Sunday, August 2, 2015

A footnote on effectual demand

From footnote #11 in Keynes vs. Say at Mises:
The term "effectual demand" was actually introduced by Adam Smith in The Wealth of Nations (Book I, Chap. 7). John Stuart Mill explains. "Writers have … defined [demand as] the wish to possess, combined with the power of purchasing. To distinguish demand in this technical sense, from the demand which is synonymous with desire, they call the former effectual demand." Principles of Political Economy, 1848, Book III, Chap. II, § 3.

Yeah, that's what I thought. That's not what I got when I tried to understand what Keynes said about it. But that's what I thought, before.

In the same footnote, they equate the terms "effective demand" and "effectual demand", as I do:
The phrase "effectual demand," however, was italicized merely to bring out here the fact that Keynes did not invent this phrase. Ricardo even uses the phrase "effective demand" in his Notes on Malthus (Sraffa edition, Cambridge University Press, p. 234).

1 comment:

The Arthurian said...

Petty little bastards, aren't they? Pointing out that Keynes didn't invent the phrase.