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April 10, 2018


Colum McCaffery

Michael, A question: when there is full employment, what's the point of investment?

Michael Taft

Colum - simply put, businesses and states invest or die (metaphorical). Investment is the acquisition or upgrading of assets to generate future income. Without this, growth will be lower. Take, for instance, fibre-optic broadband, or renewable technologies, or modern public transport.

At business level it is about acquiring new plant and machinery, or investing in new and upgraded skills.

Investment is the key to growth.

Colum McCaffery

Thanks, Michael. As you know, I'm not an economist but I try to engage with economic issues. Yes, I can see that new or up-dated assets require investment. My problem is growth when there is full employment; it puts an end to simplistic talk about job creation. You allude to investment priorities in your blog following this one. Investing in technology which will replace people makes social sense only if it generates at least some higher level jobs. Otherwise it pushes people into low skill/low pay employment and with full employment ... well, thanks be for the minimum wage!

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