Capitalism and democracy in the 21st century: A Kaleckian interpretation of a Schumpeterian problem

Douglas Mair, Anthony J. Laramie

    Research output: Contribution to journalArticle

    Abstract

    The paper reinterprets Schumpeter's views on the dynamic effects of taxation, as originally expressed in Crisis of the Tax State, from a Kaleckian perspective. In light of Schumpeter's rejection of Keynesian and Marshallian approaches to taxation, the paper argues that a recently developed Kaleckian approach provides an appropriate basis from which to analyse the effects on the business cycle of balanced changes in the structure of taxation. It is shown that, under certain shifting assumptions, increases in the taxation of wages or profits will stimulate investment and attenuate the amplitude of the business cycle. Ultimately, the shifting of taxes reduces to a conflict over income shares. The changing distribution of income in the United Kingdom in recent years suggests that investment is likely to remain sluggish unless there is a significant reversal of income shares. This may give rise to increasing economic and political tensions into the 21st century.

    Original languageEnglish
    Pages (from-to)35-48
    Number of pages14
    JournalJournal of Evolutionary Economics
    Volume10
    Issue number1-2
    Publication statusPublished - 2000

    Keywords

    • Business cycles
    • Dynamic tax effects
    • Income distribution
    • Kalecki
    • Schumpeter

    Fingerprint Dive into the research topics of 'Capitalism and democracy in the 21st century: A Kaleckian interpretation of a Schumpeterian problem'. Together they form a unique fingerprint.

    Cite this