Full text: Steedman versus Kalecki

aims and the outlook on economics of Kalecki and Steedmann. 
Kalecki was interested in application, that is he always tried to 
use concepts which had a direct counterpart in macro economic 
data. He was prepared to sacrifice a lot of precision and accept 
very crude approximation if only this enabled him to discuss 
things in terms of empirical data. Steedmann aims at formal 
precision, consistency and system,but he is not much concerned how 
an applied economist might fare if he applied his formally 
beautiful theories. Indeed, immagine an economist applying his 
input output matrix to the system of prices in the economy: Ill 
defined commodities, multiproduct industries, joint production, 
will make his task a torture. And he will not be in the enviable 
position of being able to assume a uniform mark up, therefore the 
difficulties are of a quite different order from that of a Sraffa 
price system. 
Let me now turn to a separate issue raised by Steedmann, the role 
of fixed capital, and the long run. He blames Kalecki for not 
taking into account depreciation, although he apparently 
recognises what a problematic concept that is ( I remember a 
lecture by Leontiew in which he said that depreciation is a 
concept used by the tax administration, it is not an economic 
concept at all ). But in so far as the business man takes into 
account depreciation he must do so before he invests, afterwards 
it is too late: It will depend on the market whether he will cover 
it. This considerable difference between fixed capital and other 
inputs is not appreciated by Steedmann. But he is perfectly right 
in thinking that there is reason for going beyond Kalecki in 
connection with overheads and with the long run, or perhaps better 
in connection with structural changes. I give two examples.

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