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'''Say's Law''' is the name of an economic principle attributed to French economist and businessman [[Jean-Baptiste Say]] ([[1767]]-[[1832]]). It argues that  an economy is  self-regulating, provided that all prices, including wages are flexible enough to maintain it in equilbrium.

'''Say's Law''' is the name of an economic principle attributed to French economist and businessman [[Jean-Baptiste Say]] ([[1767]]-[[1832]]). It argues that  an economy is  self-regulating, provided that all prices, including wages are flexible enough to maintain it in equilbrium.

A simplifed interpretation of the law states that supply creates demand, or in the words of Say: ''"...a product is no sooner created, than it, from that instant, affords a market for other products to the full extent of its own value."'' As such, Say's Law provided a solution to the [[General Glut]] problem that had dogged Classical Economists such as [[Adam Smith]] and [[David Ricardo]]. In it's extreme form, Say's Law essentially stipulates that it is impossible to overproduce a good, however, even Say himself eventually conceded that overproduction can occur when the cost of producing a specific product is greater than the purchasing power of the product.

A simplifed interpretation of the law states that supply creates demand, or in the words of Say: ''"...a product is no sooner created, than it, from that instant, affords a market for other products to the full extent of its own value."'' As such, Say's Law provided a solution to the [[General Glut]] problem that had dogged Classical Economists such as [[Adam Smith]] and [[David Ricardo]]. In its extreme form, Say's Law essentially stipulates that it is impossible to overproduce a good, however, even Say himself eventually conceded that overproduction can occur when the cost of producing a specific product is greater than the purchasing power of the product.

Say's Law provided the basis for a great deal of classical [[Macroeconomics|macroeconomic]] theory until it was challenged by [[John Maynard Keynes]] in the early 20th century. Keynes argued that on a macroeconomic level it is in fact demand that determines supply. Following Keynes' critique, many economists have  rejected Say's Law, however, there still exist a number of exponents, most notably the [[Supply-side Economics|supply-sider]] [[Arthur Laffer]], the [[Austrian School of Economics|Austrian School]], and [[Thomas Sowell]] of the [[Chicago School]].

Say's Law provided the basis for a great deal of classical [[Macroeconomics|macroeconomic]] theory until it was challenged by [[John Maynard Keynes]] in the early 20th century. Keynes argued that on a macroeconomic level it is in fact demand that determines supply. Following Keynes' critique, many economists have  rejected Say's Law, however, there still exist a number of exponents, most notably the [[Supply-side Economics|supply-sider]] [[Arthur Laffer]], the [[Austrian School of Economics|Austrian School]], and [[Thomas Sowell]] of the [[Chicago School]].