We consider a closed private economy, a two class model, ay
in which workers do not save. Let us define a vector gq
of the quantities. of the various commodities ( only final
products are considered, the econony is ingaägined to be
integrated, so that costs consist only of wages and salaries).
We write then for the gross national income Y and for the
wage and salary bill W the following eyuations:
Ala,
i= + wu!
(1)
(2)
A the price of each product, and J its) WEES End salary
cost per unit are vectors. The income Y and wage bill W
are given by the inner productos the vectors and are
therefore scalar. 1 is the unit vector and ware the
fixed wage and salary cost.
At the break even point q,
cost, we have therefore
(Hag Y/ag+ wf 1
From this follows that
(3-0 Ya, = W,
income equals wage and salary
\ _
J
(4)
The difference between equations (1) and (2) taking account
of (4) will give the profits ( a scalar ):
}
P=Y - w= (P- a - a,
\ J
We now make use of Kalecki's profit equation
P=T1I + (C
where I is the investment and C the consumption of capitalists
which we assume, for simplicity, to be independent of profits.