Yesterday I spoke at Nesta’s Future Shock conference, focusing on the UK’s poor productivity record, and the part played in that by under-investment. You get the future you invest in.
This comment from Keynes, in a 1945 memo to the War Cabinet, went down especially well: “If by some sad geographical slip the American air force (it is now too late to hope for much form the enemy) were to destroy every factory on the North East coast and in Lancashire (at a time when the directors were sitting there and no-one else), we should have nothing to fear.” Keynes was, however, fearful about the country’s likely ability to export, and thus repay war debts, in the years ahead. He was all too well aware of what he called the ‘antiquated inefficiency’ of British factories.
The Bank of England’s recent working paper on productivity attributes about a quarter of the 16 point shortfall compared to the previous trend to measurement problems, the rest to low investment, ‘impaired resource allocation’, and fewer closures of inefficient businesses than is normal during a downturn.
The quotation comes from Donald Moggridge’s, and I think it is also in the Roy Harrod volume, , rather than the better-known Robert Skidelsky one – I can’t find it paging through Volume 3, . My favourite recent book about Keynes isn’t a conventional biography but a biographical reflection on his relevance today, by Roger Backhouse and Bradley Bateman.
[amazon_image id=”0415127114″ link=”true” target=”_blank” size=”medium” ]Maynard Keynes: An Economist’s Biography[/amazon_image] [amazon_image id=”0333779711″ link=”true” target=”_blank” size=”medium” ]John Maynard Keynes: Fighting for Britain, 1937-1946 v.3: Fighting for Britain, 1937-1946 Vol 3[/amazon_image] [amazon_image id=”0674057759″ link=”true” target=”_blank” size=”medium” ]Capitalist Revolutionary: John Maynard Keynes[/amazon_image]