ABSTRACT
An old expression says, “If it ain’t broke, don’t fix it.” Economists by the drove have recently taken this message to heart and concluded that in the industrialized market-oriented economies we have spent a disastrous half-century trying to fix systems that have nothing wrong with them after all. My generation was taught that John Maynard Keynes’s special genius was to develop macrotheory on which useful macropolicy might be based. His unique contribution was to drop the unrealistic assumptions adhered to so tenaciously by his neoclassical fellow economists—Say’s Law of Markets and full employment of all resources in all but the most trivial short-run and self-correcting circumstances. Economists of the fifties and early sixties specialized in attacking Say’s Law. In retrospect, institutionalists missed a golden opportunity to make a point with the mainstream. Say’s Law requires, if it is to remain both valid and operational, that the economy—including both its technological and institutional underpinnings—function smoothly. The possibility that a technologically producible supply and an institutionally sanctionable demand might not at all times mesh perfectly is something that any institutionalist would have expected but that neoclassical economists, with their fixation on market clearing, have had trouble confronting.
