Influences on Keynes’s Understanding of Say’s Law

Keynes’s General Theory was a full scale attempt to overthrow the influence of Say’s Law on economic theory. The initial idea to attack Say’s Law occurred to Keynes as a consequence of his reading Malthus’s letters to Ricardo in late 1932. Following this initial acquaintance, Keynes read other authors who had discussed Say’s Law in their own works. Amongst these, only J.A. Hobson’s influence is well documented. Two other authors, both American, appear to have been of singular importance: Frederick Taylor and Harlan C. McCracken. This paper explores the influence of Taylor and McCracken on the development of Keynes’s General Theory, with particular reference to their influence on Keynes’s understanding of the meaning of Say’s Law. Also discussed will be the origin of the term “Say’s Law” to describe what had previously been known as “the law of markets” or “théorie des débouchés”.