July 11, 2015

Profit theory and distribution formulas

Comment on ‘Some important limitations of income inequality data’


Blair Fix says in his post on the Capital-as-Power Blog: “For a long time now I've been bothered by the lack of a clear connection between capitalist income and inequality. ... I'm not sure why it took me so long to realize this, but last week I realized that corporate profits are not really a type of personal income.”

Exactly so. The familiar approaches are defective. In contradistinction, the superior structural-axiomatic approach starts with the equation total income is wage income plus distributed profit (2015, eq. (1)).* This gives one the theoretically well-founded distribution formulas (2015, eq. (55) ff.). For the correct profit theory see (2014).

Egmont Kakarot-Handtke

Kakarot-Handtke, E. (2014). The Profit Theory is False Since Adam Smith. What About the True Distribution Theory? SSRN Working Paper Series, 2511741: 1–23. URL
Kakarot-Handtke, E. (2015). Major Defects of the Market Economy. SSRN Working Paper Series, 2624350: 1–40. URL

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