Full text: Steedman versus Kalecki

Overheads have apparantly increased substantially in the post war 
decades (see the material given in Cowlings Monopoly Capitalism ) 
and the mark up has increased correspondingly. One might argue, of 
course, in the spirit of Baran-Sweezy, that the monopoly power had 
increased but the large concerns have used the potential surplus 
in order to spend on research, on sales cost etc with the aim of 
discouraging potential new entrants. I think, however, that we 
should recognise that the mark up contains a basic element 
determined by the amount of overheads which have to be covered if 
the business is to survive for more than a short time. Another 
example: It is recognised, I think, that in consequence of the oil 
shock the profits of the oil using industries would have increased 
enormously if the mark up had been unchanged. This certainly 
complicates matters in so far as we have to be careful in 
interpreting the ratio of proceeds to prime cost when long term or 
also sudden structural changes come into play. I have suggested 
that in those cases the break even point may be a better indicator 
of monopoly or market power ( Steindl 1990 ). 
In a number of cases such as with regard to vertical integration 
in the context of mark up pricing I agree with Steedmann. I also 
agree with him very much when he deplores that all too little has 
been done to follow up and develop the stimuli given by Kalecki.I 
would not, however, advise those who want to follow this path to 
go in the direction implicitly advocated by Steedmann, namely 
development of the formal side but rather empirical research in 
various special fields or markets based on the orientation given 
by Kaleckian concepts. I want to repeat what I said elsewhere: 
Price formation is so heterogenous that we can not expect very 
much from a general theory of pricing but rather more from a study 
Tkv-r In

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