September 26, 2016

True or false: income=wages+profits? False

Comment Lars Syll on ‘Stiglitz and the demise of marginal productivity theory’

Blog-Reference

The trouble with distribution theory started with Ricardo who got the distinction between wage, profit and rent wrong (2011). Then Marx got the class theory of profit wrong (2014a). Neoclassical marginal distribution theory, of course, is unsurpassable idiotism, but Keynesianism did not perform much better, and Heterodoxy has actually multiple profit theories that do not fit together.*

Yes, distribution theory has always been the deepest morass of economics. For the correct approach see (2014b).

Egmont Kakarot-Handtke

References
Kakarot-Handtke, E. (2011). When Ricardo Saw Profit, He Called it Rent: On the Vice of Parochial Realism. SSRN Working Paper Series, 1932119: 1–19. URL
Kakarot-Handtke, E. (2014a). Profit for Marxists. SSRN Working Paper Series, 2414301: 1–25. URL
Kakarot-Handtke, E. (2014b). The Profit Theory is False Since Adam Smith. What About the True Distribution Theory? SSRN Working Paper Series, 2511741: 1–23. URL

* See ‘Heterodoxy, too, is scientific junk