Savings investment
Sir,—Your issue of March 15 reports Mr John Hunn, of the Development Finance Corporation, as saying, “the basic ingredients for investment were an entrepreneurial environment and effective facilities to mobilise savings for investment.” Would Mr Hunn give his answer to the following conundrum — A makes boots in a factory. His wages for a week are $lOO. During that week he makes one pair of boots. The price of those boots must be at least $lOO. He saves $2O. He invests the $2O in a shirt-making factory. B makes one shirt in the week and receives $2O in wages. The price of the shirt must be at least $2O. There are therefore goods on the market priced at $l2O. The total purchasing power however is only $lOO, the aggregate wages of A and B. How then are the boots and the shirt sold? — Yours, etc., A. MACKAY March 16, 1985.
[The Development Finance Corporation replied that it could think of no useful comment.]
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Press, 1 April 1985, Page 12
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164Savings investment Press, 1 April 1985, Page 12
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