Reflections on Kalecki’s Dynamics

I do not have much to say about Professor Sawyer’s study (Chapter 17), because I tend to agree very much with most of his very balanced views. There is, however, one point which I would like to comment on, and that concerns his figures on the profit share. He shows that, contrary to what many Kaleckians might expect, the period of the 1960s and 1970s did not produce any increase in the mark-up or profit share in spite of the fact that there was a lot of concentration in this period. His figures, I think, do not very accurately measure Kalecki’s mark-up because they are all more or less influenced by the degree of utilisation. You might guess, although this is perhaps a speculation, that there has been a decline in the degree of utilisation over the whole of this period. This might agree with his figures in so far as they show an increase in the capital — output ratio in this period. As far as purely technological factors are concerned, there are no particular reasons for that. My feeling is that the so-called ‘productivity of capital’ should have increased during that period owing to technical progress and that therefore there is a presumption that the increasing capital-output ratio means nothing else but a decline in utilisation. That would tend to explain the decline in the profit share and profit rate which he shows. Now of course you might ask that this should be supported by data on capacity utilisation. I cannot remember whether data show any tendency of the kind mentioned, but we have to take into account that data on utilisation are usually rather imperfect; they measure more or less well the changes within the business cycle but they are very unreliable as far as changes in the trend are concerned.