chapter  1
Representative households or principal-agent capitalism?
Pages 13

But the assumption that workers get all the profits from firms in addition to their wages should simply change their behavior away from – possibly inefficient – real wage claims to the maximization of the output of firms, since this is the income they will get at the end of the day. But this would mean that they would indeed gain from real wage decreases, since this increases output, until the level of full employment has been reached. This is a kind of people’s capitalism as it flows from the assumption that workers are the owners of firms in a capitalist economy, a view that we do not pursue.