Beyond Profit-Led versus Investment-Led Capitalism: Marx and Kalecki on “Capitalists’ Consumption” and “Workers’ Savings”

Capitalist production and distribution processes change over time. Despite these changes, many heterodox theorists still view the economy largely in terms of profit-led or investment-led dynamics, which they attribute to the insights of Karl Marx and Michał Kalecki. This essay argues that these thinkers’ theoretical perspectives were more flexible than today’s theorists, adaptable to a changing capitalism. Marx and Kalecki explicitly entertained theoretical space not just for investment decisions but also for “capitalists’ consumption” and “workers’ savings,” broad categories that also participate in capitalism’s conditions of existence. By exploring this theoretical direction in the work of both Marx and Kalecki, by understanding these categories theoretically, and by tracking how these categories have changed empirically over time, this essay newly appreciates Marx’s and Kalecki’s theoretical contributions, enhancing our understanding of capitalism’s changes over the last fifty years.