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Reforming capitalist democracies: Which way?

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  • Bhaduri, Amit

Abstract

The debate about how to reconcile political with economic democracy is translated in the framework of wage- and profit-led growth in this paper. The inherent tension between providing sufficient profit incentive to motivate investment by the capitalist class and maintaining electoral accountability to the economically less privileged majority is examined through an analysis of policies towards raising the social wage. The paper shows how wider circumstances characterising a regime as wage- or profit-led is of consequence for determining the possibility of combining a higher profit share with a higher social wage through the effectiveness of such policies.

Suggested Citation

  • Bhaduri, Amit, 2020. "Reforming capitalist democracies: Which way?," IPE Working Papers 139/2020, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    • Handle: RePEc:zbw:ipewps:1392020
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    References listed on IDEAS

    as
    1. George A. Akerlof & Janet L. Yellen, 1990. "The Fair Wage-Effort Hypothesis and Unemployment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(2), pages 255-283.
    2. Bhaduri, Amit & Marglin, Stephen, 1990. "Unemployment and the Real Wage: The Economic Basis for Contesting Political Ideologies," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 14(4), pages 375-393, December.
    3. Amit Bhaduri, 2008. "On the dynamics of profit-led and wage-led growth," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 32(1), pages 147-160, January.
    4. S. A. Marglin & A. Bhaduri, 1991. "Profit Squeeze and Keynesian Theory," Palgrave Macmillan Books, in: Edward J. Nell & Willi Semmler (ed.), Nicholas Kaldor and Mainstream Economics, chapter 8, pages 123-163, Palgrave Macmillan.
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    More about this item

    Keywords

    Profit and wage led; social wage; investment; disinvestment; ideology;
    All these keywords.

    JEL classification:

    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • H40 - Public Economics - - Publicly Provided Goods - - - General

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