asimakopulos, a. (1975). a kaleckian theory of income distribution. canadian journal of economics,...

7/27/2019 Asimakopulos, A. (1975). a Kaleckian Theory of Income Distribution. Canadian Journal of Economics, 313-333.

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A Kaleckian Theory of Income DistributionAuthor(s): A. AsimakopulosSource: The Canadian Journal of Economics / Revue canadienne d'Economique, Vol. 8, No. 3(Aug., 1975), pp. 313-333Published by: Wiley on behalf of the Canadian Economics Association

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A Kaleckian heoryof incomedistributionA. ASIMAKOPULOS / McGill University

A Kaleckian theory of income distribution. This paper draws together thevarious elements of Kalecki's analysis of income distribution. It is argued thatwhat a higher degree of monopoly makes possible and protects is the rate ofreturn of the main firms in an industry. This degree of monopoly is reflectedin the mark-ups over unit prime costs used to set prices. Employment and thelevel of profits are determined in this model by capitalists' expenditures. A keyassumption is that a higher proportion of profits than of wages is saved. Withoverhead labour, changes in effective demand, as well as changed mark-ups,affect the share of profits.Une theorie kaleckienne de la distribution du revenu. L'article se veut une syn-these de differents elements de l'analyse de Kalecki sur la distribution du re-venu. Les accents donnes a certains aspects particuliers de sa theorie ne sontpas necessairement ceux que Kalecki lui-meme a donnes. Ses formulations desequations de prix sont deficientes. On pretend ici qu'un degre plus grand demonopole rend possible et protege non pas le rapport entre le prix et les cofutsde base, mais la rentabilite generale des entreprises d'une industrie. Les prixsont determines par la majoration des cofuts de base unitaires. Ces majorationssont affectees par le degre de pouvoir monopolistique, de meme qu'ils peuventI'etre par le pouvoir syndical. Les composantes de cette theorie sont les rela-tions de courte periode, une fois donnee la capacite de production et deter-mine l'investissement par les decisions des periodes anterieures. L'emploi et leniveau des profits sont determines par les depenses de capitalistes. On peuttenir compte de l'epargne des travailleurs sans modifier l'orientation generaledu modele, tant que la proportion epargnee des profits est plus grande que laproportion epargnee des salaires. Les changements de la demande effectivepeuvent influencer la part des profits, meme avec des majorations donnees, acause de l'existence d'une quantite fixe de travail. Le caract6re kaleckien dumodele developpe ici est teste par son utilisation dans l'examen des questionsposees par Kalecki dans son article, publie de fagon posthume, sur 'La lutte desclasses et la distribution du revenu.'

I am gratefulto J.B. Burbidge,P. Davenport,H. Flakierski,J. Henry, andS. Ingermanfor comments on an earlierdraft of this paper.They are not, ofcourse, responsiblefor any errorsor for this interpretationof Kalecki'swritings.The first draftsof this paper were writtenwhile I was a visitingprofessoratMonash University.Canadian Journal of Economics/Revue canadienne d'Economique, VIII, no. 3August/aofit 1975. Printed in Canada/Imprime au Canada.

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314 / A. Asimakopulos

INTRODUCTION

Michat Kalecki's writings contain a theory of distribution that combinesmicroeconomic and macroeconomic aspects of the economy. Income sharesare influenced both by the mark-ups firms are able to establish in oligopol-istic markets and by the level of effective demand. A higher level of effec-tive demand would lead to a higher share of profits even with the mark-upunchanged, if there is overhead labour in the model. This point was madein a paper Kalecki published (in Polish) in 1933.1 Discussions of Kalecki'stheory of distribution have centred on his 'degree of monopoly' and haveignored the role of overhead labour in providing a means by which changesin effective demand can influence income shares even when mark-ups areconstant.2 Kalecki also tended to abstract from overhead labour in his laterwritings.3

The publication of Kalecki's Selected Essays on the Dynamics of theCapitalist Economy (1971), which he characterized as including 'what Iconsider my main contributions to the theory of dynamics of the capitalisteconomy' (vii), provides a convenient source from which to construct aKaleckian theory of distribution. One of the important differences betweenKaldor's 'Keynesian' theory of distribution and Kalecki's is that the formeris restricted to full employment situations, while the latter is not. Kaldor(1955-6; 94) makes a distinction between 'short-runtheory' and 'long-runtheory' and wants to use the multiplier principle to explain variations inoutput and employment in the former but as a distribution theory in thelatter. Kalecki denies that such a distinction between short- and long-runtheory is possible. 'The long-run trend is but a slowly changing componentof a chain of short-period situations: it has no independent entity' (Kalecki,1971, 165). The building blocks for this Kaleckian theory of distributionwill thus be the short-period relations.

Kalecki's presentation of the degree of monopoly to explain the deter-mination of mark-upshas been criticized as no more than a tautology, simplydefining the ratio of price to prime costs as the degree of monopoly.4 Thereare many places where Kalecki's language seems to invite this interpreta-tion, but 'no! problem of tautology is involved' (Kalecki, 1971, 168, em-

1 The paper's itle in the Englishtranslationprinted n Kalecki ( 1971) is 'Outlineof a theory of the business cycle.' The assumption appearsin a footnote: 'Weassume here that aggregate productionand profit per unit of output rise or falltogether,which is actually the case. This results at least to some extentfromthe fact that a partof wages areoverheads'(ibid., 1 n.).2 An importantexception has been ProfessorJoan Robinson (Robinson, 1969),who made use of overhead, or indirect, labour in her reformulationof Kalecki'spricing equation.3 See for example,chap. 15, 'Trendsand business cycles' in Kalecki (1971), whichwas firstpublishedin 1968.4 This criticismis made by, among others, Kaldor (1955-6) and Nuti (1970).



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Income distribution/ 315

phasis in the original) if the ratio of price to prime costs in a given situationis taken as a reflection of the degree of monopoly rather than its definition.

This paper draws together the various elements of Kalecki's analysis ofdistribution. In the process some of his formulations, particularly the priceequations, are amended. It is emphasized that what a higher degree ofmonopoly makes possible, and protects, is the higher profitability of firmsin the industry. This is not, in general, as Kalecki's use of the term implies,the same as the ratio of price to prime costs. Over time, and in comparisonwith other industries, a higher degree of monopoly would enable the mainfirms in the industry to obtain higher rates of profits. It is thus the realizedrate of return on investment which is a reflection of the degree of mon-opoly.5 The approach presented here.assumes that estimates of these ratesof return, used for purposes of planning, are included in the mark-upsapplied to unit prime costs in order to arrive at prices. Because of theamendments to Kalecki's presentation the model presented here is betterdescribed as a 'Kaleckian theory' rather than 'Kalecki's theory.' A test ofits Kaleckian nature is provided by using the theory to answer the ques-tions he posed in his posthumously published paper, 'Class struggle and thedistribution of national income' (reprinted in Kalecki, 1971).KALECKI S PRICING EQUATIONS

Kalecki distinguished between two types of short-term price changes, 'cost-determined' and 'demand-determined.' 'Generally speaking, changes in theprices of finished goods are "cost determined" while changes in the pricesof raw materials inclusive of primary foodstuffs are "demand determined"'(Kalecki, 1971, 43). Supply conditions are given as the reason for thisdifference.The productionof finishedgoods is elastic as a result of existing reservesofproductivecapacity.When demand increasesit is met mainly by an increaseinthe volume of productionwhile prices tend to remainstable.The price changeswhich do occur result mainly from changes in costs of production. ... Thesituation with respect to raw materialsis different... With supply inelastic inshort periods, an increase in demandcauses a diminutionof stocks and a con-sequent increase in price ... A primaryrise in demandwhich causes an increasein prices is frequently accompaniedby secondary speculative demand. Thismakes it even more difficult in the short run for productionto catch up withdemand (ibid., 43-4).Kalecki's analysis of prices and his theory of distribution are concernedwith finished goods. For raw materials he simply states: 'the relative share

5 Riach ( 1971 has arguedthat Kalecki's'degreeof monopoly' should bereformulatedin this way. In the same spirit Joan Robinson'sreformulationofKalecki'spricing equation (Robinson, 1969) makes use of an expectedrate ofreturnon investment.



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of wages in the value added depends mainly on the ratio of prices of theraw materials produced to their unit wage costs' (ibid., 64, emphasis inoriginal). He does not go on to consider the factors tending to change unitwage costs in these industries, but it is consistent with statements made inother connections (e.g. ibid., 56, 73) to infer that they include the degreeof organization of workers and the power of trade unions.

Unit prime costs (composed of wages and raw material costs) in plantsin manufacturing industries are assumed to be constant for a substantialrange of output, and then to increase sharply when normal productivecapacity is reached. They can thus be represented by reverse-L-shapedcurves. Firms in these industries typically sell in oligopolistic markets and,at the prices they set, their plants generally operate at less than normalcapacity. Unit prime costs are thus assumed to be constant in the range ofoutput Kalecki considers. In setting prices firms are faced with conditionsof uncertainty, with respect to both the immediate and longer-term conse-quences of their decisions. The options open to them are influenced by thedecisions of other firms, which in turn are not independent of their own,and the prices they set now may affect their prospects in future periods.There is no simple demand curve, even for a price leader, that can formthe basis for the maximization of profits by bringing marginal revenue andmarginal costs to equality. Even though firms in Kalecki's model are con-stantly striving for profits, in view of the general atmosphere of uncertaintyfacing them 'it will not be assumed that the firm attempts to maximize itsprofits in any precise sort of manner'6 (ibid., 44).

Kalecki's approach to the pricing of manufacturedgoods is an importantelement - in the Kaleckian theory of distribution developed here, but hisparticular formulations of the price equation are discarded. He assumedthat a firm arrives at a price for one of its products by marking up its unitprime costs in order to cover overheads and achieve profits. These mark-ups reflect, in his view, the 'semi-monopolistic influences ... resulting fromimperfect competition or oligopoly' (ibid., 160). The more imperfect themarket conditions faced by the firm, the stronger its position vis-a-vis otherfirms in the industry and potential entrants in terms of costs, product dif-ferentiation, etc., other things given, the higher the firm's mark-up. Twopricing equations appear in Kalecki (1971), both trying to relate a firm'sprice to its prime costs and average price in the industry. The earlierformulation (first published in its final version in his Theory of Econom,icDynamics, 1954) is

p -mu + np, (1)where p is the firm's price, u is unit prime cost, m and n are positive coeffi-

6 Kalecki'sfinal version of his theory thus does not make use of the elasticityofthe individualfirm'sdemandcurve.



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Income distribution / 317

cients, and p is the weighted average price of all firms. The mark-up onprime costs (p - u) /u as determined by this equation is

(p-u)/u = (mr- ) + np/u. (2)The values of the two parameters m and n 'reflect what may be called thedegree of monopoly of the firm's position' (Kalecki, 1971, 45). Kaleckicombines them into a single measure mi(1 - n). He argues that differentfirms in the industry would have different values for these parameters andthus set different prices.

Kalecki's attempt to allow for both the interdependence of the firms'pricing decisions and for the special features of the position of a particularfirm is commendable, but the explanatory power of his equation is verylimited. At times Kalecki writes as though firms actually arrived at priceson the basis of this equation. 'The influence of the emergence of firmsrepresenting a substantial share of the output of an industry can be readilyunderstood in the light of the above considerations. Such a firm knows thatits price p influences appreciably the average price p and that, moreover,the other firms will be pushed in the same direction because their priceformation depends on the average price p. Thus, the firm can fix its priceat a level higher than would otherwise be the case' (ibid., 50). This ismuch too simplified a representation, even at this level of abstraction, ofthe forces determining the prices charged by firms in these market struc-tures. It is true that a firm is more likely to raise its price in a given situa-tion if other firms would follow its action, but this following of a price riseis not the mechanical result of the initial change in average price. In theabsence of price agreements it could be due to a similar view of the profitpotential of a higher price, or to the fear of starting a price war, or to somecombination of these factors.

There are also technical problems with Kalecki's pricing equation. Hededuces that n < 1 from the observation that 'where the price p of the firmis considered equal to the average price T we have p -mu + np, fromwhich it follows that n must be less than one' (ibid., 45). But this conclu-sion does not necessarily follow. In situations where price is set by a priceleader and followed by others, n would be equal to one for the price fol-lowers and thus m would be equal to zero.7 The ratio of proceeds to primecosts for a price follower would thus be equal to the ratio of the prevailingindustry price to its unit prime costs. For the price leader, on the otherhand, n would be equal to zero and the value of m would depend on many(interdependent) factors, such as its view of an appropriate rate of return7 This conclusion also holds when there is productdifferentiation.The priceequationfor a pricefollower would still havem equalto zero, with pf - pj+ dor pt = (1 + d)pl, wherept andp, represent hepricesof the follower andthe leader and d is the recognizedprice differential, expressedeither in absoluteterms, or as a ratio, whichever is appropriate.



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on its capital over time, pressures from other firms in the industry and frompotential entrants, the rate of profits tax, etc.A reformulation of Kalecki's equation for the mark-up appeared in apaper that was published posthumously in 1971.8 Instead of the linearform of equation (2), he wrote

(p - u)/u = f(/p), (3)or, rearranging,

p - u[1 + f(P/P)]. (4)His attempt to allow for the factor of competition between firms byrelating its price to the weighted average price for the industry as a whole,by means of the function f, does not succeed. This function has no explan-atory power; it does not provide a causal relation between a firm's mark-upand average industry price. Kalecki wrote that 'f is an increasing function:the lower is p in relation to p, the higher will be fixed the mark-up'9 (ibid.,160). This observation is a non sequitur. For the firm in a given situationboth u and pfare given (the effect of a higher value of p on p may beignored for this illustration) and therefore the higher the mark-up, thehigher p, and the lower p/p. Contrary to Kalecki's statement, the functionf appears to be a decreasing function! This conclusion follows from thedefinition of these terms and points up the tautological nature of Kalecki'sequation (3).

Kalecki tried to distinguish between his theory and that of the 'full-costpricing' theoiry (see Hall and Hitch, 1939), on two grounds. His 'emphasison the influence of prices of other firms' and the belief that 'the degree ofmonopoly may, but need not necessarily, increase as a result of a rise inoverheads in relation to prime costs' (ibid., 51, italics in the original) wereheld to form the basis for this distinction. The former claim can be dis-missed because of his failure, noted above, to incorporate this influence inany way that, on examination, is different from the general interdependenceof firms'pricing policies common to,all fully specified mark-uptheories. Thelatter claim would only hold if his degree of monopoly was interpreted asmeasuring the ratio of proceeds to prime costs, rather than as indicating theimperfections in competition that permitted firms to achieve high rates ofprofits over time. Kalecki's writings on this point are confusing; there is atendency to identify the degree of monopoly with the ratio of proceeds to

8 The paper, 'Classstruggle and distributionof national income,' firstappeared nKyklos in 1971. It is reprinted(with some typographicalerrors) in Kalecki(1971).9 There is a misprint in the text of Kalecki (1971): the bar has been omittedfromthe second T.



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prime costs, not only in the short-run with given productive capacity andoverheads when it is synonymous, under certain conditions,0 with higherprofitability, but also over long periods of time. In his examination of dataon the ratio of proceeds to prime costs in manufacturing industries overhistorical periods he all but identifies the degree of monopoly with thisratio. He does qualify his comments, however, noting that 'the interpreta-tion of the movement of the ratio of proceeds to prime cost in terms ofchanges in the degree of monopoly is really the task of the economic his-torian who can contribute to such a study a more thorough knowledge ofchanging industrial conditions' (ibid., 56). Whatever the judgment reachedon Kalecki's use of the term 'degree of monopoly,' a Kaleckian theory ofdistribution can be developed on the assumption that it acts to protect therate of profits of established firms in the industry.THE DETERMINATION OF THE MARK-UP

The theory of distribution presented here is based on the assumptions thatprices in manufacturing industries are generally arrived at by marking upunit prime costs and that these mark-ups are relatively stable in the face ofshort-term fluctuations in demand and output, at least within some substan-tial range of output." These mark-ups are designed to cover, over time,both overhead costs and profits. Their values would thus be dependent onthe standard rates of utilization of productive capacity used to calculatestandard costs'2 as well as on some expected rate of return. The rates ofreturn built into the mark-ups are affected by what is considered to be a'normal'returnto industrial investment in the particulareconomy examined.In addition, those areas of industry with some degree of monopoly arisingfrom seller concentration and barriers to entry can earn, on the average,10 A higher price, relativeto prime costs, will result in higherprofitsin the shortperiod as long as it is not accompaniedby sales that are sufficiently ower tooutweigh its beneficialeffects on profits.More formally, we can state that ahigher mark-upwill lead to higherprofitsin the short period if the value for theelasticity of employmentof direct labourwith respectto the mark-up s

numericallyless than one.11 For empiricalsupportfor the hypothesisof mark-uppricing in manufacturingindustries,see Nordhaus and Godley (1972).12 Standardoutput is less than normal productivecapacityoutput.Lanzillottifoundthat for the firmsin his sample 'the standardspremisedon an assumedrate ofproduction,typically about 70 per cent to 80 per cent of capacity' (Lanzillotti,1958, 923, n.5). Firms in Kalecki'smodel are assumedto plan on having someexcess capacity- they providefor more than their expectedratesof output.This feature is also prominentin Kaldor's models (see, for example,Kaldor,1970, 4, and Kaldor and Mirrlees, 1962, para. 3). What firmstake as standardratesof output,and thus mark-ups,would change over time with changes inthe experiencedrates of utilizationof plant.



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more than these normal rates of profits.'3Provision for such returnsbecomeformalized in their mark-ups in the guise of some target rate of return.14

The 'normal' rate of return for a given time and economy is, in Kalecki'sapproach, 'rooted in past economic, social and technological develop-ments."-5It very much depends on the profits that firms have been able toearn in the past and on the profit share in total income. Profits are deter-mined in this model, as we shall see, by the investment that firms have beenable to achieve in conjunction with conditions of thriftiness. Both invest-ment and the profit share may be affected by bargaining with trade unions(the 'class struggle'). Rising money-wage rates may provoke monetaryrestraints which hamper investment and may lead to some erosion of mark-ups and the share of profits.

There is another feature of Kalecki's analysis that indicates a relation-ship between the growth possibilities for a firm and the rate-of-returnportion of its mark-up. Kalecki's analysis is based on what he consideredto be the characteristic features of the capitalist mode of production. Themeans of production are owned by capitalists who, in a closed system withgovernment activity excluded, do all the saving. The saving of workers ina capitalist economy would be small in comparison to that of capitalistsand is ignored in his writings. Kalecki distinguished between two types ofcapital, entrepreneurial capital and rentier capital.'6 The former is capitalowned by the firm while the latter is the capital it tries to borrow. He wrotethat 'the access of a firm to the capital market, or in other words theamount of rentier capital it may hope to obtain, is determined to a largeextent by the amount of its entrepreneurialcapital,' and 'the expansion ofthe firm depends on its accumulation of capital out of current profits'(ibid., 105, 106). A firm's ability to grow thus depends on the profits itcan generate to finance its investment plans both directly (retained earn-ings) and indirectly through borrowing related to its internal funds. Giventhe general profitability of the economy, a firm's profit expectations are13 Some empiricalfindingson the positive relationshipbetween rates of return onone hand, and seller concentrationand barriers o entry on the other, are to befound in Bain (1956) and Mann (1966).14 For some indicationof the importanceof targetrate of return pricing,seeLanzillotti (1958) and Kaplan, Dirlam, and Lanzillotti (1958).15 Kalecki, 1971, 183. These terms are used by Kalecki in referringto his approachto the rate of growth of an economy at a given time. They are also appropriate ndescribing a Kaleckiantheory of pricingsince it is an importantelement in atheory of growth.In a particularshortperiod various factors, such as views onwhat constitutesa normal rate of return, as well as availableproductivecapacityare taken as given. However, over a sequenceof short periods,that is, over time,these views may be alteredby experience.A Kaleckianmodel providesa frame-work for analysinga particulareconomy, but for the analysis to be completed the

institutionalfeatures and history of that economy are required.16 See in particularthe chapter on 'Entrepreneurial apital and investment' nKalecki (1971, 105-9). The firstversion of this chapterwas publishedin 1937.



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dependent on the degree of monopoly it enjoys and are indicated by itstarget rate of return. Where growth is an important goal for a firm, itstarget rate of return can serve as an indicator of its growth possibilities,that is, the rate at which it can increase the value of the capital assets underits control.'7MACROECONOMICS AND THE LEVEL OF ABSTRACTION

The theory of distribution developed here is a macro-theory, concernedwith aggregates, total investment, total consumption, and total output. Itis thus very far removed from the action of individual decision-makingunits that decide on their own level of investment, consumption, prices,output, and so on, even though it tries to justify the aggregate relations ituses on the basis of their consistency with particular types of individualbehaviour. Macroeconomic analysis thus proceeds at a very high level ofabstraction and such variables as the difference in prices charged by firmsin the same industry because of product differentiation, which Kaleckiemphasized in setting up his price equations, are generally ignored. Productdifferentiation can still have a role in this model by its influence on themark-ups that firms use to arrive at prices. Consolidation does not stop at17 An alternative explanationfor the determinationof the mark-upin oligopolyis contained in an interesting paper by Eichner (1973). He explains changesinthe mark-up as responsesto the demandfor additional investment funds.There is a cost of generatingmore funds for investment from the higherimmediate profitsthat result from a higher mark-upbecause of the substitutionover time by consumers of other products, the entry of other firmsinto the

industry, and possible governmentintervention.Eichnerexpressesthis implicitcost of the additional investment funds generatedin this way as an 'interest'payment.This enableshim to 'derivea supplycurve for additionalinternal funds... indicatinghow the implicit interest rate ... on these funds varies as the amountof additionalfunds obtainedper planning period ... varies' (ibid., 1193).A supply curve for external funds is addedto this function to obtain the totalsupplyfunction for additional investment funds for the firm. The changes in thefirm's investment and mark-up are then determinedby bringingin its demandcurve for additionalinvestmentfunds, which 'is simply the familiarmarginalefficiencyof investmentcurve' (ibid., 1190).The results obtained from Eichner'sapproach and that presentedherewould often be similar even though they give opposite signsfor the direction ofcausationbetween the ratesof returnand growth.In this model a highermark-up, due to a greater degree of monopoly, would permit a firmthat is fullycommittingits resources to expansionto grow at a faster rate. In Eichner'smodel the desire for a higher growth rate, given the degree of monopoly, wouldlead to a higher mark-up.It would often be difficultto disentanglethesetwo elements from data on growthand profit rates. Another differenceisthat Eichner's approachis not designed to explain 'the absoluteprice level butrather the change in the margin above costs from one pricing periodto the next'

(ibid., 1195). The use of a marginal efficiency of investment schedule in aKeynes (or Kalecki)-type model has been criticized in Asimakopulos (1971). Seealso Shackle (1967), especially chap. 11, and Robinson (1962; 1965).



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this point, industries themselves are combined in very broad aggregates,such as 'investment-goods' and 'consumption-goods.' Again, some of theaspects of the underlying reality, the large number of industries comprisingone of these sectors, can be introduced indirectly by indicating the effectson the aggregate in question of some of the diversity they tend to obscure.For example, in explaining the possible power of strong trade unions toerode mark-ups, Kalecki argues that an industry facing much higher wagerates and attempting to maintain mark-ups would find 'its product moreand more expensive and thus less competitive with products of otherindustries ... trade union power restrainsthe mark-up."8

In this paper the degree of aggregation will be carried one step further,and no distinction will be made between investment-goods and consump-tion-goods production sectors. The effects on our results of introducingtwo production sectors along these lines will be noted. The raw-materials-producing sector will also disappear from view;19it is not an integral partof Kalecki's theory of distribution, which is largely concerned with manu-facturing industries. Firms will therefore be assumed to be fully integrated,producing all the materials required for their final output, and prime costswill thus be made up only of labour costs.

Output will be assumed to consist of a multipurpose good which can beconsumed or invested as capital equipment or as inventories. As soon asit is set aside for formation into capital equipment its characteristics areassumed to change. It is formed into capital equipment, with no furtherexpenditure of labour, by accumulating this good over time.20

One final element of abstraction concerns the shares of the differentplants in total output. These shares will be taken as given in any shortperiod and will not be explained by the analysis.21 They will be represented18 Kalecki, 1971, 161. He comments in a footnote: 'Despite the fact that forthe sake of simplicity,we assumedthat all wage rates are raised simultaneouslyin the same proportion,we consider realisticallythat bargaining s proceedingby industries' (ibid.).19 It should not be necessary to emphasizethat this and the exclusion ofinternationaltrade and governmentalactivities are importantomissions.Thepresent model can best be viewed as a 'basic' one, to which these other features

should be added. Some aspectsof governmentactivity,within the context of thistype of model, are examined in Asimakopulosand Burbidge (1974).20 This device of multipurposeoutputwas used in Asimakopulos (1969; 1970) andagain in Asimakopulosand Burbidge (1974).21 The differentplants are thus assumedto be operated in parallelfashion, eventhough they may contain equipmentof different vintages'that give rise todifferencesin labour productivity.This results in a perfectly elastic supply curvefor output at the established price,without the need to assume that the marginalcosts are constantand equal for each plant (cf. Davidson, 1960, 53). Thatplants of differingefficiency share in total output through imperfectionsincompetitionthat offer protectionfor the marketshares of firmsowning theseplants can be inferredfrom the data discussedby Kaldor (1970). He notedthat 'the share of gross profit in value added shows a very"highvariation asbetween different"establishments" (2). He also noted that 'the share of profits in



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by the relative amounts of direct labour employed by each plant. Thesedirect-labour employment ratios will be the same for all comparisons madewith respect to any particularshort period.THE MODEL

The following notations will be used:w money-wage rate,a average output per unit of direct labour,L1 level of employment of direct labour,L1 maximum possible employment of direct labour with existing plant,L,, level of employment of overhead labour,L level of total employment,p price of the output,p mark-up over unit prime costs,Y value of gross output,W the total wage bill,II value of total gross profits,C value of total consumption,A constant element in capitalists' consumption in real terms,X small fraction expressing dependence of a portion of capitalists' con-

sumption on current profits,S value of gross saving,! value of gross investment, andI gross investment in real terms.

The unit prime costs of the ith plant, in the range of employment wherethey are constant (L1l < Lf1), are equal to w/ai. Average output per unitof direct labour in the economy a is equal to 1q= 1 aiL1ilL1, where n is thetotal number of plants utilized. Our assumption about output shares meansthat Lv/L, is assumed to be unchanged in all the short-period comparisons.Average unit prime or direct costs can thus be represented by w/a. It isassumed that the price is arrived at by a price leader setting a mark-upover unit prime costs and that other firms follow this price. The ratio ofthis price to average unit prime costs is stable in the face of short-termfluctuations in demand and output.

The mark-upover this average unit prime cost u is equal to p/[(w/a) - 1],so that we can write

p= (1 + Ft)(w/a). (5)

relation to the value added shows the same kind of scatteramong "firms"as itdoes among "establishments".. It is perfectly possible, therefore,that the"marginalequipment"of the least efficientfirmis one that is considerablyolderthan the "marginal" quipmentof a high profit firm' (3).



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There are thus three elements in the determination of the price level inthis model: the mark-up, the money-wage rate, and the average output perunit of direct labour. The latter is given by present-day operating knowl-edge and the technical features of the plant and equipment inherited frominvestment in earlier time periods and utilized in the present. Money-wagerates are set as a result of bargaining between employers and trade unions.This wage level is not explained by the model, it is taken as given, and thecffects of different values for it will be considered.

There is a banking system in this model, even though it does not appearexplicitly. It provides the money supply, holds deposits of households, andlends working capital to firms. Banks' interest income represents a shareof total profits and is assumed to be remitted to their shareholders. Whendifferent levels of output and prices are considered the supply of money bythe banks is assumed to be 'elastic at the ruling rate of interest.'22Firmscan generally obtain finance for their planned investment. Credit restraints,and the inability to achieve planned rates of investment, only arise in in-flationary situations.

The remaining features of this model can be quickly sketched in. Thevalue of output produced in the particular short period (e.g. three monthsor a year) examined is

Y = p a LI, L, < L1. (6)It will be assumed that Keynes's short-term expectations, which deter-

mine the degree of utilization of existing plant, are always borne out byevents because they can be quickly adjusted to conform to actual condi-tions. Thus the value for the amount produced in the particular shortperiod turns out to be equal to the value of the amounts demanded for con-sumption and investment, at the set price. The value of total gross outputproduced is divided on income account into two categories, wages andgross profits.

Y = W+ (7)W = wL. (8)Total employment L is made up of two categories, total direct labour L1

which appears in equation (6), and total overhead or indirect labour Lo.In order to operate a plant at any non-zero degree of utilization, a certainnumber of workers are required (for the ith plant this number would berepresented by Lo, and for all plants, Lo = I,.'-1 L0I). This number, un-like that of direct labour employed, is independent of the degree of utiliza-tion of the plant (as long as it is utilized). Therefore, our assumption ofconstant output per unit of direct labour in the output range considered22 This assumptionis implicit in many of Kalecki'spapers (for example, Kalecki,1971, 13 and 159n.).



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means that labour productivity, output per unit of total labour employed,is an increasing function of total output in this range.

LrLo+Li, (9)where L < total labour force.

The one time-lag that appears in all of Kalecki's writings on effectivedemand and distribution is that between investment decisions and invest-ment (see Kalecki, 1971, 2, 166), and it appears in this model. On theother hand he occasionally abstracts from the lag in consumer expendi-ture,23and it will be ignored here. The effect of the latter assumption is toallow the multiplier to take its full value in the short period in whichinvestment is increased. Kalecki abstracts from 'workers' savings, whichare definitely unimportant' (ibid., 166), while capitalists' consumptioncontains an important element that is 'a slowly changing magnitude depen-dent on past economic and social developments' (ibid., 167) as well asanother element that is proportionate to profits. The equation for the valueof total consumption expenditures will be written here as

C= W+ XAI +pA. (10)Gross saving is thus equal to

S (1-A X) -pA.-P1)Investment in real terms in the short period is exogenous, determined

by investment decisions made in an earlier period subject to two possibleconstraints. One is that planned investment plus the associated consump-tion do not exceed the normal productive capacity of the available plantsor require more labour than can be provided by the labour force, and theother is that the 'inflation barrier' is not reached. This constraint wouldoperate if pressures in the labour market led to rapidly rising wages andprices, to which the monetary authorities respond by imposing severe creditrestrictions that would prevent firms from achieving their planned invest-ment.

7= pI. (12)Finally, we have the necessary equality between saving and investment:I - S. (13)Gross saving, as given by equation ( 11), is desired saving, while gross

investment in equation (12) is intended investment, and thus equation23 In making this assumptionhe notes that 'this ... is realisticwith regardtoworkers'consumption,but not so with regardto that of capitalists.However,as long as the time-lagbetween investmentdecisions and investmentisemphasized,disregarding hat between profitsand capitalists'consumptiondoesnot distort the analysis' (Kalecki, 1971, 166).



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(13) indicates not only the necessary ex post equality between saving andinvestment but a position of short-period equilibrium as well.

There are nine unknowns (p, Y, LI, W, H, L, C, S, I) in this model. Wetake as given the values for w, a, j., Lo, X, A and I. Solving for the vari-ables of interest, we find that profits for the period can be derived by com-bining the last three equations and rewriting:

T (1 + 1)W((I A) (14)a(l -A)Equation (14) rearranges an equation (II = pl + XIT+ pA) that

expresses Kalecki's conclusion with respect to the determination of profits.Profits are determined by the value of capitalists' expenditure - their grossinvestment and consumption.24This conclusion reappears in all his writingson distribution.25Profits in real terms are not a function of the mark-up.This can be readily deduced from (14) by dividing both sides by p.

To obtain the total wage bill and to derive income shares it is necessaryto solve for total output, that is, the total amount of direct labour em-ployed. By combining equations (5) to (9), and making use of (14), weobtain

L= Lo + (1 + ,r) a(l-X) (15)A more revealing form of this expression for the amount of direct labour

employed is obtained by substituting,from equation (5 ), p/w for ( 1 + ,t) /a.It becomes

L = 1FLo+ p( + A)] (16)/1 w(1 - x)24 This sole dependence of profitson the expenditureof capitalistsdisappearsif workers'saving is significant.In that case total profitswould be equal to thesum of investment, capitalists'consumptionexpenditure,and workers'consumptionexpenditureout of their share of profitsless workers'saving outof their wage incomes. Capitalistswould no longer 'earn what they spend'because workers do not 'spendwhat they earn.'The introductionof workers'saving would not disturbthe main featuresof a Kaleckian theory of distribution.

This point is illustrated n the appendix.25 In his paper, first publishedin 1933, he wrote: 'Thus capitalists,as a whole,determinetheir own profitsby the extent of their investmentand personalconsumption.In a way they are "mastersof their fate";but how they "master" tis determinedby objectivefactors, so that fluctuationsof profitsappearafter all to be unavoidable.Capitalists'consumption is a function of the grossaccumulation.The gross accumulationwhich is equal to the productionofinvestmentgoods is determinedby investmentorders which in turn wereundertaken n a past periodon the basis of the profitability n that period, i.e. onthe basis of the gross accumulationand the volume of capitalequipmentinthat period' (Kalecki, 1971, 13). The factors underlying nvestmentdecisions,alluded to above, will not be examinedhere since their considerationwould turnthis paperinto a full-fledgedinvestigationof the theory of economic growth.



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The amount of direct labour employed is thus seen to be equal to theproduct of the reciprocal of the mark-up and the sum of indirect labouremployed in the plants utilized, and investment and capitalists' consump-tion expenditures expressed in wage units. The gross profit share in valueof gross output can thus be written as

II ,u(I + A) (17)Y a(1 - )LO +(1 + I)(I +A)'The profit share in total output is a function of the mark-up even though

the level of profits in real terms is not. This level is determined solely bycapitalists' expenditure in real terms. The degree of utilization of capacity,as reflected in the amount of direct labour employed, is also a function ofthe mark-up. A higher mark-up, other things given, would lower the degreeof plant utilization and increase the profit share. Higher capitalists' expen-diture, whether on investment or consumption, because of the presence ofoverhead labour not only increases profits but also increases the profitshare in total output.26This share is not determined solely by the mark-up;it varies with short-term fluctuations in the level of output. Its increase isconsistent with a constant real-wage rate.

This Kaleckian theory of distribution combines two of Kalecki's impor-tant contributions: his recognition of the role of the degree of monopolyin the setting of mark-ups, and his demonstration of the role of capitalists'expenditures in determining profits and the level of employment. Concen-tration on the degree of monopoly aspect of Kalecki's theory of distribu-tion (e.g. as in Kaldor, 1955-6) does not do full justice to his writings inthis area. The reintroduction of overhead labour into Kalecki's modelmeans that labour productivity, output per unit of total labour employed,would vary directly with demand. Consequently an increased demand forlabour due to higher capitalist expenditure leads to a higher profit shareas well as to higher output, even though the mark-up is constant.27 The26 This is the one conclusionfrom this model that might have to be modifiedifseparateinvestment-and consumption-goodsproducingsectors are introduced.Higher values for investmentor capitalists'consumptionexpendituresmight alter

the ratio of investmentto consumptionexpenditures n the model, thuschangingthe weightsto be used in arrivingat the over-all ratio of profittooutput. If the mark-upsdiffer in the two sectors, it is possible that the over-allratio of profit to output will fall, even if this ratio increasesin each sector.27 This Kaleckiantheory of distributionbelongs, of course, to the genus,'Cambridge' heory. As Kaldor (1970, 5) has phrasedit: 'Accordingto the"Cambridge"heory, the labour marketdoes not behave in accordancewith thepostulatesof neo-classicaltheory: with a rise in the demandfor labour,there is a rise in the share of profit,and a fall in the shareof wages, and notthe other way round. (This of course is not inconsistentwith a rise in absolutewages - in wages per man- if output-per-headalso rises with risingemployment.)This is because a high d'emand or labour is associatedwith a high rate ofinvestmentand a high rate of profiton capital. Empirically,the evidence here



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model predicts that real-wage rates are more stable than output per workerin the course of short-term fluctuationsin output.28

Unlike Kaldor's version of the 'Cambridge' theory of distribution thisone is not tied to the assumption of full employment of labour; higherinvestment brings about a higher profit share even though the mark-up isconstant and employment is also increased.29 Kaldor's results can bereadily obtained from this model by assuming that labour is fully employedand then deducing the effects on the mark-up and on income shares of ahigher level of investment. With both labour and productive capacity avail-able to increase output the employment multiplier as derived from equa-tion (15) is equal to (1 + jt)/jta(l - X) - the corresponding incomemultiplier is equal to (1 + pt) /4(1 - X). There is no conflict in the two'uses' of investment in this model. It determines, given the propensities tosave, both the level of employment and the distribution of income.30CLASS STRUGGLE AND THE DISTRIBUTIONOF NATIONAL INCOME

The 'Kaleckian' nature of the model developed here3' can be illustrated byderiving the results Kalecki obtained in his posthumously published article,'Class struggle and distribution of national income.'

Kalecki argued that, in a closed system, if 'wage rates in all industriessupportsCambridge,and not the implicationsof neo-classicaltheory: theshare of profit and the level of employmentare positively correlated, notnegatively' (Kaldor, 1970; 5, emphasis in original).28 This consequence of our model is in agreementwith empirical observationsof the behaviour of real-wage rates and labour productivityover the cycle.See Kuh (1960) and Neild (1963).29 This Kaleckian model is thus, in Rothschild'sphrase, 'fully in, the Keynesianspirit' (Rothschild, 1971, 25). Kaldor's (1955-6) resultscan be readily obtainedfrom this model by assuming that labour is fully employed and deducingthe effects on income sharesof a higher level of investment. The mark-upwouldin this case be positively related to the level of investmentin terms of wageunits, as shown in note 35 below.30 Lydall (1971), in criticizingKaldor'stheory of distribution,has arguedthat'if the Keynesian theory of employment is to retainits validity we must assumey [the share of profitsin national income] constant (or nearly so)' (92).This argument s refuted by our Kaleckian-Keynesianmodel. It provides anexplanationfor the level of employment withoutrequiringthe profit share to beconstant. Keynesian theory does not requirethe over-allpropensity to savein the economy to be constant.It may vary with changesin the distributionofincome even though the propensitiesto save of the differentclasses in theeconomy are constant.31 A similar model, which included governmentexpenditure and taxation,-wasused to investigatethe short-period ncidence of taxation in AsimakopulosandBurbidge (1974). They duplicate and extend the results obtained by Kaleckiin his 1937 article, 'A theory of commodity, income and capital taxation'(Kalecki, 1971, 35-42).



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increase in the same proportion, 1 + a times ... all prices will also increase1 + a times provided that functions f in industries to which they are rele-vant are unchanged ... It follows that if these conditions were fulfilled weshould arrive at the ... conclusion ... that a general increase in money wagesin a closed economy does not change the distribution of national income'(Kalecki, 1971, 161, emphasis in the original). (The 'functions f' are themark-ups.) Investment and rentiers' expenditures are assumed to be un-affected in real terms as a result of the higher money-wage rates. His con-clusions can be easily deduced from equation (17) above. The profit sharein total income is constant, no matter what the value of w, as long as jt, X,and (I + A) have unchanged values.32

Kalecki's analysis does not end with this mechanical result. He believedthat in certain circumstances mark-ups depend on trade-union activity.This occurs because wage rates are not raised simultaneously in all indus-tries and bargaining tends to proceed industry by industry. 'High mark-upsin existence will encourage strong trade unions to bargain for higher wagessince they know that firms can "afford" to pay them' (161). Kaleckibelieved that competitive pressures in their markets from those in otherindustries will lead them to lower mark-ups and thus raise prices by lessthan the increases in unit prime costs.33

Kalecki distinguished between two types of wage increases. 'Normal'wage increases that usually leave the mark-ups unchanged in practiceprevent the increases that would otherwise occur 'because of the rise inproductivity of labour' (162). Spectacular wage rises that are due to in-creases in bargaining capacity are assumed to depress the mark-ups some-what, so that, as can be seen from equation (17), redistributionof nationalincome from profits to wages occurs. In the process, with the volume ofinvestment and capitalists' consumption expenditures unchanged in realterms. total employment and output will be higher, as can be easily de-duced from equation ( 15). Although Kalecki's model in his 'Class struggle'paper distinguishes between three Departments of production - Depart-ment i producing investment goods, ii producing consumption goods forcapitalists, and iII wage goods - all his results can be obtained with our32 If a higher money-wagerate leads to a fall in the value of capitalists'expenditure n real terms, e.g. becausea portionof their incomes is fixed inmoney-termsand they cut their consumptionexpenditurein real terms inthe face of higherprices, then the higher wage rateswould depressthe profitshare.This increasein their shareof total gross income is not all gain for workers,however, since the level of employment, as indicatedby equation (15), wouldalso be lower in such a case.33 Profits in real termswould also be adverselyaffectedduringperiodsofrising wages and prices if firmsbased mark-upsand prices on historicalcosts.

Nordhaus (1974), who uses mark-uppricingin his investigationof profitshares,arguesthat 'most businessmen .. base their actual calculationsof prices,sales, and profitson historical cost' (187).



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one-sector model. We can conclude, as does Kalecki, 'It follows from theabove that a wage rise showing an increase in the trade union power leads- contrary to the precepts of classical economics - to an increase in em-ployment. And conversely, a fall in wages showing a weakening in theirbargaining power leads to a decline in employment. The weakness of tradeunions in a depression manifested in permitting wage cuts contributes todeepening of unemployment rather than to relieving it' (163).

It is important to note, with Kalecki, that the 'redistribution of incomefrom profits to wages is feasible only if excess capacity is in existence.Otherwise, it is impossible to increase wages in relation to prices of wagegoods because prices are determined by demand' (164). When it is nolonger possible to increase output in the short period because of theabsence of unemployed labour or unused productive capacity, the classstruggle would be reflected, not in the mark-ups, since they would largelybe determined by demand in the face of inelastic supplies,34 but in theshares of total output accounted for by capitalists' expenditure. A strongerbargaining position of workers would be reflected in a diminution of capi-talists' expenditure in real terms and thus in a higher share for workers intotal income.

The key elements in the struggle over income shares in a Kaleckiantheory of distribution, given the propensities to save, are thus the mark-upsand capitalists' expenditures in real terms. Trade unions will succeed inincreasing workers' share in total output if, in successfully bargaining forhigher money-wage rates, they can lower mark-ups and/or capitalists'expenditures. This may present trade unions with a dilemma in so far asinvestment expenditures would be cut if money-wage rates were sharplyincreased, say, as a result of credit restrictions imposed to try to curb theresulting inflationary pressures, even if employment is maintained. Theimprovement in the workers' share and level of income in the present maybe at the expense of future income that will be affected by the lower rateof current investment.34 If situationsin which maximumpossible output is being producedare compared,

equation (15) should be reversedto show the mark-up u as a function ofeffectivedemand.Let LlL denote the maximumamountof employmentofdirect labour possible, either becauseof full employmentof labour or becauseofavailableproductive capacity,we havea(l -X)L + (I + A) . anda(l A)Ljm - (I + A)ad

II_ (I + A)Y a(l - A)LImThe mark-upis no longer exogenous and does not appearin the equationfor the profit share.This share varies directlywith the value of capitalists'expenditure n real terms and inverselywith the maximumemploymentofdirect labour.



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A P P E N D I X

A positive propensity to save out of wagesSome of the assumptions made in setting up the model in the text wereintroduced for the sake of simplicity in presentation. They can be relaxedwithout affecting the general nature of the conclusions. With respect tosaving the critical assumption is not the absence of workers' saving but thedifference in the propensities to save'out of the two categories of income,profits and wages. This can be illustrated by considering a situation inwhich the propensities to save out of wages and out of distributed profits(rentiers' incomes) are the same. The propensity to save out of profitswould still be greater than the propensity to save out of wages, because ofthe retention by firms of part of profits.

Let s be the common propensity to save of individuals and /8 the pro-portion of profits distributed. The equation for total (desired) gross savingis now

S =1I(1 - 3) + sPfT+ SW, (la)and this replaces equation (11). All the other equations describing themodel are unchanged. By substituting the equations S = I and I = pI, inthe above equation for S, and rearranging,we have

I = p? + (1- s) 'an1-SW. (2a)The level of profits no longer depends solely on capitalists' expenditure be-cause workers no longer spend what they earn. It is equal to capitalists'expenditure plus workers' consumption out of their share of distributedprofits minus workers' saving out of wage incomes, as can be seen fromequation (2a). In order to express the level of profits as a function of theexogenous variables it is necessary to obtain from the full model an ex-pression for L, in terms of the exogenous variables. Solving for Lt fromequations (5) to (9) and (2a), we obtain

L - (1 + )I + aLO(1- + s-s) (3a)l=~~ a[t(l - + sp) + s] (aWhen this expression is substituted for L in equation (2a) we can obtain(since W = wLo ? wL1)H - ([(1 j)w(pJ- saL+) (4a)Finally, in order to obtain the profit share in total income, expression

(4a) is divided by the equation for Y(= (1 + IA)wL1) with equation (3a)substitutedfor L1. It is equal toH I-saL0 (5a)Y (1 + /i)I + aLO(1- 3+sf -sY(5)



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It can be seen from equation (4a) that, as in the main model, the levelof profits in the short period is positively related to the level of investment.By differentiating this equation with respect to s and /3 it can be readilydeduced that the level of profits is inversely related to the propensity tosave of individuals and directly related to the proportion of profits dis-tributed. With workers' saving, however, the level of profits as well as theprofit share is affected by the value for the mark-up.

A higher value for investment in terms of wage units increases the profitshare, even with the mark-up constant as in the basic model, because ofthe presence of overhead labour.Saving not in the desired relation to incomeAll the results derived in this paper have been based on a necessary as-sumption for short-period equilibrium, that saving is in the desired relationto income. When this condition is not satisfied, the equation for actualsaving, for the saving propensities used in this appendix, would then bewritten as

S = (1-la) + sIH + sW + S*, (lb)where S* #&.The equation for profits then becomes

H [1-p8 + s,f] = p- S* - sW. (2b)All the other expressions can be readily derived. Disequilibrium saving

St is seen to modify the effects of the planned level of investment in theseexpressions. For example, if S* is positive the employment in the shortperiod examined resulting from any given values for I and the propensitiesto save is lower, and both profits and profits share are lower. By specifyingthe factors determining S*, for example the time lag between changes inincome and changes in consumption, S* can be 'explained.' Introduction ofS* into the analysis does not change the nature of the conclusions.REFERENCES

Asimakopulos, A. (1969) 'A Robinsonian growth model in one-sector notation.'Australian Economic Papers 8, 41-58Asimakopulos, A. (1970) 'A Robinsonian growth model in one-sector notation

- an amendment.' Australian Economic Papers 9, 171-6Asimakopulos, A. (1971) 'The determination of investment in Keynes's Model.'This JOURNAL4, 382-8Asimakopulos, A., and J.-B. Burbidge (1974) 'The short-period incidence oftaxation.' Economic Journal 84, 267-88Bain, Joe S. (1956) Barriers to New Competition (Cambridge, Mass.:Harvard University Press)



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Income distribution/ 3 3 3Davidson,Paul (1960) Theoriesof Aggregate Income Distribution

(New Brunswick,New Jersey:RutgersUniversityPress)Eichner, Alfred S. (1973) 'A theory of the determinationof the mark-upunderoligopoly.'EconomicJournal 83, 1184-1200Hall, R.L. and C.J. Hitch (1939) 'Pricetheory and businessbehaviour.'OxfordEconomicPapers 2, 12-45Kaldor, Nicholas (1955-6) 'Alternative heoriesof distribution.'Review of Economic Studies23, 83-100Kaldor,Nicholas and J.A. Mirrlees(1962) 'A new model of economicgrowth.'Review of EconomicStudies29, 174-90Kaldor,Nicholas (1970) 'Somefallacies in the interpretation f Kaldor.'Review of EconomicStudies37, 1-7Kalecki,Michat(1971) SelectedEssayson the Dynamicsof the CapitalistEconomy (Cambridge:CambridgeUniversity Press)Kaplan,A.D.H., J.B. Dirlam,and R.F. Lanzillotti(1958) Pricing in BigBusiness- A CaseApproach(Washington:BrookingsInstitution)Kuh, E. (1960) Profits,Mark-UpandProductivity(Washington:StudyPaper No. 15, JointEconomicCommitteeStudy of Employment,Growthand Price Levels)Lanzillotti,R.F. (1958) 'Pricingobjectives n largecompanies.'AmericanEconomic Review 48, 921-40Lydall,H. (1971) 'A theoryof distributionand growthwith economies ofscale.'Economic Journal81, 91-112Mann,H.M. (1966) 'Sellerconcentration,barriers o entryand rates of returnin thirtyindustries,1956-60.' Reviewof Economicsand Statistics48, 296-307Neild, R. (1963) PricingandEmployment n the TradeCycle (London:CambridgeUniversity Press)Nordhaus,William D. and WynneGodley (1972) 'Pricing n the tradecycle.'EconomicJournal82, 853-82Nordhaus,William D. ( 1974) 'Thefallingshareof profits.'BrookingsPaperson EconomicActivity, 1974 169-208Nuti, D.M. (1970) "'Vulgareconomy" n the theoryof incomedistribution.'Reprinted n E.K. Hunt and JesseG. Schwartz,eds, A Critiqueof EconomicTheory (Hammondsworth,Middlesex:Penguin, 1972)Riach, P.A. (1971) 'Kalecki's"degreeof monopoly"reconsidered.'AustralianEconomicPapers 10, 50-60Robinson,Joan (1962) Essays in the Theory of Economic Growth (London.Macmillan)Robinson,Joan (1965) 'Kalecki andKeynes.'CollectedEconomicPapers3 (Oxford: Blackwell)Robinson,Joan (1969) 'A furthernote.' Reviewof EconomicStudies36, 260-2Rothschild,Kurt W. ( 1971) 'Differentapproachesn distributionheory.'Kyklos 24, 10-29Shackle,G.L.S. (1967) Yearsof High Theory(Cambridge:CambridgeUniversityPress)

asimakopulos, a. (1975). a kaleckian theory of income distribution. canadian journal of economics,...

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