A Rehabilitation of Say’s Law (W. H. Hutt)
- Highlight Loc. 1626-34 | Added on Thursday, March 29, 2012, 12:34 PM
My own diagnosis of the origins of entrepreneurial forecasts “attuned to a continuation of depression” differs from Leijonhufvud’s. During this century at least, that pessimism has been, I judge, far more often justified than unjustified. Thus, in the situation to be described on pp. 135-7, entrepreneurs confronted with the depression were reacting realistically to a situation in which (i) the toleration of private duress or collusion to bring about “wage-push,” or to maintain certain prices, and (ii) so-called “unemployment insurance” and other government action tending to render certain wage-rates or prices rigid, were frustrating rapid co-ordinative adjustments and exterminating prospective yields to investments, especially in such improvements of, or additions to, fixed capital as were subject to prospective strike-threat pressures. As a whole, entrepreneurs may not have clearly perceived the causes of the situation. But their apparent timidity in so-called slump periods was always, I suggest, a consequence of the price mechanism having been prevented from fulfilling its co-ordinative role.
