A REBUTTAL OF JAMES AHIAKPOR’S FALLACIES AND MISREPRESENTATIONS OF JEAN-BAPTISTE SAY’S WRITINGS AND THINKING

 Alain Béraud and Guy Numa*

Abstract: James Ahiakpor argues that our “claim that Say changed his mind on his law of markets or outlets in the fifth and sixth editions [of the Treatise]…is misleading.” We disagree emphatically with Ahiakpor’s characterizations. His note is full of errors and misrepresentations. In order to correctly analyze and interpret what Say wrote and meant, one must i) analyze the totality of Say’s writings, ii) study carefully his publications in chronological order, and iii) take into account what Say wrote about his previous positions on key issues, none of which Ahiakpor has done. Ahiakpor’s note is nothing but a selective and biased account of the textual evidence.

 

I. INTRODUCTION

In his note sent to the editors of the Journal of the History of Economic Thought (hereafter JHET) in July 2019, James Ahiakpor criticizes our articles published in the June 2018 issue (Béraud and Numa 2018a, b). He posits that our “claim that Say changed his mind on his law of markets or outlets in the fifth and sixth editions [of the Treatise] … is misleading.” We disagree emphatically with Ahiakpor’s characterizations. His note is packed with errors and misrepresentations. It is striking that in his entire note, Ahiakpor only refers to the English translation of the fourth edition of Say’s Traité d’économie politique (hereafter Traité) and of Lettres à M. Malthus, as if these two texts were the only writings published by Say. By arbitrarily selecting a single edition of Say’s Traité (out of six) as if this book was published only once, he conveniently overlooks the evolution and changes in Say’s thinking as well as Say’s explicit acknowledgment of those changes. Ahiakpor’s note is a distortion of the textual evidence by omission; it is a selective and biased account of the historical record. His misinterpretations serve as a lesson in the importance of thoroughly analyzing Say’s primary sources in order to fully grasp the substance of Say’s message (Steiner 1998; Béraud and Numa 2019).

From the outset, Ahiakpor uses a bogus argument. We never claimed that “Say changed his mind on his law of markets or outlets in the … sixth edition [of Treatise].” This posthumous (albeit legitimate) edition contains only minor differences compared to the fifth. Changes between the fourth and the fifth edition of Traité, however, are significant and well-documented (Steiner 2006; Béraud and Numa 2008a). To make matters worse, Ahiakpor cites or refers to some passages of the fourth edition ([1821a] 1971, pp. 139, 273), ignoring the fact that Say removed them in the fifth edition apparently because he considered them inappropriate. It is evident that Ahiakpor never consulted the fifth edition, let alone the sixth. By contrast, in our articles we retrace the evolution of Say’s thinking using the totality of texts authored by Say from Lettres à M. Malthus (1820) until his death in 1832. This includes the fifth edition of Traité (1826), Cours d’économie politique pratique (1828–29, hereafter Cours), his second magnum opus even more voluminous than Traité, his teaching at the Conservatoire des Arts et Métiers (1820–32) and at the Collège de France (1830–32), and several articles, particularly “De la Balance des Consommations avec la Production” (1824), “L’Économie Politique” (1826a), and “De la Crise Commerciale en Angleterre” (1826b). Besides, in addition to the fourth edition of Traité (1819), our study includes a scrutiny of the first three editions (1803, 1814, 1817), a task that Ahiakpor is also unwilling or unable to perform. 

Ahiakpor’s piece contains numerous inconsistencies. He repeatedly refers to David Hume and Adam Smith’s influences on Say’s thinking. We do not dispute this influence. However, Say’s views were not always in line with those of the two Scotsmen. For instance, Say never relied on their analyses in his discussion of economic crises; in fact, Say’s views were different.

^* Alain Béraud, THEMA, University of Cergy-Pontoise, France; Guy Numa, Economics Department, Colorado State University, USA. Email: guy.numa@colostate.edu. Translations of Say’s writings are ours unless otherwise noted.

Quoting Hume, Smith or even John Stuart Mill to explain what Say said and meant—as Ahiakpor does—is the true misleading endeavor. Although Say praised Smith, he criticized and disagreed with him on many topics such as free trade (Numa 2019) or the role of saving (Numa 2020).[1] Therefore, Ahiakpor’s unsubstantiated assertion that Say tried “to restate the principles from Smith’s Wealth of Nations and other sources” (p. 14) is inaccurate.[2] Moreover, stating that “Adam Smith, the latter of whose Wealth of Nations Say cited the most in his Treatise” (p. 14) proves nothing.[3]

Finally, Ahiakpor seems to struggle with basic concepts and definitions. Unlike Say, he does not understand that, in a monetary economy, in order to pay, one must have money or obtain credit from a seller or from a banking institution. His presentation of the law of outlets is meaningless because he treats money just like any other good, so that the law becomes a tautology. What he does not comprehend is that a general glut describes a situation where an excess supply of goods coexists with an excess demand for money.

In order to correctly analyze and interpret what Say wrote and meant, we contend that one must analyze the totality of Say’s writings, study carefully his publications in chronological order, and take into account what Say said about his previous positions on key issues, none of which Ahiakpor has done. Analysts who have studied Say’s writings usually focus on value and distribution, issues on which Say was particularly critical of Ricardo (Steiner 2006). To respond to Ahiakpor, we focus instead on Say’s law of outlets and on his monetary analysis.

II. ON “THE CAUSES THAT OPEN GREATER OR LESSER OUTLETS TO OUR PRODUCTS”

This is the issue that Say addressed in Cours ([1828–29] 2010, p. 349), offering a somewhat different answer than in the various editions of Traité published previously. All his life, Say steadfastly sought to clarify his views. In some cases, he amended them; in other instances, he went further, abandoning positions he previously defended. Thus, to justify the idea that products were bought only with products, in the first edition of Traité ([1803] 2006, p. 244), he wrote that “generally there is no more money in [the] hands [of each producer] at the end of the year than he had at the beginning.” In the second edition ([1814] 2006, p. 248), he changed his views and now explained that if money was lacking, market forces would respond to any increased money demand by making available monetary substitutes such as bills of exchange, banknotes, or other credit instruments. 

Say consistently used the same argument on the law of outlets: the interests of various nations and the interests of individuals within any country were not opposed to each other: “each individual is interested in the prosperity of all … No matter what industry one deals with, the talent one possesses is as better employed and commands a better salary, as one is surrounded by individuals who are better off themselves” (Say, [1814] 2006, p. 254). He reiterated the same idea in the last paragraph of Cours:

The theory of outlets, by showing that the interests of men and nations are never in opposition against each other, will necessarily disseminate the seeds of harmony and peace which will germinate over time, and which will not be one of the smallest benefits of the more accurate opinion about the economy of societies (Say [1828–29] 2010, p. 1273).

In an equally consistent fashion, he rejected Malthus’s and Sismondi’s thesis, which held that crises resulted from too rapid capital accumulation so that an excess supply of goods could occur. He maintained instead that accumulating capital allowed the economy to grow and generate wealth. Based on these propositions, Say rejected what Mirabeau and Smith labeled the mercantile system, condemned colonialism, and he criticized Napoleon’s policies.

The novelty in Say’s writings is his discussion of the 1825 crisis in England. In the first four editions of Traité, like David Ricardo ([1817] 1951) and Robert Torrens (1819; 1821), Say argued that crises were caused by a disproportion between supply and demand. Too many goods were produced in some sectors and not enough in others. The problem was to determine how the disequilibrium would be solved and whether the crisis could affect the whole economy. In his article on the 1825 crisis, Say explained that speculation was the main culprit. By discounting too many bills issued by merchants, country banks spurred reckless speculation. The abundance of monetary instruments in circulation led to a decline in the value of money compared with bullion. Holders of banknotes issued by the Bank of England rushed to country banks in order to redeem their notes into specie. Constrained by the obligation of convertibility and facing exhausted metallic reserves, country banks were forced to interrupt their discounting operations. As a result, entrepreneurs could no longer issue bills. They thus failed to fulfill their commitments, leading to a spike in bankruptcies. Although Say’s scenario brings to mind Smith’s overtrading ([1776] 1976, pp. 437–438), he never mentioned Smith nor did he rely on the Smithian distinction between real and fictitious bills, contrary to what Ahiakpor intimates (p. 10). Instead, for Say the problem was that banks discounted too many bills, not that the bills were fictitious. 

Say’s article on the 1825 crisis in England was a response to Jean-Charles Léonard Simonde de Sismondi’s article entitled “Sur la balance des consommations avec les productions” published in 1824 in the same journal. In his essay, Sismondi maintained that economic crises originated from too rapid capital accumulation: production increased before the demand for goods climbed. In outlining his monetary theory of crisis against Sismondi’s, Say considered his views to be consistent with the classical tradition. In his text, he referred to Ricardo, not to Hume or Smith: “far from invalidating the natural laws discovered by the leading authors, the latest [economic] crisis fully confirms them. It can be explained by Ricardo’s principles on monies” (Say 1826b, pp. 42–43), though Ricardo never formulated any monetary theory of crisis. Say’s account of the crisis does not appear in the chapter on outlets of the fifth edition of Traité or in the outlets chapter of Cours. In fact, his monetary theory of crisis is restated in the chapter devoted to the representative signs of money in Traité ([1826] 2006, p. 586) and in the chapters dealing with monetary issues in Cours ([1828–29] 2010, pp. 430, 487–488). Say concluded that commercial banks should not be allowed to issue banknotes without restrictions. 

There is a difference between the chapters devoted to outlets in Traité and in Cours. In Traité, the idea that monetary substitutes could replace the missing money is central to Say’s argument. It operates much faster than the scenarios described by Hume, Smith or Ahiakpor. The problem is that, as Say’s account shows, monetary substitutes could be lacking as well: during the slump, the circulation of promissory notes was hindered because banks no longer discounted them, thereby constricting credit and reducing the quantity of banknotes in circulation. In other words, far from being a remedy, monetary substitutes could cause economic crises.

Say dealt with the issue of gluts slightly differently. In Traité ([1819] 2006, p. 253) and in Cours (Say [1828–29] 2010, p. 354), his thesis was that some goods did not sell because other goods were in short supply. The question was to determine whether the structure of output would adjust swiftly or whether the disproportion between supply and demand could lead to a global disequilibrium. Ahiakpor conveniently avoids to mention Say’s indicating in the fourth edition of Traité that, if in any country, “production is sluggish … all the demands are on the decline; the value of the products is not equal to the costs of production.” (Say [1819] 2006, p. 260). In other words, “while the demands are on the decline, there are always more goods [that are] supplied than goods [that are] sold” (Say [1814] 2006, p. 260n). In short, the crucial point for Say was that, in a stagnating or declining economy, a general glut was possible. In the fifth edition of Traité, Say replaced this passage with a new text in which he addressed the problem differently, though the substance of his message was similar. He now wondered if the economic growth process could be limited by the saturation of needs; in such a case, it would be increasingly difficult to preserve cost-covering prices (Say [1826] 2006, p. 261). If the quantity of food that could be purchased with the daily wage was no longer sufficient to allow individuals to subsist, the economy would de facto stagnate. In Cours, Say indicated that one way to remedy the problem was to compare production costs with the uses of the product: “one pays each good at the lowest price as possible; but [the good] is no longer paid if the initial price exceeds the satisfaction provided by its consumption” (Say [1828–29] 2010, p. 357). Say ([1826] 2006, p. 259) was led to believe that “in order to support industry … one should stimulate the development of tastes and wants which promote the desire to consume … [and] help consumers gain so they can buy.” Say ([1828–29] 2010, pp. 353–354) forcefully added: “if products are traded for each other, how can we explain that at times all the products are oversupplied, and that it is not possible to sell anything? Or to say it otherwise, that it is not possible to sell at a loss?” His diagnosis was clear: the general glut was a reality and the primary focus of attention. In the same passage, Say blamed bad governments which depressed the growth of industries with great potential. The connection between Say’s law of outlets and his theory of crises is complex, particularly for the reader who relies on a limited number of primary sources. The takeaway is that Say’s monetary theory of crisis developed in 1826 signaled a clear change in Say’s thinking about his law of outlets. 

III. INTEREST AND MONEY

Ahiakpor insinuates, with no evidence, that we have claimed “that until the fifth or sixth editions of the Treatise, Say did not engage in monetary analysis” (p. 7). A more cautious reader will notice that we do examine several of Say’s monetary discussions prior to the publication of the fifth edition of Traité (see, for instance, Béraud and Numa 2018, pp. 219, 220–222). Nonetheless, it is a fact that the fifth edition of Traité and Cours represented a significant shift in Say’s monetary analysis, as evidenced by the space given to monetary issues in these two texts. 

In another instance, Ahiakpor writes: “critical to the logic of Say’s argument is the fact that money (specie: gold and silver coins) also was a produced commodity.” (p. 3) This was certainly not Say’s rationale. Ahiakpor forgets that, for Say, money took the form of metal (gold and silver) and/or consisted of inconvertible paper money (papier-monnaie) (Béraud and Numa 2018, p. 225). The latter was “a real money made of paper which does not stipulate its refund, or which stipulates a merely illusory refund which is not made” (Say [1826] 2006, p. 503). Inconvertible paper money cannot be considered “a produced commodity” like specie, but it is instead still money. Moreover, Ahiakpor operates in the world of fiction when he speculates that “producers of money, as Say explains, immediately sought to exchange that commodity for other commodities for their own consumption or use…” (p. 8, emphasis added). Yet, there is no evidence of Say talking about the “producers of money;” keep in mind that gold and silver were not produced in France in Say’s time. Equally spurious is the claim that “the profits from the money’s creation enable the money producers to acquire other produced goods and services for their own consumption or to lend at interest” (p. 3). The argument is nowhere to be found in Say’s writings.

When Say published the fifth edition of Traité, he split the contents of chapter 21, book 1 (on the Nature and the Uses of Monies) into nine chapters (chapter 21 to 29). In addition to cosmetic changes, Say made significant changes to the text, particularly on the representative signs of money. The chapter on the revenue of capital also underwent important changes. Nonetheless, the principal idea remained unchanged. The value of money, just like other commodities, was determined by supply and demand. The pure interest rate—obtained after deduction of the insurance premium—was determined by the supply of and the demand for loanable funds. In the first edition of Traité, Say ([1803] 2006, p. 762) contended that increasing the quantity of money would have little to no effect on the interest rate: “people have always thought that it took more abundant money for the interest rate to fall; in reality, more abundant money or anything that represents it, barely influences, does not influence at all, the interest rate.” This passage disappeared in the subsequent editions, with no further discussion in other parts of the book. The topic resurfaced in the fifth edition, though. Drawing upon the contribution of Thomas Tooke (1826, p. 23), Say now admitted that an increase in the quantity of money could have expansionary effects through a fall in the interest rate:

When the total quantity of money rises, banknotes and other forms of paper money are usually issued in exchange for advances to the government or to individuals; the total quantity of capital funds increases, lowers the interest rate, and lowers production costs. It is true that the increase in the total quantity of money lowers its value and that, as this decline manifests itself by higher prices of goods and productive services, more abundant capital funds in nominal terms are, in reality, no longer so; but this latter effect follows the other one: the interest rate fell before the prices of goods went up and before borrowers made purchases. Thus, a growing quantity of money whose value gradually diminishes is a stimulant for industry (Say [1826] 2006, p. 507).

In Cours, Say ([1828–29] 2010, p. 479) expanded upon this idea: as the quantity of money increased faster than its value declined, more abundant money fostered sales. What Ahiakpor (p. 8) fails to grasp is that, in Say’s scenario, the expansionary effects are caused by price stickiness, nothing else. Instead of analyzing Say’s writings carefully and thoroughly, Ahiakpor persists in quoting other sources; in so doing, he fails to identify the differences between Hume, Smith, and Say. Tooke and Say’s views on the effects of an increase in the quantity of money on the interest rate and on the overall economy were predated, for instance, by Richard Cantillon ([1755] 1952, p. 118) and Hume ([1741] 1994, pp. 118–119, 134). However, there are noticeable differences on two critical points. First, Cantillon and Hume wrote about changes in the quantity of money strictly speaking (gold and silver), whereas Tooke and Say discussed changes in the quantity of monetary substitutes. In the latter scenario, the effect on the supply of loanable funds was automatic, while it was only possible in the case of Cantillon and inexistent in Hume’s passage quoted by Ahiakpor.[4] Second, as shown above, in the scenario described by Say ([1826] 2006, p. 507; [1828–29] 2010, p. 479), banks issued notes in exchange for discounting bills or providing loans; all of this effects the interest rate directly, that is, with no delay. This is quite different from the scenarios described by Hume ([1752] 1826, pp. 320, 337). Hume explicitly stated that banks did not issue notes, and he indicated that there was no effect on the interest rate.[5] In another context, Hume ([1752] 1826, p. 345) wrote about the aftermath of a conquest for the conquering country. Here too, the example differed from Say’s approach. Not only were no banknotes issued, but also changes in the interest rate were not immediate.[6] Smith ([1776] 1976, p. 354) discussed the same issue while referring to Hume’s account.

It should be noted that Say explicitly acknowledged that his analysis of the effects of monetary changes led him to reconsider some of the positions he previously held. If monetary changes affected the level of economic activity, then one could not argue that money was only a medium of exchange and that products were ultimately bought only with products. Say clearly understood the contradiction; this does not mean that he abandoned his law of outlets. Despite Ahiakpor’s assertions, Say was perfectly explicit and his words matter: “in spite of the principles that teach us that money plays only the role of a simple intermediary, and that products can ultimately be purchased only with products, more abundant money fosters all sales and the reproduction of new values” (Say [1828–29] 2010, p. 479). 

As indicated above, Say thought that the value of money was determined by supply and demand. Money demand depended on immediate cash constraints and expectations of future needs. Individuals considered how long they would hold cash; but at the same time, they had to consider the opportunity cost of holding sums of money idle, as this would entail losing out on interest. Say ([1828–29] 2010, p. 401n1) added that “any sum of money is not capital … but the money used … to cover expenses inherent to the movement of business, is part of the capital of the firm; and the portion of money that remains idle … is unproductive capital.” Say’s approach brings to mind modern contributions which postulate that money is one of the components included in the asset portfolio of individuals. In such a framework, the proportion of money holdings is a decreasing function of the interest rate. Simply put, the demand for money depends on the nominal income and on the velocity of circulation of money, the latter being a function of the interest rate.

The money market and the market for loanable funds are interdependent: an increase in the quantity of money lowers the interest rate and a rise in the interest rate reduces the desired quantity of money holdings.

IV. COUNTLESS FALLACIES AND DISTORTIONS

In the following section, we point out and correct Ahiakpor’s various misconstructions of Say’s writings. It is painfully clear that, except for the English translations of the fourth edition of Traité and of Lettres à M. Malthus, Ahiakpor has yet to read Say. To make matters worse, in several instances he overlooks some passages from these two sources which contradict his arguments. Ahiakpor also distorts and misconstrues J. S. Mill’s writings. 

The Role of Saving

By systematically portraying Say as a mere popularizer of Smith’s ideas, Ahiakpor misrepresents Say’s views on saving. He opines that we “fail to recognize Say’s (1821b, p. 39) having adopted Smith’s explanation, ‘What is annually saved is as regularly consumed as what is annually spent, and nearly in the same time too; but it is consumed by a different type of people’ (WN, 1, p. 359)” (pp. 10–11). In reality, this is a distorted rendition of Say’s position. In the passage cited by Ahiakpor, Say responded to Malthus’s assuming that saving was lost to consumption. For Say, unlike unproductive consumption, saving was a form of consumption that reproduced itself, an argument made by other classical economists including Smith; however, this is not the full story. 

Say did not completely espouse Smith’s views on saving. Though he believed that saving was the engine of capital accumulation, he was cautious not to overstate its role. He criticized Smith explicitly in that regard, just as he did in multiple instances in Lettres à M. Malthus and in other writings. Thus, in the very same source used by Ahiakpor, Say (1820, p. 72) stated: “it appears … to me, that contrary to Adam Smith, one ought not to preach parsimony.”[7] He took issue with Smith for arguing that savings were immediately and entirely invested, in clear contrast with Ahiapor’s claim. In Say’s system, there could be a lag before savings turned into investment (Numa 2020).

Say also disagreed with Smith and Malthus on what constituted savings. He made himself very clear more than once in Traité (Say [1814] 2006, p. 39; Say [1803] 2006, p. 214) and in Cours. Just like material products, Say insisted, immaterial productions could be consumed reproductively (saved) and accumulated: “this is the false idea that only material products could be saved in order to obtain durable goods, which prevented Adam Smith and several English authors after him, to think of [immaterial services] as being productive, such as those from a teacher, a lawyer or a physician” (Say [1828–29] 2010, p. 165). This is consistent with Say’s arguments on the same issue developed in Lettres à M. Malthus. Immaterial services were as productive as material productions, they were two sides of the same coin (Say 1820, pp. 32–36). Ahiakpor ascribes to Say something that he did not say. He writes: “Beyond what sellers consume from of their incomes they lend a portion (savings) in return for interest and/or dividend payments, and keep the remainder in money (cash) towards making future purchases (Say 1821a, p. 218)” (p. 4). This is pure fabrication. What Say discussed in this passage is not even close to what Ahiakpor claims. The passage appears early in chapter 21, book 1 (second page to be precise).

In fact, Say analyzed the relationship between exchange, money, and the division of labor. There is no explicit or implicit mention of sellers lending “a portion (savings) in return for interest and/or dividend payments.” 

Say’s Law and Labor

According to Ahiakpor (p. 12), “Say (1821b, pp. 22–23) vigorously objects to Malthus’s inclusion of labor services among the “commodities” he discusses in the law of markets.” Once again, the claim is absolutely false. Say never said or meant such a thing in the passage cited. What he actually wrote is this: 

Commodities, you say, are not exchanged for commodities only; they are also exchanged for labor. If this labor is a product which some sell, and others buy and consume, I shall find little difficulty in calling it a commodity, and you will find little difficulty in assimilating other commodities to this, for they are also products. Therefore, by applying to each of them with no distinction the generic term product, you will probably admit that products can only be purchased with products. (Say 1820, p. 46; original emphasis. See also pp. 26–27).

These two passages clearly debunk Ahiakpor’s claim that we “employ a model in which there are ‘four types of commodities: factor services, products, financial assets, and money’ (2018a, p. 239; italics added) rather than only produced goods and services; see also Béraud and Numa (2018b, p. 287)” (p. 12). What matters is 1) the meaning of the term product in Say’s writing: it was a good or service produced or traded at cost-covering prices, and 2) the fact that Say included all types of products and productive services in his reasoning, including labor. The truth is, the assumptions used in our model and our conclusions accurately reflect Say’s reasoning. 

J. S. Mill and the Definition of a General Glut

Ahiakpor mentions, erroneously, Say’s alleged “clarification of the impossibility of an overproduction of all goods and services, including money, at the same time” (p. 5). Nowhere Say used this ill-founded argument, which is totally fabricated. Ahiakpor quotes Mill to make his case (p. 5n2), but he blatantly misinterprets the English economist. A general oversupply or glut describes an excess supply of goods which coexists with an excess demand for money. Unlike Ahiakpor, Mill correctly understood what a general glut was. Here is what he really said:

In order to render the argument for the impossibility of an excess of all commodities applicable to the case in which a circulating medium is employed, money must itself be considered as a commodity. It must, undoubtedly, be admitted that there cannot be an excess of all other commodities, and an excess of money at the same time. But those who have, at periods such as we have described, affirmed that there was an excess of all commodities, never pretended that money was one of these commodities; they held that there was not an excess, but a deficiency of the circulating medium. What they called a general superabundance, was not a superabundance of commodities relatively to commodities, but a superabundance of all commodities relatively to money. (Mill [1844] 1967, p. 277) 

This is consistent with Mill’s characterizing an excess demand for money alongside an excess supply of goods: “Money … was in request, and all other commodities were in comparative disrepute” ([1844] 1967, p. 277). Mill did not deny the possibility of a general glut; he simply disagreed with Sismondi on whether an economic crisis was caused by overproduction. Thus, Mill ([1848] 1965, p. 574) wrote:

I have already described the state of the markets for commodities which accompanies what is termed a commercial crisis. At such times there is really an excess of all commodities above the money demand: in other words, there is an under-supply of money … there may really be, though only while the crisis lasts, an extreme depression of general prices, from what may be indiscriminately called a glut of commodities or a dearth of money. But it is a great error to suppose, with Sismondi, that a commercial crisis is the effect of a general excess of production. It is simply the consequence of an excess of speculative purchases … It is also evident that this temporary derangement of markets is an evil only because it is temporary.”  

In Mill’s mind, the general glut could occur only in the short run, nonetheless the phenomenon was indeed possible. 

V. CONCLUSION

Say believed in practical political economy, he was very much a pragmatist, not a doctrinaire. He had the courage modify his views to consider the events of his time and the contribution of others when he believed it was sound analysis. For this reason, the evolution of his thinking on outlets and on monetary issues constituted progress, absolutely not a “retrogression” as Ahiakpor asserts.

It is disturbing that Ahiakpor has drawn definite conclusions from passages that Say either recanted or removed from subsequent editions of his texts. It is equally disturbing that he systematically relies on other authors to understand Say as if Say could not speak with his own voice; this is particularly true considering that Say was very prolific, having authored several textbooks each published in multiple editions, along with many articles. There is no way around it: one must perform a thorough analysis of the primary sources to fully grasp the substance of Say’s message. It is one thing to disagree with what an author wrote; it is quite another to ignore or overlook what that author wrote. Sadly, James Ahiakpor and Steven Kates (2019) continue to take us down that road. We are confident that the readers of JHET, and more globally historians of economic thought, will not be fooled by their anti-Keynesian crusade, their only true motive. To achieve this goal, they are apparently ready to do anything, including distorting the historical record and the textual evidence.

[1] Indeed, Say’s annotations to his own copy of the fifth edition of the Wealth of Nations show that he disagreed with Smith on numerous topics (Hashimoto 1980, 1982; Forget 1993).

[2] For instance, Say (1820, p. 42) stated bluntly that, though he had been influenced by Smith, he “no longer belonged to any school.” Similarly, in Cours Say ([1828–29] 2010, p. 750) warned against following Smith’s ideas too closely. 

[3] Citation or quotation does not necessarily imply agreement. Had Ahiakpor studied all six editions of Say’s Traité, he would have noticed that, although Smith is the most-often-cited author, his references to Smith are increasingly negative. 

[4] Ahiakpor’s quote (p. 8) is delusive. In fact, Hume’s passage is devoid of any mention of potential effects on the supply of loanable funds.  

[5] Hume ([1752] 1826, p. 320) wrote: “it must be allowed, that no bank could be more advantageous than such a one as locked up all the money it received, and never augmented the circulating coin, as is usual by returning part of its treasure into commerce.” Hume ([1752] 1826 p. 337) added: “suppose that, by miracle, every man in Great Britain should have five pounds slipt into his pocket in one night; this would much more than double the whole money that is at present in the kingdom; yet there would not next day, nor for some time, be any more lenders, nor any variation in the interest.” 

[6] Hume ([1752] 1826, p. 345) wrote: “In the conquering country, it is natural to imagine, that this new acquisition of money will fall into a few hands, and be gathered into large sums, which seek a secure revenue, either by the purchase of land or by interest; and consequently the same effect follows, for a little time, as if there had been a great accession of industry and commerce. The increase of lenders above the borrowers sinks the interest, and so much the faster if those who have acquired those large sums find no industry or commerce in the state, and no method of employing their money but by lending it at interest”.

[7] In the English translation of Lettres à M. Malthus, the passage appears page 35, only a few pages before the passage cited by Ahiakpor above (page 39).

REFERENCES