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Is the Share of Income of the Top One Per cent Due to the Marginal Product of Labour or Managerial Power?

  • Marta R. M. Spreafico
Chapter

Abstract

Marta Spreafico in this chapter, titled ‘Is the Share of Income of the Top One Percent Due to the Marginal Product of Labour or Managerial Power?’, argues that the last 30 years have seen a rapid increase in the share of income of the top one per cent, especially in the USA. This has led to increasing concern in some quarters about the consequences of the increase in income inequality. However, for a long time, neoclassical economics has generally ignored the problem. This is largely because of its uncritical acceptance that all employees, including the highest paid, are paid their marginal products in competitive labour markets and receive their ‘just deserts’. The recent increase in overall inequality is also attributed to skill-biased technical change and the race between technology and education. These explanations are examined in light of empirical and theoretical arguments that question the existence of the aggregate production function and the marginal productivity theory of distribution. It is concluded that the explanation for the increase in income of the top one per cent must lie elsewhere such as an increase in managerial power.

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Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Marta R. M. Spreafico
    • 1
  1. 1.Institute of Economic PolicyUniversità Cattolica del Sacro CuoreMilanoItaly

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