Full text: From Stagnation in the 30s to Slow Growth in the 70s.

In fact, the railway was in the field of organisation and 
financeas much or more of an innovation than in technology. 
In my book I spoke of a redistribution of the profits of 
indu' stry in favor of the oligopolistic sector ( "maldistribution 
of profits" ). In the case of the railroads we seem to 
note more, a redistribution of capital market funds, credits, 
management talent; the bankers who sat on the boards of the 
railway corporations must have been heavily biased in favor 
of the megacorporation and against the finance of innovations 
in new fields and new enterprises. 
Moreover, the crisis of the railroads manifested itself 
in 1894 -98 as a consequence of a big recession which one 
may suspect to have resulted from a general shift to the 
oligppoly sector at the expense of consumption. 
Thus behind the argument of the dominant industry and its 
role in the decline there is again the more complicated 
action of oligopoly in the field of organisation. 
Let me only briefly touch on the central ideas of my book. 
0 p| 
I view competition more in the manner of the classics. 
¿u. The* /Urn- 
Competition has the function of eliminating excess capacity^ 
and it does this by cutting longrun profits at given utilisation 
of capacity( or Kalecki's "mark-up" ) . Restauration of a 
normal degree of utilisation and a normal profit margin 
thus goes hand in hand. 4"-The ■-long run to which the statements" 
p-ef-or io simply an avera-ge over the business cycle—)~.— 
Normal profit margins in this context are determined 
by the requirements of accumulation, i.e. what is necessary 
to finance investment. The latter, the accumulatio^n, is 
simply assumed to be given somehow by the preceding long term 
development of the economy and by exogenous influences. 
I insert here a very simple piece of algebra to clarify ideas.

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