 In a new article in the Harvard Business Review entitled The Capitalist's Dilemma, Christensen and his co-authors worry that managers and private investors are sitting on cash, are accumulating capital, and are overly reluctant to invest it because they're afraid of taking the big risks that a market economy really needs. The basic problem for many of these writers is that they don't recognize scarcity, opportunity costs, and trade-offs. Christensen and his colleagues explicitly argue that wealthy countries, the U.S. in particular, are awash with capital, that there really is no scarcity of capital, that firms are sitting on too much, they're not investing as much as they should to bring about the right degree of innovation and growth for the U.S. economy. But who's to say what's the best use of those resources? If they're sitting on cash rather than putting it into highly speculative and potentially unprofitable ventures, is the decision of managers and investors, well, that may be the right decision, and that's certainly their decision to make. In fact, if we think of the incentives of government investors and firms receiving government resources to innovate, we see that they're fraught with a number of hazards and difficulties. Moral hazard, for example, government investors and private investors using government funds will tend to take far bigger risks than those who are investing their own resources because government officials, they reap the benefits if those investments pay off in prestige and fame and other rewards, but they don't bear the cost because they can simply keep those projects quiet. Private investors weigh the costs and benefits equally because they reap the benefits and bear the costs. A frequent criticism both from Christensen and from Madrick and many others is that private investors are taking too short a perspective. Christensen and his colleagues call for a tax on high-frequency trading to encourage investors to take a long perspective rather than a short one. But again, this raises the fundamental question of what is the right time horizon? How patient should investors be? Should they be looking at short-term returns, medium returns, or longer-term benefits? In a free market, investors, managers, consumers, entrepreneurs, and other participants are free to work this out amongst themselves. Some will choose to invest in shorter-term projects because they value early returns over longer ones while others will prefer to take a longer horizon. There's no reason to have a one-size-fits-all solution and certainly no reason for government planners to impose their own preferences for risks and rewards and for the time horizon on the rest of us.