Wage-led and profit-led regime research – promising scientific research programme or scientific cul-de-sac?

Abstract

Over the past three decades, a small but very productive Post Keynesian and Marxian research community has engaged in the elaboration of a scientific research programme (SRP) that has come to be known as wage and profit-led regime research. The intention of this article is to examine whether this SRP can fill an obvious gap in Post-Keynesian theory: In accordance with Keynes’s considerable neglect of distributional questions in his General Theory, most Post-Keynesians have underemphasised a phenomenon that has become one of the most socially and politically concerning problems of our times: growing income inequality. It will be argued that neo-Kaleckian and neo-Marxian regime approaches have produced few helpful insights for policy procurement, and through their self-inflicted focus on functional income distribution have even distracted from more important questions of personal income distribution and the incorporation of wage policy into a strategy of coordinated macroeconomic policies to boost growth and employment.