WORKERS ARE PRODUCTIVE AGENTS. THEIR ECONOMIC PRODUCTIVITY IS ENHANCED BY INVESTMENT IN THEM. THE INVESTMENT APPROACH IS NOT ONLY A USEFUL BUT A VERY POWERFUL ORGANIZING CONCEPT FOR POLICY AND PROGRAMING. BY USING IT, ONE CAN IDENTIFY MAJOR MALINVESTMENTS THAT ARE A CONSEQUENCE OF PUBLIC POLICY SUCH AS--(1) IN AGRICULTURE, TOO MUCH HAS BEEN INVESTED IN LAND, RELATIVE TO WHAT HAS BEEN INVESTED IN FARM PEOPLE, IN TERMS OF THE SOCIAL RATE OF RETURN, (2) IN INDUSTRY, THE TAX INVESTMENT CREDITS ARE FOR EQUIPMENT AND STRUCTURES RATHER THAN FOR ECONOMICALLY USEFUL INDUSTRIAL SKILLS, AND (3) IN SCHOOLING AND OTHER INVESTMENTS IN PEOPLE, THE UNDERINVESTMENT IS PATENTLY MOST SERIOUS IN THE CASE OF THE POOR. THE COUNTRY NO LONGER SUPPORTS THE OLD UTILITY-OF-POVERTY DOCTRINE, WHICH HELD THAT POVERTY IS A USEFUL, NECESSARY, AND GOOD THING IN SOCIETY. HOWEVER, PROVISION FOR TODAY'S STRONG DEMAND FOR MORE PRODUCTIVE CAPACITY IS LIMITED BY OBSOLETE MANPOWER THINKING. IT IS ALSO LIMITED BY EDUCATIONAL MALINVESTMENT WHICH RESULTS IN LOW EARNING CAPABILITIES. SUCH MALINVESTMENT IS CAUSED BY (1) INSTITUTIONS SUCH AS SCHOOLS, THE STRUCTURE OF THE ECONOMY, AND THE FUNCTIONING OF THE CAPITAL MARKET WHICH DISCRIMINATE AGAINST PARTICULAR CLASSES OF PEOPLE, (2) DEMOGRAPHIC FACTORS, AND (3) ECONOMIC GROWTH BEYOND THE EDUCATION RATE. THE ECONOMIC GROWTH INCREASES THE DEMAND FOR HIGH SKILLS. WHAT NEEDS TO BE UNDERSTOOD ARE INPUTS OF PHYSICAL SORT WHICH ARE COMPLEMENTS OF HIGH SKILLS, THEIR RELATIONSHIP, AND THEIR SUBSTITUTION FOR UNSKILLED LABOR AND OLD FORMS OF CAPITAL. THE OPPORTUNITIES TO INVEST IN MAN ARE OFTEN BETTER THAN IN REPRODUCIBLE MATERIAL THINGS, AND THE INVESTMENT OPPORTUNITIES IN MAN ARE BETTER IN POOR PEOPLE THAN IN THE MIDDLE CLASS AND RICH PEOPLE. IT IS PRECISELY IN POOR PEOPLE IN THE UNITED STATES WHERE THE BEST UNEXHAUSTED INVESTMENT OPPORTUNITIES EXIST. A TRANSCRIPT OF A DISCUSSION PERIOD IS INCLUDED. (SL)