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PROP. DR J . TINBERGEN

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The Hague,8 SeptemlDer 195^
Sijzenlaan 1+1

Mr Roy Blough,
Department of Economic Affairs,
United Nations,
New York

Dear Mr 31ough,
In reply to your letter of July 23 I v/ant to
thank you for having sent me a copy of the intereslng draft report on "the processes and prolDleras
of industrialization". Since the quality of the
report seems to irie to he excellent I have only some
small comments to make,
I wonder whether something could be said
abont the usefulness of studies showing the probable
pattern of demand as a consequence of increased incomes. What I have in mind is the sort of general
market studies made on goverranent or international
level which might serve as an orientation to the
investor, A good deal of the techniciue I have in
mind has been mentioned in one of the ECLA reports
published last year.
On page 165 of part I, line 2 and 3» it might
be useful somewhat to elaborate t>.is point. What I
have in mind is certain minimum t.iuantities of power
and transportation tl-iat would be needed complementary
to any industrial process. It follo'(!'/s that some
investment in power and transportation will always
be necessary although these two industries are
highly capital intensive. The maxime that investments
should be in labour intensive industries should
therefore be applied to such combinations of industrial
products pov/er and transportation as are technically
inseparable.
On page 61 there may be some use in mentioning
the concert of absolute capital shortage, meaning
that the covmtry has less capital than it would need
even to employ its population.in the least capital
intensive processes available,
, ^ ^, a.
Another question I would like to make is that
participation of the governraent in the capital of a
new industrial plan may be a way to stir.iulate private
initiative. I think the Netherlands showed in their
own industrialization policy the workability of such
a policy. In the moment when it was considers vital
to industrialization to have a rolling mill private
business was not able to supply the capital. The government supplied a large portion of it and I think business
was satisfied about this gesture.
Two very unimportant reiiarks are my last ones:
Could the table on rjage 6k be splitted up into countries
also ? It might then even replace page 62. And, finally,
it might be useful to have a register where the reader
may find references to the definition of certain terms,
such as "secondary industry.
You may see from my comments that they are
mainly meant as an indication of my interest. I can
easily imagine that there are sound reasons not to go
into the quetions I put.

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