This second point really relates to society's choice of output rather than
investment per se. We may choose to have more nonmarket output in the
form of cleaner air and less market output in the form of automobiles. If we
accept that choice; there is no reason to object to our diversion of investment
to the "production" of clean air. There is also no reason to increase
investment so as to have both the clean air and the additional automobiles.
The market may well be left free to realize our preferences in the total
basket of market and non-market services once the appropriate costs of
producing the non-market services have been imposed.