What is Wrong with Heterodox Economics? Kalecki’s Profit Theory as an Example
9 Pages Posted: 23 May 2011 Last revised: 3 Jun 2015
Date Written: May 18, 2011
Kalecki’s profit theory has always been popular among heterodox economist 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.
Keywords: national income accounting, zero profit economy, distributed profit, income definition
JEL Classification: B50, E12, E25, B22, B41
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