Show By 1 George Hagedorn j w Tile The following excerpts Ire are from George Hagedorn's Hagedorns s 's testimony before bei be be- i fore a congressional II committee concerning abill a I bill that would declare a d national policy on investment in the private ate sector f Hardly Hardy anything else is is as important in in n determining the future Ii j well-being well of our people as the amount which currently Is-currently set aside to i 1 f provide the tools machinery plant and other assets which will be used in the in In the of ofu ofu J h t productive process years to come framing u u ft 1 governmental economic policy this subject has usually been left as a J r peripheral consideration or an afterthought The importance of the subject doesn't mean however that government gov gov- ty I. I emment should assume a major role in planning and controlling the process of private investment In Jn fact fact it t means mean the opposite j r In the normal course of events decisions to invest or not to invest i il in specific ways in the private sector are made by private individuals 4 The total amount invested in any period then emerges as the overall f result of such private decisions rather than of directed centrally efforts efforts ef ef- forts to attain some preplanned target amount f j I c y The Most Efficient Mechanism This is of course not notto to say that investment decisions in the private sector are ordinarily not guided in any rational way and not coordinated coordinated systematically so as to achieve results which are in the thet theft thet t ft t economic interest of the nation as a whole On the contrary private investment decisions are guided and coordinated by the most efficient f t social mechanism ever developed namely developed namely the private market tem tern It would be a mistake to supplant the market system by a nat national na t investment policy which would seek to direct the process of private investment either to insure attainment of some overall goal decided upon by government or to allocate the total of national in investment investment in vestment as among its alternative uses j 7 In other words private business investment is of such critical im im- importance r to our economic future that we cannot take the risk of allow 1 ing government to supervise however supervise however the benevolently the investment invest ment process Instead like other crucial aspects of economic behavior behavior behavior-as as for example prices and wages wages wages-it it must be left to the free market system v None of this should be taken as meaning that Congress should forget about the whole subject of private sector investment on the ground that it is best left to the direction of the free market The sad 5 j fact is that past and current actions of government have severely re restricted restricted restricted re re- and distorted the creation of capital in the private sector It U is the he removal or oral at least the mitigation of such obstacles to investment that should be the central objective of any national investment policy rather policy rather than affirmative government action to reach numerical goals When you contemplate programs for removing obstacles to lo investment investment invest invest- ment you have to ask first of all how we can improve the general performance of the he economy This raises questions of the gov government conduct of practically all aspects of economic policy policy fiscal fiscal policy monetary policy regulatory policy etc When you have answered all aU these questions not only will you have the key to better economic performance you generally you will have nine tenths nine tenths of the solution to th the problem of encouraging better growth in capital investment |