Savings, Investment and Finance in Kalecki’s Theory

Jan Kregel

Chapter 11 in Kalecki’s Relevance Today, 1989, pp 193-205 from Palgrave Macmillan

Abstract: Abstract ‘Thus capitalists, as a whole, determine their own profits by the extent of their investment and personal consumption ... capitalists as a whole do not need money in order to achieve this’ (Kalecki, 1971, p. 13).1The first part of the above quotation will be recognised as Kalecki’s well-known aphorism that capitalists ‘get what they spend’, that they cannot decide to earn more, they can decide only to spend more. Workers can neither decide to earn more, nor spend more than they earn: they ‘spend what they get’. This aphoristic representation of Kalecki’s position emphasises its difference from Keynes’s explanation of the same phenomenon. Keynes relied on the propensity to consume and the marginal efficency of capital to explain aggregate expenditure via the concept of effective demand predicated on monetary factors determining the rate of interest; the distribution of income had only secondary importance. Kalecki, on the other hand, gave centre stage to the role of income distribution in determining aggregate expenditure and, as the second half of the opening quotation indicates, considered money to be unnecessary to his results.

Keywords: Interest Rate; Banking System; Money Supply; Bank Credit; Aggregate Expenditure (search for similar items in EconPapers)
Date: 1989
References: Add references at CitEc
Citations: View citations in EconPapers (1)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-10376-8_11

Ordering information: This item can be ordered from
http://www.palgrave.com/9781349103768

DOI: 10.1007/978-1-349-10376-8_11

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().