Accumulation under conditions of inequality

Abstract

This paper presents a Keynesian analysis of accumulation under conditions of inequality in the UK and USA where household savings are channelled into corporate securities. This form of saving is dominated by the comfortable classes in upper income households whose behaviour indirectly encourages the UK and USA corporate sectors into merger and acquisition. A broader discussion of trajectory and results brings out the risk of instability in a coupon pool type of capitalism where the stock market operates like a giant Ponzi scheme. In the UK and US cases, the policy implication is that it is foolish to give the stock market a larger role in provision for retirement through schemes which encourage or enforce increased savings by lower income groups.