Say's Law

[turquino]

Does anyone know some good criticisms of Say’s Law? According to Say’s Law each commodity provides the means of purchasing another – commodities are paid for with other commodities. An oversupply of one commodity only means an increased demand for others. Since there cannot be a failure of aggregate demand, general _overproduction_ and mass unemployment become impossible. Clearly this contradicts reality, but the ‘law’s’ defenders claim that intervention has prevented the flexibility of prices to reach market-clearing levels. According to them, if mass unemployment exists it’s because wages have been prevented from falling by trade unions and labour laws. It should be clear why socialists have an obligation to respond to this faulty theory and its right-wing advocates’ attack on the working class.

[Lynx]

A market-clearing price is unlikely to be profitable, so why would it matter?
Depressing wages decreases purchasing power, as well as discretionary spending. To put Say's Law to the test, unions and minimum wage laws would have to be abolished.

[BostonCharlie]

One hole in Say's Law is that since money purchases commodities and commodities are produced with money (M-C-M) and money is not an ordinary commodity (if indeed it is one at all,) then any games played purely with money creates a 'leak' in Say's closed cycle.

Things like simple hoarding or pure financial speculation unrelated to commodity production are some obvious leaks.

[turquino]

A market-clearing price is unlikely to be profitable, so why would it matter?
Depressing wages decreases purchasing power, as well as discretionary spending. To put Say's Law to the test, unions and minimum wage laws would have to be abolished.
I’m not sure I understand. You aren’t advocating abolishing minimum wage laws and outlawing unions?


One hole in Say's Law is that since money purchases commodities and commodities are produced with money (M-C-M) and money is not an ordinary commodity (if indeed it is one at all,) then any games played purely with money creates a 'leak' in Say's closed cycle.

Things like simple hoarding or pure financial speculation unrelated to commodity production are some obvious leaks.
Yes I think you’re right about money being the hole in Say’s law. Say’s law of markets imagines money is only a medium of exchange to purchase other consumables like in Marx’s C-M-C model. But this is a model of society where there is only simple trade and producers produce with consuming another commodity in mind. However in large scale production for the market the circuit looks like M-C-C’-M’. Capitalists don’t produce because they have some things they want to buy at the end of day. Rather, they are compelled to sell their commodities (C’) in the market and realize their value in money so as to arrive back at M. They don’t care about realizing exchange values for personal consumption, but in accumulating a specific commodity: money. Since all the commodities have to be sold for this money commodity, an increase in the demand for money relative to its supply (like as you mentioned with simple hoarding) will result in a drop in relative demand for every other commodity. General overproduction and economic crisis result.

I think it’s because adherents to Say’s law ignore Marx’s M-C-M circuit and think capitalism is all simple trading that they go all wrong. This would explain why Marx believed overproduction did not occur in early capitalism because there wasn’t much big production for the market.

[zerozerozerominusone]

Does anyone know some good criticisms of Say’s Law? According to Say’s Law each commodity provides the means of purchasing another – commodities are paid for with other commodities. An oversupply of one commodity only means an increased demand for others. Since there cannot be a failure of aggregate demand, general _overproduction_ and mass unemployment become impossible.


This is not quite what Say's law says, but let us not split hairs here. One vital part you have left out is that the law holds true in a purely free market. Because there are no purely free markets anywhere on the planet of which I am aware, short of various black markets (and even many or even all of those are not really free because they are sub-rosa and its participants prone to "state" violence if caught transacting business there), any refutation of the law would be purely speculative at best.


Clearly this contradicts reality, but the ‘law’s’ defenders claim that intervention has prevented the flexibility of prices to reach market-clearing levels.
At the very least, the notion is untested and untestable due to the effectively universal absence of true free markets worldwide. One must bear in mind that just because I call a fish a dog, it does not follow that a fish in indeed a dog. It would follow, however, that I am lying through my teeth on that point. Similarly, "free trade" has nothing to do with free markets. It depends, in fact, on highly interfered-with markets. For example, the rush to China continues for one reason: labor rates remain artificially low there due to heavy state interference with the markets. Free markets only work when all interacting markets are free. China's market is clearly not free. If you doubt this, I recommend you become a Chinese national, get a job in a factory, and then attempt to form a labor union. You will meet with one of two fates: "reeducation" or a bullet in the back of your head, courtesy of the state. Were China's labor markets free, the average national labor rate would not be anywhere near 66 cents per hour. By now it would be approaching US minimum wage, at the very least.

The lesson here is that one must fully understand what is meant by "free market" in any given context. Many are fond of asserting that free-markets have demonstrably failed in the wake of the Clinton and Bush^2 administrations' policies. This is pure nonsense because, once again, our markets have been anything but free. Therefore, what has failed is something other than free markets, and in fact what has failed are regulated markets - and markets regulated to the advantage of certain players, no less.



According to them, if mass unemployment exists it’s because wages have been prevented from falling by trade unions and labour laws. It should be clear why socialists have an obligation to respond to this faulty theory and its right-wing advocates’ attack on the working class.The theory cannot be proven faulty at this point in history because the proper conditions under which they should function have not existed during the lifetimes of anyone currently living on this planet. One cannot heavily regulate a market in all manner of distorted ways and then say that the free markets do not work. This is similar to yanking the engine out of your car and then complaining to the manufacturer that it will not operate. It is not a reasonable position.

The institution of truly free markets would be a monumental task - not so much in material or even administrative terms, but in terms of national will. The gross ignorance of economics by the general populations of nearly any nation you care to name nearly guarantees that a true free market economy will never be realized, and therefore laws such as that of Says will never be provable one way or the other. Those at the top of the various heaps, whether communist/socialist, fascist, or capitalist, are highly uninterested in free market economics, for such a change in the status quo would pose a threat to their positions in the grander schemes of things. Don't fool yourself in believing otherwise. At the very top, there are no differences between the players. They are an incestuous little cadre who know the game well and have no reason to see it change. They will, in fact, murder legions to preserve what they have. Lenin and Stalin did it. Every US president since Lincoln did it. Hitler did it. Mao did it. Every British king and/or PM for the past 250 years did it, and the list could go on quite a bit further, but perhaps the point is made.

It is the pinnacle of folly to declare as unworkable something which has never been properly attempted, and that is precisely the case with free market capitalism. Never been done. Ever. And we are farther away from it now than any time in the past 200 years - that much I can guarantee you.

[Lynx]

I’m not sure I understand. You aren’t advocating abolishing minimum wage laws and outlawing unions?
I advocate putting Say's Law to the test. Unions and minimum wage laws cause market distortion. It stands to reason they would have to be abolished, either legally or 'naturally'. Unions ~ monopolies on labour.
Unfortunately, as "000-1" points out, the penultimate free market test is unlikely to ever be carried out (least of all on a global scale). Hence, the debate and speculation will continue.

Back in the real world, laissez-faire policies have been benched. The reaction to the financial crisis has been interventionist and stimulative.

[turquino]

This is not quite what Say's law says, but let us not split hairs here. One vital part you have left out is that the law holds true in a purely free market. Because there are no purely free markets anywhere on the planet of which I am aware, short of various black markets (and even many or even all of those are not really free because they are sub-rosa and its participants prone to "state" violence if caught transacting business there), any refutation of the law would be purely speculative at best.
I thought the existence of markets was implied but if you have a better definition of Say’s law please impart it.

I vigorously disagree with your claims that Say’s law is only speculative in the absence of‘purely free markets’. If JB Say himself believed that the smallest amount of intervention in the market falsified all its laws, why should he have bothered arguing that commercial crises were not the result of a lack of money as the mercantilists claimed? He tried to make the point that there could be no crises of overproduction but only temporary crises of ‘disproportionality’, and not that crises existed because his law wasn’t permitted to apply itself. Nevertheless he was wrong.As marxists, we know that failures of capitalism are not because the alleged stability of laissez faire markets have been impinged, but because market capitalism is an inherently unstable system, and this cannot be abolished barring a transformation to social ownership of the means of production. The entire history of capitalism has been one of recurrent crises under conditions of both relatively free markets and regulated markets. In my last post I gave a possible explanation for overproduction, a refutation of Say’s law, and I think you will see that it is not dependent on either an absence or stifling amount of interference in the market. Needless to say I’m unconvinced by this agnostic position you’ve taken that says we can’t go about refuting Say because some impossibly high standards haven’t been met -- even if my own response is pure speculation.


I advocate putting Say's Law to the test. Unions and minimum wage laws cause market distortion. It stands to reason they would have to be abolished, either legally or 'naturally'. Unions ~ monopolies on labour.
Unfortunately, as "000-1" points out, the penultimate free market test is unlikely to ever be carried out (least of all on a global scale). Hence, the debate and speculation will continue.

Back in the real world, laissez-faire policies have been benched. The reaction to the financial crisis has been interventionist and stimulative.
Then why are you here? Workers organized themselves into unions and fought for restrictions on the 'freedom' of capital because they didn't want to work 16 hour days for the barest of wages. It's almost a truism that what's good for workers is bad capitalists, and what's good for capitalists is bad for workers.

[Lynx]

Then why are you here? Workers organized themselves into unions and fought for restrictions on the 'freedom' of capital because they didn't want to work 16 hour days for the barest of wages. It's almost a truism that what's good for workers is bad capitalists, and what's good for capitalists is bad for workers.
A free market would be bad for capitalists. If Say's Law is wrong, society would find itself in a revolutionary situation, as the economy imploded and workers revolted. At the very least we would be closer to instituting socialist free markets, or mutualism. For all we know, mutualism may be the only stable form of free markets and the only one where Say's Law can work.

Of course, none of this will happen until the parasitic class are removed from power.

[Bethechange]

Interesting point about mutualism, or the socialist free market. It may be the only place where this would actually work, I agree. The 1800s is the closest we have ever gotten and probably will get to pure capitalism, and it was awful. Say's Law apparently did not work there, but what does "success" mean for it? Despite complaints about the Federal Reserve by neo-capitalists, it serves the same function artificially-keeping a high unemployment rate. Otherwise, people get uppity. Conversely, the rate cannot be too low-as in the Great Depression-as social unrest (perhaps even rebellion) will occur. This was the constant occurrence in the 19th century-massive booms and crashes, along with frequent bloody unrest. Laissez-faire capitalist proponents claim real wages rise while apparent ones fall, but that does not appear true historically. Only as minimum wage laws were made did wages set above that standard. Without a reformist New Deal to shore up capitalism, the US would likely have fallen into civil war, ending in Bolshevik or more likely fascist dictatorship.

[Lynx]

The New Deal was an attempt to stabilize an unstable system. Inequalities in income and spending power drive the economy towards monopolism and other distortions. I believe Say's Law requires an economic structure that prevents any group (or class) from gaining a permanent or overwhelming advantage over its competitors. Only then would you have the potential for a stable market whose main purpose would be the exchange of desired goods and services. But don't hold your breath!

[zerozerozerominusone]

I thought the existence of markets was implied but if you have a better definition of Say’s law please impart it.

"Market" and "free market" are not necessarily the same thing, the latter being subsumed by the former. Just to say "market" tells us nothing vital. To specify a free market, and I mean a real one, not this ridiculous nonsense that is part and parcel of the "free trade" movement, which amounts to nothing more than a corporate-fascist hegemony.



I vigorously disagree with your claims that Say’s law is only speculative in the absence of‘purely free markets’. If JB Say himself believed that the smallest amount of intervention in the market falsified all its laws, why should he have bothered arguing that commercial crises were not the result of a lack of money as the mercantilists claimed? He tried to make the point that there could be no crises of overproduction but only temporary crises of ‘disproportionality’, and not that crises existed because his law wasn’t permitted to apply itself.

I don't see how this invalidates the requirement of a free market. If you look at the history of the various market "failures" in, say, the USA since 1929, you will find that these were in fact not market failures at all. They were purposeful assaults on the the markets by those with special leverage in them. The purpose was fairly obvious - to destroy the perceived values of assets so that they would be able to buy them up for a penny or two on the dollar when those with no market power found themselves in a tight corner. These were overt acts of fraud and theft, not organic failures of the market.


As marxists, we know that failures of capitalism are not because the alleged stability of laissez faire markets have been impinged, but because market capitalism is an inherently unstable system,

I don't know where you learned you economics and history, but they did you a great disservice. The failures you vaguely cite, if I take your intended meaning correctly, were due precisely to impingement by those who held privileged market power over all others. Paul Warburg, Morgan, etc. were not boyscouts. They were not even capitalists in what I will call the normal sense of the word. They were globalists. In 1920 Warburg said "we will have world government whether we like it or not". This statement is most unequivocal and was a major giveaway as to that cadre's intentions. So confident they are of their success, they have shown little reservation in hiding their intentions. Remember Bush^1 and his quip about the "new world order"? Do you think that was just a casually tossed statement? You would have to be very foolish to believe it.

Prior to the American Civil War, the stability and power of the free markets of the USA were the envy of the world. No other nation could hold a candle to our economy, and this remained so even after the vampires of international banking latched themselves onto our necks in 1913 and began their perfidious work. Even Roosevelt's incredibly flawed acts of crypto-socialism, the acts that converted the market failure of 1929 from a would-be fart in the winds of history into a 13 year long spell of misery and strife could not bring this nation down.

It has taken until 2008 and acts of unparallelled daring on the part of the power elite to finally put this nation's economy into a position of true peril. Nothing is indestructible, not even our economy. But compare this with that of the Soviet Union - in a mere 75 years they were utterly destroyed as an economy and the great egalitarian empire folded like a cheap suit. China, OTOH, has been far and away more pragmatic than were the Soviets. They are smart people and they know full well that a capitalist market is the only way to prosperity. Were this not the case, they would not have adopted the economic model. This is plain observed truth - not theory. It is fact - China is an authoritarian capitalist state. The authoritarian part will perhaps be its undoing in the end if they do not wise up, but time will provide the only means of knowing.


and this cannot be abolished barring a transformation to social ownership of the means of production. The entire history of capitalism has been one of recurrent crises under conditions of both relatively free markets and regulated markets.

And once again I must respectfully point out that your knowledge on this point is fundamentally flawed. You appear to believe that free markets failed organically. They did not. I can, in theory, go to Africa with my .600 Nitro express rifle, train on the head of an organically sound elephant and blow its life into oblivion. The great creature's death will not have been the result of an organic failure of the beast's system except that an outside influence, the 800 grain projectile traveling at 1500 feet per second, impinged upon a vital subsystem and caused immediate and fatal failure. Such has been the history of the market failures in the USA. Every last one, and there are no exceptions of which I am aware, were caused by malicious interference. Consider the failures in international trade when Smoot-Hawley passed - for what, 4 years the economies of the USA and Europe went into a death spiral as the tariff war raged between the continents. This wasn't an organic failure of the free markets - it was the result of two imbeciles managing to convince congress to enact insane legislation that even economists of the day knew would cause terrible problems. The litany of such third party impingement is pretty long and very convincing.

As to "socializing" the means of production, what does that really mean? The classical meaning is that nobody is boss - there is no division of labor, etc. Elimination of the division of labor would be a disaster for the world and literally billions of people would die as a result of it. Is that what you advocate?


In my last post I gave a possible explanation for overproduction, a refutation of Say’s law, and I think you will see that it is not dependent on either an absence or stifling amount of interference in the market. Needless to say I’m unconvinced by this agnostic position you’ve taken that says we can’t go about refuting Say because some impossibly high standards haven’t been met -- even if my own response is pure speculation.

Without a rational basis for holding an opinion, an opinion cannot be given much weight.

I might also point out that the standard I put forth as a requirement for capitalism to live up to its promise, a free market, is not impossibly high by any means. All that is required is to put it into place and disallow all interference with it. The difficulty here lies in the lack of political will and an ignorant, complacent population, which the elite were more than happy to help paint themselves into that corner. No dictator wants a smart population. This is why intellectuals have been the prime targets during revolutions.

[zerozerozerominusone]

A free market would be bad for capitalists.

If I may gently correct you here a bit - a free market would be bad for rigged-market capitalist mobsters. It would be great for free market capitalists.

[Lynx]

If I may gently correct you here a bit - a free market would be bad for rigged-market capitalist mobsters. It would be great for free market capitalists.
Access to capital would have to be democratically approved and periodically renewed.

[Invariance]

Yes, you're right Turquino, Say's Law (which lives on in economics via Walras' Law) ignores the very nature of capitalist production, that it is a system which aims at the accumulation of capital, hence wishes to throw x amount into production and gain a surplus from that.

What exactly did Say state:

‘Every producer asks for money in exchange for his products, only for the purpose of employing that money again immediately in the purchase of another product; for we do not consume money, and it is not sought after in ordinary cases to conceal it; thus, when a producer desires to exchange his product for money, he may be considered as already asking for the merchandise which he proposes to buy with this money. It is thus that the producers, though they have all of them the air of demanding money for their goods, do in reality demand merchandise for their merchandise’ (Say, 1821).
Essentially, Say's core proposition is that overall balance is assured because ‘the sale of goods and services to the market is the source of the income from which purchases are financed.' This, according to the classical (and neoclassical) economists, meant that there could never be a slump due to an overall deficiency in demand.

Instead, slumps, when they occurred, were due to sectoral imbalances.

Money was treated as a commodity and it was possible that many people would want to hold money and very few would want goods. There could then be a serious slump, as producers of goods found that people did not want to part with their money. Physical commodity markets and the labour market could then be in excess supply – with unsold goods and unemployed workers – but this would be because of the excess demand for money, and not because of any overall deficiency of aggregate demand. In the aggregate, demand and supply would be in balance.

Its modern definition (Walras' Law) is that ‘the sum of all notional excess demands is zero.’ The modern argument starts from the proposition that, on the average, agents in a market economy are neither thieves (who want more than they give) nor philanthropists (who want to give more than they get).

Therefore, the normal agent will intend to have balanced supplies and demands: the value of what she wishes to sell will equal the value of what she wishes to buy, so that ‘the sum of her notional excess demands is zero.’ The excess demand for any single product by a single agent can be positive – so that the agent wishes to be a net buyer of that product – or negative – so that the agent wishes to be a net seller. However, in sum, her excess demands will be zero. The balance at the level of the individual agent necessarily carries over to the aggregate of all agents: if the intended excess demands of each individual agent sum to zero, then the intended excess demands of all agents sum to zero.

Marx rejected Say’s initial proposition that ‘every producer asks for money in exchange for his products only for the purpose of employing that money again immediately in the purchase of another product” (Say, 1821). Marx pointed out that this notion asserted that no-one in a market economy wished to accumulate wealth. If there was never any difference between the value of commodities someone desired to sell and buy on the market, then no-one would ever desire to accumulate wealth – but the essential feature of capitalism is the existence of a group of agents with precisely that intention.

Whereas Say’s Law and Walras’ Law assert that people simply desire to consume commodities, Marx asserted that an essential aspect of capitalism is the desire to accumulate. Marx derided the idea that every agent in a market economy is simply concerned with consumption as an ideologically convenient but misleading fiction which obscures the actual dynamics of capitalism:

‘It must never be forgotten, that in capitalist production what matters is not the immediate use-value but the exchange value, and, in particular, the expansion of surplus-value. This is the driving motive of capitalist production, and it is a pretty conception that – in order to reason away the contradictions of capitalist production – abstracts from its very basis and depicts it as a production aiming at the direct satisfaction of the consumption of the producers (Marx, 1861).
Capitalist's behavior directly contradicts Walras’ and Say’s Law presumption that every agent’s intended excess demand is zero:

‘The capitalist throws less value in the form of money into the circulation that he draws out of it...Since he functions...as an industrial capitalist, his supply of commodity-value is always greater than his demand for it. If his supply and demand in this respect covered each other it would mean that his capital had not produced any surplus-value...His aim is not to equalise his supply and demand, but to make the inequality between them...as great as possible.’ (Marx, 1885).
The dilemma for Marx was to explain how this inequality could be achieved without ‘robbing’ other participants in the market, and without violating the principle that commodities were bought and sold at fair values His solution points out the fallacy underlying the economist’s superficially appealing arguments in Say’s and Walras’ Law.

This was that the market process had to include a production stage where the value of output exceeded the value of inputs – in Marx’s terms, a surplus is produced. The capitalist pays a fair price for his raw materials and a fair wage to his employees. They are combined in a production process which generates commodities for sale. The commodities are then sold for more than the cost of the raw materials and workers’ wages, yielding a profit. The profit allows the capitalist to fulfill his desire to accumulate wealth without robbing any other market participants, and without having to buy commodities below their value and sell them above it.

Say’s Law and Walras’ Law envisage an exchange-only economy: an economy in which goods exist at the outset, but where no production takes place. The market simply enables the exchange of pre-existing goods. However, in reality with capitalist production it is possible for capitalists to accumulate wealth without being thieves.

In Marx’s Circuit of Capital, people come to market with money with the intention of turning this money into more money. These agents buy commodities – specifically labour and raw materials – with money, put these to work in a factory to produce other commodities, and then sell these commodities for, typically, more money, thus making a profit.

M – C – M’; Money → Commodity → More Money.

The complete circuit described in full was:

M – C (L, MP) ... P ... C+c – M+m:

Money → Labour and means of production… Production… Different commodities, of greater value than paid for the labour and means of production → Sale of Commodities to generate more money.

Rather than simply specifically wanting to exchange one set of commodities for another of equivalent value, the agents in this circuit wish to complete it with more wealth than they started with. These agents wish to supply more than they demand, and to accumulate the difference as a profit which adds to their wealth. Their supply is the commodities they produce for sale. Their demand is the inputs to production they purchase – the labour and raw materials. The sum of these, their excess demand, is negative.

Marx wrote some interesting comments on it:

In order to prove that capitalist production cannot lead to general crises, all conditions and determining forms, all principles and differentiae specificae, in short, capitalist production itself, is denied. In fact, it is proven that if the capitalist form of production, instead of a specifically developed, particular form of social production, were rather a form of production more elementary than its earliest beginnings, then its particular opposition and contradictions, and, therefore, their eruption in crisis, would not exist.

According to Ricardo, following Say, products are always bought by products or services; money is only the medium through which the exchange is accomplished.

Thus, in the first place, the commodity, in which there is an opposition between use value and exchange value, is transformed into a mere product (use value), therefore, the exchange of commodities into mere exchange of products, that is, mere use values. That means not only going back to a stage before capitalist production, but even before the mere production of commodities; and it means assuming away the most complicated phenomenon of capitalist production - the world market crisis - by denying the first condition of capitalist production, namely, that the product must be a commodity, must therefore appear in the form of money, and must go through the process of metamorphosis.

Instead of speaking of wage-labor, he speaks of ‘services,’ a word in which the' specific characteristics of wage-labor, and its use - namely, to increase the value of the commodities against which it is exchanged and thus to generate surplus value-is again omitted, and thereby, also, the specific relationship through which money and commodity are transformed into capital.... Money ... is considered only as a means of exchange, not as an essential and necessary form of existence of the commodity, which must present itself as exchange value, namely as general social labor.

By striking out the essence of exchange value through transforming the commodity into a mere use value (product) one can easily deny, and, in fact, must deny, an essential, independent form which also has an independent existence, as against the original form of the commodity, in the process of the metamorphosis. Here the crises are reasoned away by forgetting or denying the first prerequisites of capitalist production, the existence of the product as a commodity, the duplication of the commodity in commodity and money, the resulting separation in the exchange of commodities, and, finally, the relationship of money or the commodity to wage labor.

[Invariance]

I advocate putting Say's Law to the test. Unions and minimum wage laws cause market distortion. It stands to reason they would have to be abolished, either legally or 'naturally'. Unions ~ monopolies on labour.That's a disgusting and deeply reactionary view.

[Lynx]

That's a disgusting and deeply reactionary view.
I don't think so. Unions and minimum wage laws would not exist under communism, as there would be no need for them.
An exchange based economy would have to ban capital accumulation, usury and private ownership of resources and means of production. These are key elements in mutualism.

[turquino]

Thanks comrade invariance, that was a very helpful explanation.

One comment:

“Money was treated as a commodity and it was possible that many people would want to hold money and very few would want goods. There could then be a serious slump, as producers of goods found that people did not want to part with their money. Physical commodity markets and the labour market could then be in excess supply – with unsold goods and unemployed workers – but this would be because of the excess demand for money, and not because of any overall deficiency of aggregate demand. In the aggregate, demand and supply would be in balance.”Wouldn’t excess demand for money itself result in a generalized crisis of overproduction? Sensible merchants understood better than Say that their inability to sell their wares was because of a lack of money. If there is glut of commodities and not enough of the money commodity to realize their values, the commodities will bunch up in inventories and workers will be laid off by the capitalists. The economy begins to recover when commodity production is sufficiently cut and money production stimulated. If I’ve understood it correctly, this is the argument of critiqueofcrisistheory.wordpress.com (http://critiqueofcrisistheory.wordpress.com) which I’ve found compelling.

It’s ironic that capitalism’s defenders often end up denying the most important features of capitalism. Marx hated the kind of Robinsonade political economy that tried to explain production and exchange between isolated individuals in a decidedly non-capitalist setting.