Full text: Steedman versus Kalecki

Correspondingly the mark up is defined as ratio of proceeds to 
prime cost. Now the above equation is in fact a macro economic 
identity in the same way as the saving-investment equation in its 
various forms. What gives it meaning is the assumption that the 
supplying manufacturer controls the mark up k, he is a price 
setter not a price taker, that is the theory. On this assumption 
the equation tells you that the share of wages is a decreasing 
function of the mark up, given j, the ratio of materials to wages. 
But here is a difficulty: j is in fact dependent on the mark up in 
basic industries which produce the input of many other industries. 
This is clearly recognised by Kalecki ( see Theory of Economic 
Dynamics p.29 ).In fact,it seems to me the difficulty is pretty 
much the same as that uncovered by Steedmann, so it is not new. An 
increase in j will however further decrease the share of wages so 
that when all the mark ups increase or at least do -net decrease 
the share of wages will fall. No doubt the case where some mark 
ups increase and others decrease will be more difficult to judge 
and require looking into the data for individual industries.For 
Kalecki,in contrast to Steedmann, the relations between the 
various industries where of secundary interest. He looked at the 
data for manufacturing as a whole as given by the census which are 
obtained simply by adding the corresponding data of proceeds,prime 
cost and wages for the individual firms. He might have assumed, 
with a great deal of approximation, that the various adjustments 
and feed backs mentioned above had already been accomplished in 
the set of data before him, so he could use them for comparing the 
ratio of proceeds to prime cost in different years. No—doubt the 
data and his interpretation leave a lot of questions open. I 
should however at this juncture try to confront the styles, the

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