Say's Law: A Rigorous Restatement

Abstract

Say’s Law has passed through various conceptual frameworks. As the next logical step, this paper provides a rigorous restatement in structural axiomatic terms. The main reason is that previous attempts have been methodologically unsatisfactory. Standard economics rests on behavioral assumptions that are expressed as axioms. Axioms are indispensable to build up a theory that epitomizes formal and material consistency. The fatal flaw of the standard approach is that human behavior does not lend itself to axiomatization. Small wonder that the accustomed attempt to explain how the economy works met with scant success. This battered also the discussion about Say’s Law.

Keywords: new framework of concepts, structure-centric, axiom set, consumption economy, Profit Law, simulation, market clearing, budget balancing

JEL Classification: B59, C63, E10