"Drop the Dead Donkey": a Response to Steven Kates on the Subject of Mill's Fourth Proposition on Capital

Roy H Grieve

Research output: Working paperDiscussion paper

Abstract

Steven Kates has recently (2015a) attempted to explain and justify J S Mill's paradoxical "fourth proposition on capital", which states that "demand for commodities is not demand for labour", a proposition which notoriously – over generations – has baffled many eminent commentators. Kates intends to resolve the puzzle by offering "a proper understanding of Say’s Law as it was understood by Mill and his contemporaries." We conclude that Kates does indeed reveal the logic of Mill's proposition, making it clear that from Mill's lost "supply-side" perspective, it is in no way puzzling or paradoxical. However, at the same time it becomes evident that Mill's whole position is undermined by his acceptance of the untenable belief that "demand is constituted by supply", which leaves us with the clear understanding that his fourth proposition, despite Kates's rationalisation and defence thereof, as well as certainly being paradoxical, is simply untrue.
Original languageEnglish
Place of PublicationGlasgow
PublisherUniversity of Strathclyde
Pages1-13
Number of pages14
Volume16
Publication statusPublished - 2016

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Keywords

  • Mill's fourth proposition on capital
  • Say's law
  • wage-fund theory
  • Steven Kates

Cite this

Grieve, R. H. (2016). "Drop the Dead Donkey": a Response to Steven Kates on the Subject of Mill's Fourth Proposition on Capital. (03 ed.) (pp. 1-13). Glasgow: University of Strathclyde.