Mark Kleiman writes,

I’m worried about the tiny budget of the National Science Foundation and other basic-research enterprises, about an increasingly shoddy educational system, and about cooking the planet. The stock of capital plant and equipment, not so much.

In our forthcoming From Poverty to Prosperity, Nick Schulz and I present a lot of evidence in support of the view that intangible assets, including human capital and innovation, are significant sources of economic growth. Historically, economists have tended to focus too much on the role of savings and capital accumulation and not enough on these intangible factors.

However, one should not go too far in the opposite direction and ignore savings and capital accumulation altogether. Brad DeLong’s Macro textbook has an excellent chapter on economic growth. His chart showing the differences in the standard of living between high-saving and low-saving countries is persuasive evidence that saving is good.