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What Is Wrong With Heterodox Economics? Kalecki?s Profit Theory As An Example

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Executive Summary

Kalecki's profit theory has always been popular among heterodox economist as an alternative approach to solve the paradox of monetary profits. In the present paper his formula 'The workers spend what they get, the capitalists get what they spend' is scrutinized for its logical and factual implications. The analysis shows that Kalecki's alternative approach points in the right direction but unfortunately shares a crucial conceptual error with standard economics. Since Veblen satirized the marginalists' conception of man as a 'Lightning calculator of pleasure and pain' heterodox economists have done thorough work in recovering and naming the weak spots of standard economics (see P?lsson Syll, 2010, for a topical overview). And there seem to be more than enough to fuel a thriving What-is-wrong-with-economics literature.

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