With lower wages, simultaneous industrialization would not be profitable because of a lack of aggregate demand. In their model, the rich demand high-quality goods, the production of which offers little scope for increasing productivity, by contrast, the middle class demands standardized goods produced through mass manufacturing, where most productivity gains occur. Hence, a reduction of income inequality has positive effects on economic growth because it increases demand for products with growth-enhancing properties. For example, a high level of inequality may lead to social upheaval and increase the crime rate, which create uncertainty among investors, erode property rights, raise transaction and security costs, and reduce growth (Venieris and Gupta, 1986, Benhabib and Rustichini, 1996, Grossman and Kim, 1996, Bourguignon, 1998).