Principles of Political Economy (Malthus)
Encyclopedia
Principles of Political Economy (1820) was a successful book by Thomas Malthus
(1766-1834). The last chapter of the book was devoted to rebutting Say's law
, and argued that the economy could stagnate with a lack of "effectual demand". In other words, wages if less than the total costs of production cannot purchase the total output of industry and that this would cause prices to fall. Price falls cause incentives to invest, and the spiral could continue indefinitely.
Thomas Malthus
The Reverend Thomas Robert Malthus FRS was an English scholar, influential in political economy and demography. Malthus popularized the economic theory of rent....
(1766-1834). The last chapter of the book was devoted to rebutting Say's law
Say's law
Say's law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say , who stated that "products are paid for with products" and "a glut can take place only when there are too many means of production applied to one kind...
, and argued that the economy could stagnate with a lack of "effectual demand". In other words, wages if less than the total costs of production cannot purchase the total output of industry and that this would cause prices to fall. Price falls cause incentives to invest, and the spiral could continue indefinitely.