“Getting out of the crisis: the role of Income Distribution” Symposium CEPN – Groupe AMPK “Post-Keynesian analyses and modeling” Saint-Denis, June 9th and 10st 2011 Growth and Income Distribution: How to Understand the Crisis and Really Get Out of It (if possible) Michel Husson (IRES) http://hussonet.free.fr

Neoliberal capitalism Three stylized facts Fall in the wage share / increased rate of profit 2. Stagnation of the rate of accumulation 3. Increase in the share of dividends

Wage share in value added USA + EU + Japan, 1960-2008 Average weighted by GDP Source: European Commission, Ameco Database 

The profit rate in the United States and in Europe. 1950-2008 Average weighted by GDP. Sources: National accounts

Profit and Investment USA + EU + Japan, 1960-2008 % of value added. Average weighted by GDP Source: European Commission, Ameco database

Net Dividends as % of the wage bill United States, France, United Kingdom, 1960-2008 Sources: Bureau of Economic Analysis, INSEE, United Kingdom Economic Accounts

Financialisation and Unemployment EU15 1965-2007 Source: European Commission, Ameco database

Wages and private consumption United States 1960-2008 Source: Bureau of Economic Analysis

Wages and private consumption European Union 1960-2008 Source: European Commission, Ameco database

Two “scissors” Profit / Accumulation Wage bill / Consumption Two explanations (not contradictory) Predatory finance Mismatch between social demand and capitalist criteria

The Post-Keynesian Firm under Financialization (Stockhammer’s Case) Thomas Dallery “Post-Keynesian Theories of the Firm under Financialization” Review of Radical Political Economics, Vol.41 n°4, 2009

A general scheme of analysis

Four major contradictions: towards a “chaotic regulation” Dilemma of distribution profitability vs employment  Dilemma of globalisation imbalances vs global growth Budgetary dilemma austerity vs social spending   European dilemma everyone for themselves vs coordination 

Growth, employment and unemployment EU15  2001-2015

Three questions

1. When incomes grows, who gains ? http://www.stateofworkingamerica.org/pages/interactive?/ Economic Policy Institute Between 1987 and 2007 Average incomes in the U.S. grew by $15,104 The richest 10% got 84% of that growth The bottom 90% shared 16%

2. Does growth really create jobs ? Productivity and growth - France 1950-2008

3. Is growth compatible with the goals for reducing CO2 emissions ?

Main ingredients for an alternative Priority to social needs change in the income redistribution reduction of working time Euroconvergence unified taxation of capital European budget for harmonization European minimum wage

A last question Can this “unleashed capitalism” be regulated ?