Demand

Aggregate demand depends on income distribution.  Profits, interest, rent and wages & salaries.  Profits can be retained for further investment, or distributed as dividends.  The wage earning sector (and here I include myself) consumes a fixed basket of goods.  (How far apart is my budget from the budget of my auto driver?).  But, doubtless, issues of quality supervene.

Assume that what is distributed as dividends is consumed away or on lent.  If lent, it can safely be considered as investment.  (Where are the figures for these magnitudes?)  (In the flow of funds accounts.)

So there is a stream of spending debouching on the market for goods and services, which can be usefully dichotomised into  basic and non basic goods and services.  There is a sector of the labour force engaged in the production of the basket of basic goods.  (Or do we, as in Leontief, consider all goods as basic?).  No, we cleave to the distinction between basic and non basic.  Then there is the sector of the population engaged in the production of non basic goods and services.  So the basic goods sector turns out the bundle of consumption needed to sustain the entire labour force.  And the non basic workers receive incomes from the spending of dividend income.  Thus can one separate the population into two classes-one of workers, and one of entrpreneurs.  The entrpreneurs can be distinguished by the fact that they have property.  Property to defend.  For which they employ henchmen.  And more non basic services.

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