Rethinking the concept of investment and the future of work and welfare

Introduction

Social investment is today one of the dominant approaches for framing welfare reform among social policy scholars (e.g. Garritzmann et al., 2022; Hemerijck et al., 2023). This framework re-conceptualizes social policies as investments that create, mobilize and preserve ‘human capital’, thereby enabling people to be productive in the economy while protecting them in the face of disruptions such as unemployment and the dissolution of family ties. In contrast to the paradigm of austerity that aims to retrench the welfare state assuming that the latter is a burden to the economy, social investment highlights the positive contribution of social policy to growth and ‘competitiveness’ (Hemerijck et al., 2025). Despite the centrality of the notion of investment in this approach, the concept of investment is not discussed explicitly in the social policy literature. Filling this gap, Block (2024) has recently proposed a new definition of investment, grounding it on social investment and on feminist theories of social reproduction.

Block argues that the conceptualization of investment adopted by mainstream economics and government statistics is inadequate. He then proposes a more accurate definition, which highlights the economic value of social reproduction and welfare policies. As Block contends, the conceptualization of investment is not only academically interesting, but also politically significant: while existing measures of investment help to justify austerity, with his new definition, the arguments for austerity disappear. Thus, Block’s approach represents a great improvement with respect to dominant conceptualizations of investment and it has clear progressive implications in terms of gender equality and social justice. However, Block’s new definition also entails some important limitations, which are especially visible once ecological limits and issues of global justice are considered. In this article, I discuss the shortcomings of Block’s approach, offering an alternative conceptualization of investment. I proceed in three steps. The first section discusses Block’s proposal, highlighting the downsides of embracing the social investment approach to welfare reform. The second section shows how Block’s conceptualization avoids questioning the social-ecological utility of production, thereby offering an incomplete challenge to mainstream approaches and failing to achieve Block’s own broader scientific and political aims. The third section proposes an alternative conceptualization of investment – which also implies a different spatial logic. Retaining Block’s emphasis on social reproduction, I suggest looking at both social policies and the economy through the prism of care. Rejecting the paradigm of ‘competitiveness’ embraced by social investment, whereby the value of investments is determined by globally mobile capital, this conceptualization demands a democratic debate on the purposes of investment, re-focusing the latter on the improvement of habitation.

Rethinking investment?

Block (2024: 702) begins his discussion by arguing that investment expenditures are contrasted with other types of expenditures because they are ‘productive’ – as opposed to consumption that simply uses up what has been produced elsewhere and to ‘intermediate goods’ that are used in the production process but do not have the same generative power. Importantly, every economic paradigm makes its own distinction between productive and unproductive activities. For example, the Physiocrats in the 18th century believed that only agriculture was productive (whereas both commerce and industry simply used up resources produced by agriculture) and while through most of the 19th century economists defined banking activity as unproductive, in the second half of the 20th century, the financial sector was redefined as productive. From this perspective, disagreements about the proper operationalization of the investment category reflect different arguments ‘about what is productive and what is not productive’ (Block, 2024: 702).

The question of what counts as productive labor hence involves a centuries-long debate, which I cannot discuss here in detail. Marxists and heterodox economists, for example, have examined this issue in relation with both the measurement of wealth (Shaikh and Tonak, 1994) and the welfare state (Gough, 1979), whereas feminists have often highlighted the productive contribution of unpaid care work, which is usually performed by women within families (Folbre, 2008). In a recent contribution, Avent-Holt and Bailey (2024) show that while for classical political economists since Adam Smith, productive activities are those that contribute to the creation of material wealth, with the marginal revolution, the value of goods/activities is determined exclusively by the utility derived from consumption, that is, the satisfaction of desires. In this context, economists such as Thomas Carver, Alfred Marshall and Richard Ely, writing between 1890 and 1920, placed ethical limits on utility: adopting a moral framework that emphasized social goals rather than just individual ones, they argued for example against the production of luxuries, which were defined as unnecessary and wasteful (Avent-Holt and Bailey, 2024: 635–636). Yet, with the definitive separation of economics from ethics and the rise of national income accounting statistics centered on monetary market transactions as the dominant way of statistically representing economies, the approach that ultimately became dominant involved a ‘commodified utilities frame’, which defines as productive only those goods/activities that generate utility and are bought and sold on markets (Avent-Holt and Bailey, 2024: 637–638).

Having highlighted the variability of what is considered productive, Block argues that both economists and governments today embrace a distorted understanding of investment. For developing his argument, Block (2024: 708–710) builds on the social investment approach to welfare reform and on the feminist theory of ‘social reproduction’. The latter, in particular, points to the fact that both orthodox Marxism and mainstream economics incorrectly privilege production over social reproduction: the ‘process by which human beings are born, nurtured, socialized and supported over the life course’. This privileging is the result of a masculinist worldview that devalues the activities that have predominantly been performed by women. Yet production is always dependent on reproduction: without reproduction, no production is possible. On this basis, Block (2024: 710) defines investment as all of the expenditures of money and time required to enhance the capabilities of the population to be productive in the future. This alternative conceptualization not only provides a more persuasive account of what activities are productive with respect to mainstream economics, it also revises our understanding of the relative role of business, government, household and nonprofit organizations in the economy. Indeed, on the basis of empirical data, Block contrasts the measurement of investment following standard government statistics – informed by mainstream economics – with a calculation of investment derived from his new approach. The results show that households and governments are the source of most investments in the economy, challenging the widespread assumption concerning the pivotal role of private capital. Business investment is less than a third of total investment. Moreover, business investment is heavily dependent on prior investments by households and governments. While simply changing the definition of investment without challenging power structures cannot promote social justice, the policy implications of Block’s results are huge: showing that business investment is not the key engine that powers the economy, these findings undermine arguments for austerity, for example, that states cannot increase taxes on capital because doing so would discourage private investments with negative consequences for society as a whole.

Despite its merits, this new definition of investment involves some problems from a social-ecological perspective. In particular, highlighting the economic contribution of social policies risks extending the economic logic to non-economic domains. Clearly, this is not Block’s purpose. Yet this process of ‘economization’ is evident in the social investment approach to welfare reform (Laruffa, 2022). Social investment reframes social policies as investments that: (a) enhance people’s ‘human capital’ (including that of children, who are conceived as future workers), thereby contributing to growth and ‘competitiveness’; and (b) prevent or solve social problems such as crime, homelessness, low education, illness and unemployment that are reconceptualized as economic costs for the public budget. In turn, reinterpreting social policies as investments that deliver returns (in terms of productivity, employment and savings for the public budget) implies that it is possible to attract for-profit private capital for financing these policies. Thus, through financial instruments such as ‘social impact bonds’, social reproduction becomes an area of profit-making.

Paradoxically, social investment is more progressive than austerity precisely because it involves higher degrees of economization (Laruffa, 2022). While the austerity paradigm implies a rigid distinction between a profit-oriented economic sphere and a social sphere oriented toward the realization of non-economic goals, social investment downplays this distinction, highlighting the economic value of social goals. Yet economization transforms these goals, for example, implying an instrumental view of children and women and focusing education on enhancing work-related skills rather than on education for wellbeing, autonomy or democracy (e.g. Fernandes, 2025; Lister, 2003; Saraceno, 2015). In this way, social reproduction is ‘valorized’ in capitalist terms rather than truly ‘valued’ (Dowling, 2016). The risks linked to the economization of social reproduction echo those associated with the attempts to highlight the ways in which nature contributes to the economy (Dempsey, 2016). The general problem is that of accepting the capitalist framework, whereby only what is profitable is valuable.

One solution to the problems of economization is to acknowledge that social policies involve economic costs to achieve non-economic goals. This strategy, however, risks framing the welfare state as an unproductive burden on a ‘productive’ economy, thereby reinforcing arguments for austerity. Another possibility is to re-think the concept of investment, assessing both social policies and the economy on the basis of a social-ecological rationale and interrogating what it means to be productive in the first place.

Beyond social-ecological agnosticism

On the basis of this discussion, I argue that the main problem with Block’s definition of investment is that it remains agnostic with respect to the purpose of production. Since investments aim to enhance the capabilities of the population ‘to be productive in the future’, there is no ethical-political assessment of the ends of production, that is, of its social-ecological utility. In this way, however, this approach fails to acknowledge that production is often destructive in social-ecological terms. For example, in order to show that investments by governments encourage private investments, Block (2024: 719) highlights how government investments in ‘highways and airports stimulated massive private sector investment’. Since we now know how unsustainable the practices of using private cars and frequent flying are, these examples show the risk of a ‘neutral’ conceptualization of investment. Thus, Block’s challenge to mainstream economists remains limited. Block’s approach focuses on ‘being productive’, without questioning whether endless production is possible or desirable. However, ‘being productive’ is not an end in itself: everything depends on what is produced and how. In particular, once ecological limits and issues of global justice are considered, it becomes evident that societies need to downscale those economic sectors producing unnecessary goods that are ecologically destructive – even if these sectors are profitable – while reinforcing those essential sectors that guarantee universal access to necessary goods and services, even if doing so is not profitable (Bärnthaler and Gough, 2023; Hauge and Hickel, 2025). Rather than a generalized reduction of economic activities, this approach thus forcefully acknowledges the need to expand the life-sustaining sectors of the ‘foundational economy’ (The Foundational Economy Collective, 2018). Yet those parts of the economy that are socially and/or ecologically harmful need to be drastically diminished or eliminated entirely.

Hence, as Marxists have argued, the definition of ‘production’ depends on its specific ‘mode’. While the capitalist mode of production is profit-driven, a needs-oriented economy (to which Block probably aspires) is perfectly possible. However, since Block’s definition of investment does not specify the purpose of production, the risk is that capitalist, profit-oriented markets will ultimately determine what constitutes a ‘productive’ contribution to society – as in the social investment approach to welfare reform. Addressing this problem requires re-opening the debate on what is productive – a debate that was closed by the rise of ethics-free economics and of national accounts centered on monetary market transactions (Avent-Holt and Bailey, 2024) – promoting social-ecological ways of conceptualizing utility.

Block’s approach ‘does not privilege reproduction over production’: it treats production and reproduction as ‘equally important’, simply recognizing that they depend on each other (Block, 2024: 709–710). Embracing those versions of social reproduction theory that ‘demonstrate that work that has historically been devalued as unproductive is, in fact, economically productive’, Block expands the realm of the economy, including also the social reproduction sphere with a view to valorizing the latter. Yet I argue that doing the opposite – using the logics of social reproduction and care to reframe the economy – would better serve not only the goal of advancing global social-ecological justice, but also Block’s own ultimate analytical-scientific aims and political vision.

Indeed, Block’s re-interpretation of investment is part of the broader project of understanding and promoting the ‘habitation society’ (Block, 2025). He derives the concept of habitation from Polanyi and uses it for re-focusing the political economy on the (paid and unpaid) work aimed at creating, maintaining and improving the infrastructures of human communities. Block’s redefinition of investment is thus based on his long-standing interests in Polanyi and the political possibilities opened by post-industrialism (Block, 1990). Building on Polanyi, Block (2003) argues that the economy is always ‘embedded’: there is no autonomous economic sphere that functions according to its own laws, that is, the economy is always politically malleable. Pushing the assumption of the always-embedded economy even further, Block (2018) rejects the concept of capitalism itself, as a capitalist economy also does not follow inherent laws and can be politically modified.

Yet, while capitalism is socially embedded, it implies that the power over socioeconomic matters is highly concentrated in private hands (Laruffa, 2025). The problem then is not (only), as Block argues, that capitalists’ investments are small, but (above all) that capitalists capture the benefits of all investments – even when they are undertaken by others – because they detain the power to define what is productive. In this context, all types of investments – including those undertaken outside the sphere of the market (e.g. within families) and following non-economic logics (e.g. parental love) – are valued according to their contribution to a profit-oriented economy. Indeed, following the theory of ‘human capital’ (which also informs the social investment approach to welfare reform), even parents’ affection and care directed toward their children can be framed as investments (Foucault, 2008: 229). From this perspective, capitalism refers to a type of society that authorizes the formal economy to pile up monetized value for owners, ‘while devouring the non-economized wealth of everyone else’ (Fraser, 2022: xv). This is why asking capitalism to pay for social reproduction is calling for the end of capitalism (Bieler and Morton, 2021): capitalism structurally relies on the exploitation of its non-economic preconditions, including natural resources and un-/under-paid care work.

However, the fact emphasized by Block that the economy can be reformed allows reconstruction of the economy according to social-ecological principles: rather than ‘economizing’ the social, it is possible to ‘eco-socialize’ the economy. Rather than highlighting the economic value of non-economic entities – ultimately letting capitalist markets establish what are valuable investments – this strategy demands democratically debating investment/divestment choices. This argument reflects Block’s own calls for extending democratic control over investment decisions and increasing the role of non-profit financial institutions (Block, 2014, 2019, 2025). Thus, while he does not state it in these terms, Block – in contrast to social investment theorists – embraces a post-capitalist understanding of what is productive, as he is implicitly arguing that only those activities that positively contribute to habitation are productive.

Post-productivist investment and the future of work and welfare

Building on social reproduction theory, it is possible to re-interpret the economy as a system of ‘social provisioning’, thereby focusing on those goods and (paid and unpaid) activities that are necessary to sustain life and fulfill social-ecological needs (Dengler and Plank, 2024; Power, 2004) – which clearly echoes Polanyi’s ‘substantive’ approach to the economy that Block supports. From this social-ecological perspective, all economic activities are evaluated through the prism of care and habitation, whereby caring is ‘everything that we do to maintain, continue, and repair our “world” so that we can live in it as well as possible’ – and that world ‘includes our bodies, our selves, and our environment, all of which we seek to interweave in a complex, life sustaining web’ (Fisher and Tronto, 1990: 40). Instead of highlighting the economic value of social reproduction – or recognizing it as an essential precondition for economic production – this approach puts care at the very center of social, political and economic life (The Care Collective, 2020), subordinating production to social and environmental reproduction (Barca, 2020). This perspective has significant implications for the future of work, as the ecological crisis demands putting the work of care and repair at the core of the economy (Carr, 2023). But this broad definition of care can also include ‘creation’ and ‘improvement’. Hence, while Polanyi saw a contradiction between ‘improvement’ and ‘habitation’, a social-ecological approach should – following Block (2025) – aim at overcoming this dichotomy, focusing on the improvement of habitation.

This approach rejects the ‘productivism’ that treats production as an end in itself because of two central problems (Fitzpatrick, 2004: 214–215). The first concerns the ‘emotional value expressed in an ethic of care’. Indeed, care work has an economic value, but the latter ‘is not its primary rationale’, as it involves emotional value; for example, we do not have children ‘in order to populate the future of the economy’. The second concerns the ecological value. Like the value of care, the value of nature can be to some extent quantified and even expressed in terms of monetary value, but ultimately ecological value transcends economic value. The strategy of reframing social-ecological goals in productivist terms can promote those goals to some extent – and indeed progresses have been made, for example, in terms of gender equality and green technologies. However, the transition to a fully social and green version of capitalism is yet incomplete. While one could call for better incorporating social-ecological values within the capitalist framework, ‘there is a question mark over whether the solution to the problems of productivism is yet more productivism’ (Fitzpatrick, 2004: 218). Fitzpatrick (2004: 216) places the emotional value of care and the ecological value of nature under the joint heading of ‘reproduction’. Recognizing that reproductive value is the foundation of economic value, he also argues that the latter is subordinated to the former. Thus, according to his doctrine of ‘reproductivity’, economic growth is justified if and only if it can be demonstrated that it enhances emotional and ecological values: reproductivity does not deny the importance of productivity but subjects it to ‘non-productivist’ criteria.

In such a post-productivist perspective, the concept of investment then refers to a ‘commitment to the future’ (Jackson, 2021: 138) – even if investing in the future is also a way ‘to render our own lives meaningful today’. In particular, ‘care investments’ allow maintenance of the ‘everyday fabric of society’ (e.g. homes, hospitals, schools and systems of provision for food and other necessities of life) whereas ‘creative investments’ produce ‘communal space, meeting places, artistic venues, works of art’ (Jackson, 2021: 141–142). This post-productivist conception of investment clearly echoes Block’s ideas of the non-profit, democratically accountable investments of the ‘habitation society’.

On this basis, I propose the following definition of investment as all of the expenditures of money and time required to enhance the capabilities of the population to care for the world and improve habitation.

While the notion of ‘improving habitation’ refers to Polanyi, the concept of ‘capabilities’ – which was already present in Block’s definition – explicitly connects this conceptualization to Amartya Sen’s capability approach. Rejecting both the commodity-based theories of classical political economy and the utilitarian-subjectivist framework of the marginalists discussed at the beginning of this article, Sen (1987) offers the possibility to re-think the purpose of economic activities in terms of the expansion of people’s real freedom to lead valuable lives.

The risk of this definition of investment is to partially blur the distinction between investment and consumption, as caring for the world includes caring for oneself. Thus, this conceptualization can be criticized for being vague and underspecified. However, as Sen (1987: 34) argues, it is better to be ‘vaguely right’ than ‘precisely wrong’, and ‘relevance’ should have priority over ‘simplicity of use’. Moreover, this conceptualization of investment is intentionally open-ended: it calls for a democratic debate on what it means to ‘improve habitation’. That is, the capability to care for the world inherently entails the necessity to democratically decide what is worthy of care (Laruffa, 2026). Thus, this definition is not immediately operationalizable because it aims to encourage democratic deliberations on the purpose of investments. As such, the focus on improving habitation also involves a different spatial logic with respect to ‘social investment’. Adopting a productivist interpretation of the capability approach, social investment embraces the paradigm of competitiveness (Hemerijck et al., 2025), thereby accepting the ‘entrepreneurial’ regime of governance that sees states/regions/cities competing for attracting globally mobile capital (e.g. Peck and Tickell, 2002). In this paradigm, international markets are the authority establishing where to invest and what to produce. In contrast, the improvement of habitation demands subordinating the economy to social needs, providing infrastructures and services in a democratically accountable manner (Block, 2025).

However, while the definition of investment I propose is open-ended, it can be operationalized through the estimation of the social-ecological utility of production. For example, the New Economic Foundation (2009) calculated the value of different professions for society and found that some of the most low-paid jobs contribute hugely to society whereas some of the most highly-paid ones are harmful: while for every £1 earned by waste recycling workers £12 in social value is generated, tax-accountants destroy £47 for every £1 in value they generate. These examples show again the importance of making explicit the purpose of production in conceptualizing investment in order to ensure that investments aim to realize democratically-defined social-ecological goals, rather than the objectives defined by profit-driven markets.

Conclusion

Given that economic theories are hugely influential in how societies are governed, the conceptualization of economic categories is politically significant. The conceptualization of investment seems especially relevant given its future-orientation, which can shape the direction of social change. Moreover, while ‘social investment’ has become one of the dominant approaches for framing welfare reform within the social policy literature, a serious discussion on the concept of investment is missing in this literature. For all these reasons, Block’s recent attempt to re-think the concept of investment is important.

In order to highlight the relevance of social reproduction and social policies, Block’s definition emphasizes the economic value of these domains – that are usually devalued as unproductive – showing how they actually contribute to make people ‘productive’. However, the danger of this strategy – which is especially evident in the social investment approach to welfare reform – is that of extending economic criteria to non-economic domains. Thus, since Block’s definition remains agnostic with respect to the purpose of production, the risk is that capitalist, profit-oriented markets remain the final arbiter of what constitutes a productive investment. Thus, I argued that Block’s scientific-political project of the ‘habitation society’ – which largely coincides with that of advancing social-ecological justice – is better served by the opposite strategy: that of extending the logic of care to all socioeconomic relations. I thus proposed a post-productivist conceptualization of investment as all of the expenditures of money and time required to enhance the capabilities of the population to care for the world and improve habitation.

In terms of spatial logics, this conceptualization replaces the enhancement of competitiveness that informs the social investment approach with the improvement of habitation. Rather than framing ‘capacitation’ in relation to people’s economic agency and to the ‘capacity to compete’ in the global market (Hemerijck et al., 2025), this definition refers to a post-productivist interpretation of the capability approach, which places the ‘capability to care for people and planet’ center-stage (Laruffa, 2026).

This conceptualization of investment thus inverts the party that bears the burden of proof: it is not the sphere of social-ecological reproduction that needs to be legitimized in monetary terms for its contribution to a profit-oriented economy, but it is the latter that is evaluated according to its contribution to social-ecological value. Hence, both the economy and social policy are assessed against the same standard: the improvement of habitation. But while welfare states already focus on satisfying essential needs (often ecologically), it is the profit-driven economy that usually overproduces useless goods/services and underproduces needed goods/services.

Like Block’s definition, a post-productivist conceptualization of investment highlights the generative power of expenditures by households and governments, thereby undermining arguments for austerity. This approach, like Block’s, also highlights how small the portion of private investment actually is – and considering that only some profit-driven investments improve habitation whereas many others undermine it, this portion is even smaller than in Block’s account. However, a post-productivist understanding of investment also avoids the problems of economization, while re-politicizing the private economy: this approach interrogates the purpose of investments – whether public or private – requiring democratically evaluating them according to social-ecological criteria, that is, in terms of their contribution to sustain and improve life.