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The Profit Theory is False Since Adam Smith. What About the True Distribution Theory?

23 Pages Posted: 20 Oct 2014  

Egmont Kakarot-Handtke

University of Stuttgart - Institute of Economics and Law

Date Written: October 19, 2014

Abstract

All popular schools lack a consistent profit theory. Economists have no true conception of the most important phenomenon in their universe. This methodological defect persists since Adam Smith. Therefore, the theories of income and wealth distribution are wrong by logical implication. If the conclusions of a theory do not find any counterpart in reality the fault lies in the premises. In order to rectify distribution theory it is necessary to substitute the conventional subjective-behavioral axioms by objective-structural axioms. A major result of the present paper is that distribution is not governed by marginal productivity but by the distributed profit ratio.

Keywords: new framework of concepts, structure-centric, axiom set, income distribution, wealth distribution, inequality

JEL Classification: B49, B59, D30, E25

Suggested Citation

Kakarot-Handtke, Egmont, The Profit Theory is False Since Adam Smith. What About the True Distribution Theory? (October 19, 2014). Available at SSRN: https://ssrn.com/abstract=2511741 or http://dx.doi.org/10.2139/ssrn.2511741

Egmont Kakarot-Handtke (Contact Author)

University of Stuttgart - Institute of Economics and Law ( email )

Keplerstrasse 17
Stuttgart
Germany

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