Say's Law has been one of the principle doctrines used to support the laissez-faire belief that a capitalist economy will naturally tend toward full employment and prosperity without government intervention.Some who question the validity of Say's Law also have their doubts about capitalism in general, so I googled capitalism and found "An economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than the state." Which in turn reminded me of a long-lingering question: have capitalism's critics taken into account, that much of what defines present day wealth, actually lies outside of this (basic) definition of capitalism?
Or, put another way: if capitalism "gets the blame", what exactly is "at fault"? Are we to blame capitalism for the shenanigans of finance, which is an entirely different set of problems? Perhaps the most concerning issue for "trade and industry" is that these institutions can't always be relied on, to maintain jobs in specific places for specific populations. But by the same token, neither can populations be counted on to want any given product that these industries may produce, for any length of time!
Carried a bit further: why should any population be expected to consume a particular product they no longer want? Or, how often has local employment and investment flourished for decades, due to a corporation's fortuitous ability to command a global market, even though such gain ultimately proved temporary? For twentieth century corporations, mass production often meant that local consumption was simply not enough to keep going as a business enterprise. The latter thought is also the other side of the coin for protectionism, despite the fact that citizens associate companies as national entities.
Instead of expecting the traditional corporate entity (with its relatively fixed supply structure) to provide lifetime employment, why not build a new corporation for local communities, one for which survival need not be put at risk by shifting consumer preferences? An internalized supply and demand framework could provide local economic stability, and an inclusive knowledge use continuum over time. However, a completely different set of organizational factors - hence expectations in terms of outcome - are at stake. Organizational capacity such as this has yet to be set into motion.
Whereas many resources are capable of mobility, time based product is in many respects location dependent. Products which include time value and knowledge use, have yet to benefit from extensive local support and mutual commitment. Thus far, however, both public and private education have moved society in precisely the opposite direction. Indeed, education is often perceived as means to "escape" underperforming communities and regions, instead of generating positive economic complexity in the midst of our actual habitats. Today's formal education contributes to this escape mentality, by externalizing or isolating skills potential, and further exacerbating what are already existing differences in human capital.
No good purpose is served, to suggest capitalism needs to be replaced because it appears deficient in providing long term employment stability. Especially whenever a definitive aspect of product supply, calls for a relatively mobile set of organizational capacity, in order to take place. For all intents and purposes, the organizational capacity which generates tradable sector flows, functions fairly well at a basic level.
Rather than imposing further restrictions on the resource mobility of tradable sectors, governments need to closely reexamine the nature of their involvement in non tradable sector activity. Non mobile characteristics of non tradable sectors have been hijacked by wealth capture too many times, which explains why income potential has stagnated in recent decades. In many instances, the crony coalitions of government and non tradable sectors have flatlined income, in ways that threaten to undermine centuries of prosperity.
Citizens, not governments, hold the ultimate responsibility for defining demand, even though the monetary systems of their governments are solely responsible for backing already existing aggregate demand. In particular, a higher level of demand based growth than is presently being experienced, is something that individuals will need to rediscover, and recreate, for themselves. This growth potential is not to be confused with arbitrary wage increases or more government involvement in the economy.
It's time for governments to make more economic room for their citizens to use the knowledge that they have invested in so heavily, especially in recent decades. Otherwise, the rationale for higher education will slowly become more dubious over time. There is little point in deriding the concepts of capitalism or Say's Law, especially given the fact considerable room was made for more employment in the twentieth century, via an expanded educational structure. Now, the fruits of all that knowledge investment, deserve their own place in the sun, with a marketplace for time value.