ABSTRACT
The long-run constancy of labour’s contribution to national income, namely the constant wage share, belongs to the so-called stylized facts of economic development. This ‘economic law’ is known today as ‘Bowley’s Law’.1 Many prominent economists belonging to a variety of theoretical schools refer to this law. For example, J. M. Keynes (1939), M. Kalecki (1938, 1954), P. Douglas (1934), P. A. Samuelson (1948), N. Kaldor (1955-6), W. Krelle (1962), O. Lange (1964), R. Goodwin (1967), J. Roemer (1978) and G. Mankiw (1997) all mention and use Bowley’s Law. The alleged constancy of the wage share resulted in reactions from astonishment,2 to the naive belief that it is a law of nature,3 as well as annoyance about the inability refute it.4 Bowley’s Law is still one of the most important stylized facts in macroeconomic theory and is applied to growth theory as well as to the major strands of the theories of functional income distribution. All these theories, which include the neoclassical, post-Keynesian and the Kaleckian approach to distribution theory, put forward arguments as to why income distribution does not change in the long run.
