Full text: Distribution and Growth

13 
He also lays great stress on a characteristic feature of 
the oligopolistic industry: Financial uses of profit, in 
contrast to investment in real (reproducible) resources, 
play a large role for these firms. Their interest is very 
much more concentrated on take-overs, which promote the 
concentration process even more rapidly, than on real invest 
ment. The stimulus to real investment which profits ought 
to have is thereby lost nearly as much as with other financial 
c 4T-.4- D 2) 
uses of profit. 
1) It is true that the sellers of a firm, unless they merely 
receive shares, will get money which they might 
theoretically invest. But a good part of the funds passed 
on in take-overs is used to re-pay debts and thus only 
increases the liquidity of the banks. If received by 
shareholders it is far away from direct real business 
investment. 
2) American critics of Reagan have suggested that the 
additional net profits due to reduction of profits tax 
will only be used for take overs etc and thereby be 
lost for investment. Ronald E. Miiller and David H. Moore, 
America's blind spot: Industrial Policy. Challenge 
January/February 1982.
	        

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