CONCEPT
Say's Law
Jean-Baptiste Say's 1803 proposition that supply creates its own demand — demolished by Keynes in 1936 and demolished again by the AI economy in 2026.
Say's Law holds that every act of production generates the income necessary to purchase the output, so that the economy as a whole can never suffer from a general shortage of demand. Individual markets might experience temporary surpluses, but general overproduction is impossible. The law dominated classical economics for over a century. Keynes demolished it in the General Theory (1936) by demonstrating that income could be hoarded rather than spent, producing a breakdown of the circular flow that Say assumed. The AI economy is rediscovering Say's error in real time — and the tuition is expensive.
In The You On AI Field Guide
Say's original formulation was subtle; its caricatured version — 'supply creates its own demand' — is the one Keynes attacked. The attack demonstrated that the circular flow (production → income → demand → production) could break down through liquidity preference, through the paradox of thrift, or through collapses in animal spirits that transformed expected investment into hoarding.
The AI reapplication is exact. When the