Ian
---- Just for clarity, profit is a flow of income, consumption is a flow of spending, but "net savings" is a change to a stock (e.g., the current value of my bank account). The Kaleckian identities don't hold out of equilibrium. -------------- Paul Are you sure, I am pretty certain that as accounting identies they hold for any finite time period ------------ Ian In general although total effective demand (from workers and capitalists) always returns as income (either wages or profits) nonetheless during its circulation the effective demand may transfer from one class to another. Given that: Profits + Net savings by workers = Capitalist consumption Then if net savings by workers are positive then workers are earning more than they spend. Assume the total stock of savings in the economy is constant (i.e., conservation of monetary value). Then net savings by workers (the change in stock) necessarily implies net dis-savings by capitalists (a corresponding change in stock). So capitalists must be earning less than they spend. In other words, the above equation can be written as: -------------------------------------------- Paul ----- I dont think you can leave investment out. If there is workers savings, firms may be financing investment out of funds provided by workers savings ---------------------------- Net savings by workers = Capitalist consumption - Profits which is equivalent to Net savings by workers = Net dis-savings by capitalists I'd suggest that this describes a situation where the distribution of income is moving in favor of workers. In other words, the workers are "winning the fight" over the material surplus. Does this help at all? ---------------------------------- I think you have oversimplified by leaving out investment, what you can validly assume is that capitalists would be taking on financial obligations to workers. _______________________________________________ ope mailing list ope@lists.csuchico.edu https://lists.csuchico.edu/mailman/listinfo/ope The University of Glasgow, charity number SC004401 _______________________________________________ ope mailing list ope@lists.csuchico.edu https://lists.csuchico.edu/mailman/listinfo/opeReceived on Thu Apr 8 10:24:56 2010
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