Category Archives: Michael Kalecki

Debunking Marx’s “Exploitation”; The “Iron Law” of Consumer Expenditures; (CWL 15, footnote 34; CWL 21, ftnt. 14 [Editor’s Intro] and 87)

In explaining the normative pure cycle of economic expansion for which the process has a systematic exigence, Lonergan redefinedcosts” and “profits”,

There is a sense in which one may speak of the fraction of basic outlay that moves to basic income as the “costs” of basic production.  It is true that that sense is not at all an accountant’s sense of costs; … But however remote from the accountant’s meaning of the term “costs,” it remains that there is an aggregate and functional sense in which the fraction… is an index of costs.  For the greater the fraction that basic income is of total income, the less the remainder which constitutes the aggregate possibility of profit.  But what limits profit may be termed costs. Hence we propose ….to speak of (c’O’  = p’a’Q’) and (c”O” = p”a”Q”) as costs of production, having warned the reader that the costs in question are aggregate and functional costs…. [CWL 15, 156-57] Continue reading