Subsequent economists have tried to make sense of Say's law in the following way.
Imagine an economy that consists only of shoes and hats.
The cobblers intend to sell $100-worth of shoes in order to buy the equivalent amount of hats.
The hatters intend to sell wares worth $80 so as to spend the same sum at the cobbler's.
Each plan is internally consistent (planned spending matches revenue).
Added together, they imply $180 of sales and an equal amount of purchases.
Sadly, the two plans are mutually inconsistent.
In the shoe market the producers plan to sell more than the consumers will buy.
In the hat market the opposite is the case.
A journalist, attentive to the woes of the shoe industry, might bemoan the economy's egregious overcapacity and look askance at its $180 GDP target.
Cobblers, he would conclude, must grasp the nettle and cut production to $80.
The journalist might not notice that the hat market is also out of whack, in an equal and opposite way.
Hat-buyers plan to purchase $100 from producers who plan to sell only $80.
Unfortunately, this excess demand for hats cannot easily express itself.
If cobblers can only sell $80 of shoes, they will only be able to buy the equivalent amount of hats.
No one will see how many hats they would have bought had their more ambitious sales plans been fulfilled.
The economy will settle at a GDP of $160, $20 below its potential.
Say believed a happier outcome was possible.
In a free market, he thought, shoe prices would quickly fall and hat prices rise.
This would encourage shoe consumption and hat production, even as it discouraged the consumption of hats and production of shoes.
As a result, both cobblers and hatters might sell $90 of their good, allowing the economy to reach its $180 potential.
In short: what the economy required was a change in the mix of GDP, not a reduction in its level.
Or as one intellectual ally put it, “production is not excessive, but merely ill-assorted”.
Supply gives people the ability to buy the economy's output.
But what ensures their willingness to do so?
According to the logic of Say and his allies, people would not bother to produce anything unless they intended to do something with the proceeds.
Why suffer the inconvenience of providing $100-worth of labour, unless something of equal value was sought in return?
Even if people chose to save not consume the proceeds, Say was sure this saving would translate faithfully into investment in new capital, like his own cotton factory.
And that kind of investment, Say knew all too well, was a voracious source of demand for men and materials.