First, though, a word of thanks. When he was the editor of The National, Callum Baird gave me the opportunity to write a regular column here. All that writing was a productive investment: NUJ members will no doubt be appalled that I did it for free.
When Roosevelt spoke, hoarding had started to replace investment across the US. Poor people tried to withdraw cash from banks, causing runs when they all tried to do it at the same time. Wealthier people started to buy gold. When Roosevelt was campaigning during the depths of the Great Depression, the financial sector had stopped playing that role effectively. The New Deal was about government stepping in to the investment process because the private sector had become frozen with fear.There is also a problem of the financial sector failing to channel funds into productive investments because pure speculation is always easier.
When I encounter people who tell me that we need to increase productive investment, that’s really beside the point – I have yet to meet anyone who has set up in business with the objective of making unproductive investments. When money is footloose and can flow around the world, we would expect the supply of investment funds to flow to where there is demand. Stagnant labour productivity confirms that Scotland – like Britain – has been poor at generating that demand since 2008.