Chapter 8 – Distribution

On a country-by-country basis, the highest level distribution is that of total income between placement income and labor income. Year after year, what is the share of overall income that the market economy tends to maximize? Is it placement income or income from work?

If it is that of labor income, then the increase in average labor income is not only faster than that of total placement income, but also even faster than that of total income.

The study of the distribution of total income, based on definitions that are acceptable in the logic of finite sets, shows which is the most important economic aggregate, country by country. It is conceptually simpler and fiscally more honest than GDP.

The objective political economy examines two other distributions:

One is in the next chapter, Chapter 9, the distribution of total labor income. It is more and less and less unequal. But the evidence that makes it so is not part of the doctrine in force. A power that the economic system confers on the social body is usurped.
In Chapter 11, the other distributions are, in the selling prices of the undertakings, those of common costs and contributions to the final result.

A new way of examining the problem of the latter distributions finally solves a problem of principle and identifies a general law. The problem is that of the objective exchange value of most of the services and goods sold by firms.

This general law is that of the tendency, engendered by competition when the market authorities want it, to equalize the rate of return of the same membership. Many prices then become closer to their target level.

The distribution of private wealth gradually becomes less unequal when each of the three distributions studied in chapters 8, 9 and 11 follow their normal course.

But this normal course is inherent only to the market economy in a regime of full trade, first of all both in terms of shareholders and wages.

Chapter 8 – Distribution

Propositions