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profit margins and (2) to discuss the modifications which 
may be necessary to adapt the theory to the post-war conditions and 
to go beyond the very specific assumptions I formerly made 
(closed system, negligible role of government, unemployment, 
large role of internal finance of business etc). 
Generally speaking I assume that the link between growth and 
share of profit exists. In the short run it is operated by 
changes in the rate of utilization. The same is very important 
also in the long run but there is also another link in the 
adaptation of % to the growth rate. 
Let us now deal with the case of a high rate of growth. This 
will evidently lead to full utilization and thereafter 
scarcity of equipment. It will be the ideal case for a profit 
inflation (increased X). In fact, Kaldor in his distribution 
paper (1954) apparently thought of a high growth rate as being 
financed in this way, although he was not explicit about the 
way in which it would work. 
However, looking at the post-war experience of various countries 
(excepting the first reconstruction years) it seems doubtful 
whether profit inflation played any lasting role. In fact, 
after full employment had been established for some time it 
seems that there was a strong force acting against an increase 
in profit margins (X) : Whenever a firm or an industry obtained