It always used to be said that no political idea should be regarded as totally discredited until it had been embraced by the post-1997 British Labour Party. But now a new challenger has arisen for the role of hospice for dying lunatic ideas of the Right: the (nominally) Socialist Party of France.
François Hollande’s bizarre everything-except-my-private-life press conference last week was mostly about his Turn to the Right, and it provoked a lot of analysis of how, if at all, that varied from where he already was. But it was also remarkable for being the first occasion in modern times where a political leader has specifically embraced an embarrassingly out of date economic theory that even right-wing American economists no longer like to be seen in company with.
I’m referring of course to Say’s Law, named after the (French would you believe?) economist Jean-Baptiste Say (1767-1832) who expressed it by saying “supply creates its own demand”. And yes, Hollande used exactly those words.
What this “law” means in practice is that there is never a problem with inadequate demand. You and I might think that the shops are empty and the factories are closing and unemployment is at stratospheric levels because there isn’t enough demand for goods and services in the economy. No, says Say (and by implication Hollande) it’s because people don’t want to work and don’t want to spend money. So the cure is … well, we’ll get back to you on that.
It’s hard to explain just how antique and antediluvian this idea is. As a rough comparison, imagine that Hollande justified French intervention in Africa by referring to scientific proof that Africans were less intelligent than whites, and you’ll perhaps have some idea.
Do we laugh or do we cry? Hollande, a basically decent man, has made a fool of himself with his motor scooter, crash-helmet wearing romantic escapades. Does he have to destroy himself and his party intellectually and politically as well?