Full text: Steedman versus Kalecki

STEEDMAN^ VERSUS KALECKI 
In nis interesting paper Steedmanft^ gives some advice - albeit in 
the form of strictures - to the followers of Kalecki: They should 
make use of the input-output techniques in connection with the 
theory of pricing and distribution. In this way they would realise 
that outputs are at the same time inputs, prices are costs, and 
the feedback from prices to cost, neglected by Kalecki, would 
become obvious to them. In a general system of pricing the prices 
obtained by marking up direct cost would again directly influence 
the cost of the material inputs and therefore the results of the 
marking up of other industries and ultimately also that of the 
industry from which we started. 
Let me now jump immediately to an algebraic equation of Kalecki 
which is criticised and corrected by Steedmanij. It relates the 
share of wages in the product w to the ratio of proceeds to prime 
cost ( the mark up plus unity ) k , given j the ratio of the cost 
of materials to the wage bill. 
2 + (k-1) (j-l) 
Steedmanix derives this equation ab ovo as it were from the price 
equations of the various industries,using the input output matrix 
so that he gets a feedback from the prices to the cost of 
materials and this leads him to correct the above formula by aE 
term which accounts for these feedbacks. It will be noted that we 
can do such a construction only in our imagination because we have 
no direct data for the mark upl Now the above formula is applied 
by Kalecki directly to the data of the Census of Manufactures in 
Ha 0^ '
	        

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