May 23, 2011

What is wrong with heterodox economics? Kalecki's profit theory as an example {05}

Working paper at SSRN

Abstract  Kalecki’s profit theory has always been popular among heterodox economists as an alternative approach to solve the paradox of monetary profits. In the present paper, his formula ‘The workers spend what they get, the capitalists get what they spend’ is scrutinized for its logical and factual implications. The analysis shows that Kalecki’s alternative approach points in the right direction but unfortunately shares a crucial conceptual error with standard economics.