Full text: Steedman versus Kalecki

STEEDMANN VERSUS KALECKI 
y / 
Ian Steedmann has presented an interesting critical comment on 
Kalecki's pricing theory. His arguments are built round one main 
idea:The circularity of production which means that many outputs 
become inputs in turn, and therefore prices become costs. This 
feedback is not taken account in Kalecki's reasoning. Steedmann 
therefore proposes that mark up pricing should be combined with 
input-output techniques in order to demonstrate how a price system 
is determined by the individual mark ups of the various industries 
and their interrelations. In this way we should see how the price 
obtained by marking up input in one industry becomes cost of input 
in other industries and ultimately, in a round about way, quite 
likely willl influence the cost of input in the industry in 
question. In practical application this involves a repeated 
calculation which hopefully will converge ultimately, but it 
threatens to be quite complicated. I hardly dare to mention the 
fact that according to Kalecki also the mark up in different firms 
of the same industry is different in principle, which certainly 
could be only inadequately taken account of by an average mark up. 
It seems to me quite essential that this input-output technique 
has to assume there is only one commodity for each industry. This 
automatically eliminates the noxious case of joint production. 
Steedmann makes this assumption quite clearly in the early section 
of his paper, but he promises to drop it in the later sections. If 
the reader turns to the last sections, in the hopeful expectation 
of finding there a positive theory of price formation under
	        

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