The Consumption Imperative

Insight from James Livingston:

• Private investment doesn't actually drive economic growth.
• Between 1900 and 2000, real gross domestic product per capita grew more than 600 percent. Meanwhile, net business investment declined 70 percent as a share of G.D.P. What's more, in 1900 almost all investment came from the private sector whereas in 2000, most investment was either from government spending or residential investment, which  means consumer spending on housing, rather than business expenditures on plants, equipment and labor.
• According to the Organization for Economic Cooperation and Development, retained corporate earnings that remain uninvested are now close to 8 percent of G.D.P., a staggering sum in view of the unemployment crisis we have.