Overcapacity and undercapacity
The third brief in our series on big economic ideas looks at Say’s law
IN 1804 Jean-Baptiste Say enrolled in the National Conservatory of Arts and Crafts in Paris to learn the principles of spinning cotton. The new student was 37 years old, points out his biographer, Evert Schoorl, with a pregnant wife, four children and a successful career in politics and letters trailing behind him. To resume his studies, he had turned down two lucrative offers from France’s most powerful man, Napoleon Bonaparte. The ruler would have paid him handsomely to write in support of his policies. But rather than “deliver orations in favour of the usurper”, Say decided instead to build a cotton mill, spinning yarn not policy.让-巴蒂斯特·萨伊(Jean-Baptiste Say)于1804年入读巴黎国立工艺学院(National Conservatory of Arts and Crafts)，学习棉纺原理。传记作家埃夫特·斯古勒(Evert Schoorl)指出，这名新生37岁，带着怀孕的妻子和四个孩子，此前他在政界和文坛已颇有建树。为继续自己的学业，萨伊两次拒绝了法国最有权势的人拿破仑·波拿巴(Napoleon Bonaparte)发出的条件优厚的邀请。这位统治者愿以优渥的报酬请萨伊撰文支持自己的政策。但萨伊没有“为篡权者发声”，而是决定建一家棉纺厂，纺纱线而不是编政策。
Napoleon was right to value (and fear) Say’s pen. As a pamphleteer, editor, scholar and adviser, he was a passionate advocate for free speech, trade and markets. He had imbibed liberal principles from his heavily annotated copy of Adam Smith’s “The Wealth Of Nations” and bolstered his patriotic credentials in battle against Prussian invaders. (During breaks in the fighting, he discussed literature and political economy with other learned volunteers “almost within cannonballs’ reach”.)拿破仑看重(且畏惧)萨伊的文笔，这是对的。作为檄文作者、编辑、学者和顾问，萨伊积极倡导自由言论、自由贸易及自由市场。他从自己那本写满评注的亚当·斯密的《国富论》中汲取自由主义思想，在对抗普鲁士侵略的战斗中强化了自己的爱国形象。(在战斗间隙，他与其他博学的志愿者讨论文学和政治经济学，而“炮弹几乎就在脚边炸开”。)
His greatest work was “A Treatise on Political Economy”, a graceful exposition (and extension) of Smith’s economic ideas. In Say’s time, as nowadays, the world economy combined strong technological progress with fitful demand, spurts of innovation with bouts of austerity. In France output of yarn grew by 125% from 1806 to 1808, when Say was starting his factory. In Britain the Luddites broke stocking frames to stop machines taking their jobs.他最伟大的著作《政治经济学概论》(A Treatise on Political Economy)精妙阐述(并发展了)亚当·斯密的经济学理念。萨伊所在的时代跟现在一样，世界经济在技术方面有长足的进步但需求时起时落，创新迸发而经济紧缩频现。1806至1808年间，法国的纱线产量上升了125%，而萨伊的纺纱厂正是在那时起步。在英国，卢德分子捣毁织袜机以阻止机器抢走自己的工作。
On the other hand, global demand was damaged by failed ventures in South America and debilitated by the eventual downfall of Napoleon. In Britain government spending was cut by 40% after the Battle of Waterloo in 1815. Some 300,000 discharged soldiers and sailors were forced to seek alternative employment.另一方面，因在南美扩张失利，全球需求受损，而拿破仑的最终垮台更令需求萎靡不振。1815年滑铁卢战役后，英国政府削减了40%的开支。约30万名退役士兵和水手被迫另谋出路。
The result was a tide of overcapacity, what Say’s contemporaries called a “general glut”. Britain was accused of inundating foreign markets, from Italy to Brazil, much as China is blamed for dumping products today. In 1818 a visitor to America found “not a city, nor a town, in which the quantity of goods offered for sale is not infinitely greater than the means of the buyers”. It was this “general overstock of all the markets of the universe” that came to preoccupy Say and his critics.结果便是一轮产能过剩，在萨伊那个年代人们称之为“全面生产过剩”。英国货被指责充斥了从意大利到巴西的各个外国市场，就和今天中国被指向全球倾销商品一样。1818年，来到美国的一位访客发现“待售商品的数量总是大大超出购买者的财力，每一城镇莫不如此”。 “全球各个市场的全面过剩”成为萨伊及其批评者的关注焦点。
In trying to explain it, Say at first denied that a “general” glut could exist. Some goods can be oversupplied, he conceded. But goods in general cannot. His reasoning became known as Say’s law: “it is production which opens a demand for products”, or, in a later, snappier formulation: supply creates its own demand.试图解释该现象时，萨伊先是否认可能存在“全面”过剩。他承认有些商品可能供应过剩。但商品不会全面过剩。他的理论如今被称为萨伊定律：“生产自行开启了对产品的需求”，或套用后期更简明的表述：供给自行创造需求。
This proposition, he admitted, has a “paradoxical complexion, which creates a prejudice against it”. To the modern ear, it sounds like the foolhardy belief that “if you build it, they will come”. Rick Perry, America’s energy secretary, was ridiculed after a recent visit to a West Virginia coal plant for saying, “You put the supply out there and the demand will follow.”他承认，这一理念“有一种矛盾的特性，令人产生偏见 ”。在现代人听来，这个定律有点像“做出了东西，就自然会有人要”这种愚勇的信念。最近美国能源部长里克·佩里(Rick Perry)在访问西弗吉尼亚一家火力发电厂时发表的言论备受嘲讽。他说，“你供应了，需求自然就来了。”
To grasp Say’s point requires two intellectual jumps. The first is to see past money, which can obscure what is really going on in an economy. The second is to jump from micro to macro, from a worm’s eye view of individual plants and specific customers to a panoramic view of the economy as a whole.要理解萨伊的观点，需要做两次思维跳跃。第一，要超越金钱看问题，因为金钱会掩盖经济体内的实际情况。第二是从微观跳跃至宏观，从细观个别工厂和某些顾客转向俯瞰经济全景。
Firms, like coal plants and cotton mills, sell their products for money. But in order to obtain that money, their customers must themselves have previously sold something of value. Thus, before they can become a source of demand, customers must themselves have been a source of supply.
What most people sell is their labour, one of several “productive services” on offer to entrepreneurs. By marshalling these productive forces, entrepreneurs can create a new item of value, for which other equally valuable items can then be exchanged. It is in this sense that production creates a market for other products.
In the course of making his merchandise, a producer will pay wages to his workers, rent to his landlord, interest to his creditors, the bills of his suppliers and any residual profits to himself. These payments will at least equal the amount the entrepreneur can get for selling his product. The payments will therefore add as much to spendable income as the recipients’ joint enterprise has added to supply.
That supply creates demand in this way may be easy enough to grasp. But in what sense does supply create its “own” demand? The epigram seems to suggest that a coal plant could buy its own coal—like a subsistence farmer eating the food he grows. In fact, of course, most producers sell to, and buy from, someone else.
But what is true at the micro level is not true at the macro level. At the macro level, there is no someone else. The economy is an integrated whole. What it purchases and distributes among its members are the self-same goods and services those members have jointly produced. At this level of aggregation, the economy is in fact not that different from the subsistence farmer. What it produces, what it earns, and what it buys is all the same, a “harvest” of goods and services, better known as gross domestic product.