Effects of taxation on money distribution

Conservation Laws, Financial Entropy and the Eurozone Crisis

“…It may also require a higher fraction of profits reinvested in fixed capital to sustain such extraction. From (7) we see that such pattern of development would lower the equilibrium profit rate.…”

“…When the relative emission rate, g E − g α , is positive, the pollution level is rising. This acts negatively on the productivity of labour in the agricultural sector, which again would lower the equilibrium profit rate (7). Furthermore, for a given living standard, it would necessitate an increasing share of labour expended in the production of wage-goods consumed by the population as well as in pollution management.…”

“…The equilibrium profit rate (7) tells us that the growth of labour g L therefore ceases to be a source of profitability, it is rather the specific balance of investments λ and productivity growth g P that can sustain conditions for average profitability in the capitalist sector. This depends on the specific technological phase of an economy and its institutional structure of investments.…”

“…As the demographic transition is completed and production technologies mature, the growth rates of labour, g L , and productivity, g P , become moderated. Then it becomes increasingly difficult to maintain average profitability when firms are reinvesting a large portion of their retained profits, as seen in equation (7). Fig.…”

“…In the face of this constraint we see a set of displacement processes: Figure 9: Actual net productivity growth g P and the growth g * P required to sustain average profitability at the level in 1964, under actual trends of demographics and investments. Using (7), g * P = λR 1964 − (g L + d). Figure 10: Average profit rate R and the equilibrium profit rate R * , in four major Western European economies.…”