KEYNES, MILL, AND SAY'S LAW: THE LEGITIMATE CASE KEYNES DIDN'T MAKE AGAINST J. S. MILL

Abstract

Having in the General Theory quoted a passage from John Stuart Mill's Principles as representative of ancient confusion, John Maynard Keynes has been accused of misinterpreting that passage and thus mistakenly identifying Mill as an upholder of the classical proposition that supply creates its own demand. Certain critics, seizing on Keynes's misunderstanding, draw the conclusion that little was actually wrong with Mill's analysis and that Keynes's attack on Mill was therefore without justification. Our contention, however, is that, despite his error with respect, so to say, to the letter of Mill's exposition, Keynes was right about the essential substance of Mill's thesis. Mill's thinking, we suggest, was deeply in thrall to the ideas of his father and Jean-Baptiste Say. The purpose of this paper is to demonstrate that Mill did indeed stand for a classical position, albeit qualified, but nevertheless vulnerable to Keynes's critique as developed in the General Theory.