John Stuart Mill's 4th Proposition (“Demand for Commodities Is Not Demand for Labor”) Has the Same Mystery about It that Fermat's Last Theorem Had in Mathematics

John Stuart Mill's fourth proposition respecting capital, that “demand for commodities is not demand for labor,” has in many respects the same mystery about it that Fermat's Last Theorem had in mathematics. The proposition is found in  a text of the highest reputation, Mill’s Principles of Political Economy—arguably the nineteenth century's most influential text. Yet, it can no longer be explained in a way that makes clear why Mill considered it so fundamentally important. . . .

Several questions therefore arise. What did Mill mean? Was Mill’s proposition sensible and coherent? Did it require some special assumption that we have since discarded, such as the wages fund? Why could Leslie Stephen in 1876 describe Mill’s fourth proposition as “the doctrine—so rarely understood, that its complete apprehension is, perhaps, the best test of a sound economist,” emphasizing both how infrequently economists even in his own time were capable of making complete sense of Mill’s proposition, while also specifically stating how crucial he believed understanding Mill’s proposition is if one is actually to understand how an economy works?

--Steven Kates, “Mill's Fourth Fundamental Proposition on Capital: A Paradox Explained,” Journal of the History of Economic Thought 37, no. 1 (March 2015): 39-40.