Investment Drives Economic Growth; Confidence Is Its Emotional Fuel

* Capitalists’ investment is the primary driver of economic growth and the reason capitalists are powerful. * Capitalism does not fear powerful capitalists. It fears capitalists who do not invest: if you simply want to hold on to your money for security, you are letting society down. * Government’s most important role is to encourage capitalists to invest. The tension between investment and reluctance to invest recurs throughout history. The decisive variable is “confidence.” If capital is the economic fuel of prosperity, confidence is its emotional fuel. Economic growth is always a game played by flesh-and-blood people, not some automatic mechanism. What role does government play in economic growth? Historical experience does not support the proposition that “as long as markets are left alone, entrepreneurs will automatically make the economy thrive.” History shows that capitalists often want to keep their money rather than invest it, and government has to find a way to act. Not through coercion, of course, but through measures such as fiscal and monetary policy. ---- Robin: “Investment drives national economic growth, and venture capital is at the forefront of investment that advances innovation and change. The state must act more proactively to channel capital into venture investment, making it an important force in moving the country toward the future.”