Much has been said about income distribution in previous chapters. Two basic approaches to this have been outlined: the theories of Kalecki, Kaldor and Pasinetti which use Keynesian income flows to determine distribution, and the various theories which rely on the equation of the wage to the marginal product of labour — or, with vintage assumptions, to output per worker with the least productive plant in use. These approaches have produced results which are in many cases diametrically opposed to each other. As the theory of income distribution is, in Ricardo’s words, ‘the principal problem in Political Economy’,1 matters cannot be left in this unsatisfactory state. An attempt will therefore be made in this chapter to resolve some of the difficulties which are due to the opposed results of the two principal theories of distribution, and the theoretical chapters of this book will conclude with an account of the theory of income distribution which then emerges.
KeywordsIncome Distribution Marginal Productivity Capacity Working Full Employment Imperfect Competition
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- 1.Cf. J. Steindl, Maturity and Stagnation in American Capitalism (Blackwell, 1952), and Kalecki, Theory of Economic Dynamics.Google Scholar