Politicians love investment. Partly it is the visual appeal: hard hats and construction projects make a great metaphor to illustrate how they will rebuild the country; a new science campus demonstrates the possibilities of the future; bridges and trains show how they are reconnecting a disjointed people. But the veneration of investment is a trap that many of us fall into: seeing it as the good kind of spending while consumption, its larger but less-loved brother, is unsustainable and unproductive. This perception, with its whiff of puritanism, is a mistake. A potential consumer-driven recovery from the pandemic is nothing to wring our hands about. 

Economists separate spending into two rough categories: investment and consumption. In this context investment does not mean buying financial assets but producing real ones — everything from constructing office blocks and oil rigs to designing a new user interface for a mobile app. These are all goods and services used in production and so the idea is that having more should, eventually, make a country richer. Consumption is everything else, from food to furniture. Its purpose, beyond the necessities, is to make our lives better in the here and now. 

The concern is that for all the enjoyment it provides, excess consumption means that societies are “eating the seed corn”, as the saying goes, failing to put aside resources that will maintain living standards into the future. Infrastructure spending or tax breaks that aim to boost investment are an easier sell as a route out of recession than stimulus cheques, which could be spent on frivolities.