An important presentation of the dispute between Thomas Robert Malthus and Jean-Baptiste Say regarding the ‘general glut’ controversy by the classical liberal political economist Karl Heinrich Rau (1792-1870), described by Murray Rothbard as ‘the most important academic economist in Germany in the first half of the nineteenth century’ (An Austrian Perspective on the History of Economic Thought, Vol. 2, p. 460).
‘Rau’s book consisted of a German translation of an extract from Malthus’s Principles (Chapter 7), a German translation of Say’s Lettres à Malthus, and a long commentary by Ray on the two texts. Rau seriously considered the objections that Malthus addressed to Say and even endorsed some of the latter’s arguments against Say’s law of markets. Although he denied the possibility of a general overproduction, Ray conceded that it is very likely that overproduction of some commodities, combined with a commercial crisis, could prevail for a considerable time’ (Gehrke, p. 177).
‘In 1821, Rau wrote a letter to Malthus, in which he claimed to be largely in agreement with him. In this letter, he also supported state intervention in order to prevent macroeconomic imbalances. Soon afterwards, however, Rau began to adopt a much more market-liberal stance, and in his Grundsätze der Volkswirthschaftslehre the influence of the Malthus-Sismondi ideas had already melted away’ (Gehrke, pp. 177-8).
See: Christian Gehrke, ‘The reception of Malthus in Germany and Austria in the 19th century Christian Gehrke’, in Malthus Across Nations: The Reception of Thomas Robert Malthus in Europe, America and Japan.
