Full text: Steedman versus Kalecki

order to compare the ratio of proceeds to prime cost for various 
years ( note that Kalecki avoids the use of price or unit costs 
in this context in view of the vagueness of such concepts in the 
case of macroeconomic data ).He does not worry about aggregation 
because the Census has done that by adding up the data for the 
individual firms. Nor does he have to worry about feedbacks 
because he can plausibly assume that these adjustments have As 
already been carried out in reality when the data were 
collected.In my view the equation is a macroeconomic identity in 
the same way as the investment-saving identity. What gives it 
meaning is the theory that tne manufacturer controls the mark 
up,that he is a price setter, not a price taker. The equation then 
tells you that the share of wages is a decreasing function of the 
mark up, given j the ratio of materials to wages. But there is a 
difficulty: j is in fact dependent on the mark up in basic 
industries which produce the material input of many other 
industries. This is clearly recognised by Kalecki ( see Theory of 
Economic Dynamics p.29 ). In fact, it seems to me that this is 
pretty much the same difficulty as Steedmantys feedback so that 
this is not such a new discovery. There is little harm in this 
difficulty as long as some mark ups increase and none decrease 
because then the increase in j will decrease the share of wages 
further which will thus be a decreasing function of the mark up.If 
however, some mark ups increase and some decrease the result will 
be uncertain. We shall then have to look at the various industries 
in detail on the basis of the same Census material. 
Before we go on I have to refer to a detail which for me is not 
easy to understand. While discussing the share of wages Steedmarity 13b 
suddenly switches to the real wage, states that the two could move

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