Kalecki’s Theory of Pricing: Notes on the Margin

Josef Steindl

Chapter 21 in Economic Papers 1941–88, 1990, pp 303-316 from Palgrave Macmillan

Abstract: Abstract Kalecki once said to me: In order to be useful a theory has to be simple. A good example of this simplicity is the mark-up. The concept corresponds to a practice which is familiar to business men; it has, therefore, a strong intuitive appeal. Theoretically its function is to enable us to distinguish between those changes in profit which result from the firm’s charging a higher price in relation to cost and those which are merely due to a larger turnover with given capacity — a fortuitous outside circumstance. The first follows from an increase in mark-up, not counting any response of demand (this corresponds to the ‘surplus value produced’ in Marxian terms), and the second from a change in the utilisation of a given capacity (this corresponds to ‘realised surplus value’ in Marx).

Keywords: Labour Market; Profit Margin; Export Market; Profit Function; Price Theory (search for similar items in EconPapers)
Date: 1990
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-20821-0_21

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DOI: 10.1007/978-1-349-20821-0_21

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