Policies of Stimulating Private Investment

Steindl, Josef

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Document type:: Works

Collection:: Josef Steindl Collection

Title:: Policies of Stimulating Private Investment

Author:: Steindl, Josef

Scope:: Typoskript, 6 Blätter; mit handschriftlichen Anmerkungen und Anstreichungen.

Year of publication:: ohne Datum

Language:: English

Topic:: Firm and market structure

JEL Classification:: D43 [Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection]

Shelfmark:: S/M.45.1

DOI:: https://doi.org/10.48671/nls.js.AC14446075

4 in order to decrease their margins to the point when they net of taxes still would get the same profityper unit of sales ( or even altogether ) as before. They were in this way able to get rid of the output of their increasing capacity without incurring losses. The following interrelation of the post-war investment history emerges. Beyond a certain point (when the possibilities of mere replacement of equipment were exhausted) the investments were creating new capcities which could be disposed of only in foreign markets and which made it necessary to pursue an aggressive price policy. Since all countries were doing in principle the same, the policy of stimulating private investment on a world scale could not produce any net global result. It would only lead to a redistribution of the markets in favor of those countries which were better placed ( mainly on account of their labour markets which made wage restraint possible ). One important implication of this interpretation is that the weakness of investment ( or rather,of effective demand ) has been endemic already in the 1960s and early 70s rather than breaking out only in the middle of the 70s; it had been veiled, in the better placed countries by their promotion of theexports, whereas in others, mainly tuisL itow England, ifr, w«-sr-actually felt for a long time. Another implication is that since exports in comparison to domestic sales were systematically favorud by the policy pursued by firms the proportion of home sales had to decline; since exports very broadly speaking equal imports on a world scale the proportion of imports to domestic sales had to rise which is what happened.

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