Originally posted by Django
Basically, Yoda, when you conduct a scientific experiment, what you do is create a controlled environment and isolate certain variables--namely those whose reactions you are testing. The same principle applies here. When you say "other things being equal", i.e. constant, what you are doing is assuming an artificial controlled environment in which, hypothetically, all other factors remain unchanged. This is, of course, never the case in real life, but is a necessary assumption to make for any economic theory. What Keynes says, therefore, is that if you discount all other factors, such as innovation, the weather, population, etc., assuming that they remain constant for a particular duration of time, you will find that supply always follows demand. Thus, Keynesian theory only holds true, strictly speaking, for such an artificially controlled environment, and is only approximately true in real life--and this is true for all economic theories--they only hold true, strictly speaking, for their own artificially controlled environments, and are only approximately true in real life. I hope that clarifies the problem.
Basically, Yoda, when you conduct a scientific experiment, what you do is create a controlled environment and isolate certain variables--namely those whose reactions you are testing. The same principle applies here. When you say "other things being equal", i.e. constant, what you are doing is assuming an artificial controlled environment in which, hypothetically, all other factors remain unchanged. This is, of course, never the case in real life, but is a necessary assumption to make for any economic theory. What Keynes says, therefore, is that if you discount all other factors, such as innovation, the weather, population, etc., assuming that they remain constant for a particular duration of time, you will find that supply always follows demand. Thus, Keynesian theory only holds true, strictly speaking, for such an artificially controlled environment, and is only approximately true in real life--and this is true for all economic theories--they only hold true, strictly speaking, for their own artificially controlled environments, and are only approximately true in real life. I hope that clarifies the problem.
However, my point remains the same. You're quite right in stating than an economic theory cannot be expected to cover every scenario, thus it need not ALWAYS work when all of life's intangibles are thrown into the mix. The problem with Keynesianism is that fluctuating products are not some minor detail. They are, arguably, the core of our economy, and unarguably an important part of it. To say Keynesianism works if you assume a static produce line is like saying the weather's nice so long as you don't get any wind.
This brings us back to my original point: demand-side policies may, indeed, have some practical use. But if they do, it's only in the very short-term, for the reasons stated above. Long-term, they don't pass the basic logic test. Supply-side economics, on the other hand, identifies the difficult part of economic growth (the creation and modification of products) and focuses on making that as easy as is reasonably possible, and therefore is a vastly superior economic theory in the long run.