Economics

The problem with low growth in Less Developed Countries can be seen as memetic. That is firms underinvest and overcompete (without diversifying and obtaining economies of scope) due to the fact that all other firms do that due to copying behaviour. People follow the herd especially when there is high uncertainty.

An interesting part of Marx's Capital states that the process of a society becoming communist is partly shown by the existence of public companies which are owned by many shareholders. With the expansion of shareholder democracy it is likely that at some point in the future it will be possible to redistribute shares in all companies so that everyone has equal shares of all firms in an economy. This would be a kind of communism, very different to the state capitalisms most people normally associate with this kind of economic system. The command economy would be dispensed of, and instead a kind of laissez faire would exist with a state that was unnecessary since people's wealth could be used to procure public services like health and education.

The only problem would be when companies wish to expand. New investment in new types of goods or processes would have to come from retained profits and there would be difficulties raising foreign investment. People could reinvest some of their dividends in new projects though the scope for new investment would be low. On the other hand this is the most feasible type of socialism ever thought up, with efficiency of the market preserved alongside equity. Notably the means of production would be in the hands of the populace at large.

A neglected part of modern economics is asset prices. These impact on aggregate demand through expenditure from loans secured on assets or from sales of assets used for consumption and saving. Since assets are huge compared to an economy's GDP, about £6,000 pounds in the UK, this makes even a small rise, (house prices rise by an average of 10% per year) have a lasting impact on the economy. However, economics does not have a consistent rigorous theory which applies these facts into the determination of aggegate demand. Since assets are often used for investment, for example when a company sells shares, there is an impact on aggegate supply.