Say’s Law of Markets

Say's Law, an economic principle attributed to Jean-Baptiste Say, posits that the production of goods inherently creates the demand for other goods. In simpler terms, supply creates its own demand.12

This means that a general oversupply of goods in an economy is unlikely to persist long-term because the very act of producing goods generates income, which is then used to purchase other goods. While Say believed imbalances would self-correct as producers adapt to consumer preferences, he also appeared to believe that short-term overproduction was impossible, a notion later challenged by economists like Thomas Malthus and John Maynard Keynes.2