THE VITA THEORY OF THE PERSONAL INCOME DISTRIBUTION AND POWER

E Ray Canterbery

Chapter 10 in Inequality and Global Supra-surplus Capitalism, 2018, pp 151-165 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Industries’ ability to pay a demanded wage is enhanced by its ability to impose price markups on the consumers. The industrial union’s power tool is the wage rate rather than the labor supply. This means that, in the short run, employment is not related to the wage rate and the wage rate is related to employment only if full employment extends across all labor. Therefore, a high wage can be associated with a high unemployment rate, because employment is decided by technology and effective demand rather than by the marginal product of labor. This process was so deeply imbedded in the economic system that it too a four-year global recession (1979–1982) to slow wage (and price) inflation in the United States. History went into reverse beginning with the Great Recession (2007–2009), from which we have yet to experience a full recovery. Power was ceded by labor unions to the giant corporation.

Keywords: Capitalism; Production Surpluses; Supra-surpluses; Casino Economy; Inequality; Vita Theory; Great Recession; Subsistence; Minimum Wage; Markup; Kaleckian Power; Stagnation; Innovation; Technological Advance; Income Distribution; Wealth Distribution; Fiscal Policy; Monetary Policy; Incomes Policy; Zero-interest Rate Society; Trump; 2016 Campaign; John Kenneth Galbraith; Conventional Wisdom; Expectations; Budget Shares; Veblenian Demand; Engel's Law; Casino Effect; Economic Power (search for similar items in EconPapers)
JEL-codes: N00 (search for similar items in EconPapers)
Date: 2018
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