Say’s Law argues that the ability to purchase something depends on the ability to produce and the wealth. In order to have something to buy, the buyer has to get something to produce and sell. Thus, the source of demand is production, not the money itself. Therefore, production drives economic growth.
Say drew four main conclusions.
- More producers would boost the economy.
- If members of the society do not produce would drag the society.
- Business entities with trading are benefitial when they near each other.
- Encouraging consumption is harmful. Production adn accumulation of goods constitutes prosperity, but consuming without producing eat away the economy.
The implication is that government should support and control production rather than consumption.