Demand creates its own supply in the short run (counterpoint to Say's Law).
Formulated against Say's law rather than by Keynes as a law. The dispute is about the short run: whether demand shortfalls persist long enough to warrant intervention.
In practice
- A council that cuts spending in a downturn finds local businesses fail and its tax base falls further.
- A factory idles machines and lays off staff with its warehouse full, because nobody is buying, and capacity was never the constraint.