Abstract:This paper offers a critique of the concepts of “wage-led” and “profit-led” growth based on an application of the circuit of capital macroeconomic framework. Wages are shares of capital outlays sustaining production and circulation of goods; profits are shares of sales. This ensures that the functional distribution of income and the level of output are jointly conditioned by the measure of aggregate demand relative to capital outlays. It is spurious to attribute causal significance to associations between functional distribution and output. The paper develops a series of comparative exercises to consider the relationships between the real wage, output, and distribution once functional income flows are understood not as a sharing of output but in relation to the expenditures funding them. This generalizes and challenges neo-Kaleckian appreciations of those relationships. Finally, the paper advances a new analytical and policy taxonomy concerning growth and distribution, centered on the distinction...