Friday, December 8, 2017

Ricardo's Law

Brad DeLong, back in 2010, looked into The "General Glut" of Thomas Robert Malthus. DeLong offers some thoughts, then follows up with "Malthus on 'glut': all the mentions I have found". Wow, what a great resource that is!

At one point DeLong has Malthus quoting David Ricardo:

If men ceased to consume, they would cease to produce.

Supply is limited by demand.

1 comment:

The Arthurian said...

For further investigation:
From Ricardo's Macroeconomics at Google Books:

"A final proposition under the rubric of Say's law concerns the adequacy of demand in the long run: in the secular period there will always be effectual demand for a country's output, no matter how vastly it increases. Ricardo stated the proposition in Chapter 21 of his Principles, "Effects of Accumulation on Profits," capping his argument that if the corn laws were repealed, Britain's economy could grow without limit. The chapter specifically rejects Adam Smith's prediction that Britain's economy would stagnate because of the "increasing competition of capitals."