Note 216-3 — Chapter I

Precisely the same commercial crisis, that of 1817 seq., which more than anything else led Sismondi to the conclusion that too much had been produced in all branches of trade, may most readily be reduced to Say's theory.

There was then a complaint, not only in Europe but also in America, Hindoostan, South Africa and Australia, of the unsaleableness of goods, overfull stores, etc.; but this, when more closely examined, was found to be true only of manufactured articles and raw material, of clothing and objects of luxury; while the coarser means of subsistence found an excellent market, and were sold even at the highest prices. Hence, in this case, there was by no means any such thing as over-production. The trouble was that in the cultivation of corn and other similar products, too little was produced. There was a bad harvest even in 1816.

The most important authorities in favor of the possibility of a general glut are Sismondi, N. Principes, IV, ch. 4, and in the Revue encyclopédique, Mai, 1824: Sur la Balance des Consommations avec les Productions. Opposed by Say in the same periodical (Juilliet, 1824); where the controversy was afterwards reopened in June and July, 1827, by Sismondi and Dunoyer. Compare Etudes, vol. I; Ganilh, Théorie, II, 348 ff.; Malthus, Principles, II, ch. 1, 8. Compare Rau, Malthus and Say, über die Ursachen der jetzigen Handelsstockung, 1821. Malthus' views were surpassed by Chalmers, On Political Economy in Connexion with the moral State of Society, 1832. But even Malthus himself in his Definitions, ch. 10, No. 55, later, so defined a "general glut" that there could be no longer question of his holding to its universality. For an impartial criticism, see especially Hermann, Staatsw. Untersuchungen, 251, and M. Chevalier, Cours, 1, Leçon, 3.