President Franklin Roosevelt's "New Deal" has long been credited with rescuing the US from the Great Depression of the 1930s. While digging up material for tonight’s discussion on the Great Depression, I uncovered this presentation by economics scholar Lee Ohanian, Professor of Economics at UCLA, who challenges the conventional wisdom in a provocative examination of FDR's economic policies.
It recalls to mind Steven Kates’s argument “There is no such thing as an independent force that can be described as aggregate demand.”
If you want to get to the essence of Say’s Law you must never think in terms of aggregate demand and aggregate supply. Just drop it from all conceptual discussions of the economy and I think, although I can’t be sure, you will find yourself necessarily thinking about issues in the same way as the classical economists. As I have argued in my Say’s Law and the Keynesian Revolution (Elgar 1998), if you want to defeat Keynesian economics, you need to wage war on the very notion of aggregate demand. Nothing else will do.