ABSTRACT
This chapter deals with effective demand, income distribution, and the social provisioning process. This is at the level of the economy as a whole. It's almost like macro in the way people think about micro and macro. The neoclassical approach to the micro-macro relationship is to make micro and macro coherent with each other. They do it by reducing macroeconomics to microeconomics. That's not a fault, that's certainly a way they can make it coherent. Many heterodox economists believe that micro and macro are unrelated. Producing more consumption goods versus investment goods or government goods is non-constrainable. Clearly, income distribution is not between households and business enterprises. Business enterprises get their profits from investment goods and getting basically profits from governments in an indirect way with savings and financial assets, which they distribute to households. The notion that enterprises make so much profit or workers make so much wages is an irrelevant scenario.
