28 WORLD-POWER AND EVOLUTION 



It might seem as if economic and political causes were enough 

 to explain the ebb and flow of business, but business men them- 

 selves are apt to favor a psychological explanation. The greatest 

 study of mankind is man, they say, and business cycles are a 

 reflection of man^ mind. Of course bad crops do not improve 

 business, but after all, in these days of easy transportation, poor 

 crops would not do much harm if only people would not become 

 panicky. So, too, overproduction would not occur if people did 

 not have the curious habit of becoming overconfident. If one 

 man did this at one time and another at another, no great harm 

 would result. For some reason, however, when overconfidence 

 appears in one place, it appears also in others. It is almost like 

 a contagious disease. If it seizes men of influence it spreads 

 through the whole world of business. The same with depression. 

 So subtle is man's mind that the whole community is swept by 

 waves of fear which make large numbers of people restrict their 

 output, try to sell off their surplus stock, reduce their orders, and 

 keep their money in safe places instead of putting it into legiti- 

 mate business. Such causes, say the thinkers of the psychological 

 group, are much more important than either economic or political 

 factors in causing fluctuations in business. 



Until recently I was inclined to sympathize with the economic 

 group. While recognizing the importance of laws and of psy- 

 chology, I felt that economic conditions and especially the 

 volume of the crops are the most important cause of cycles of 

 prosperity and depression. Being anxious to discover the main 

 factors which influence the health of the community from year 

 to year, I reasoned that variations in rainfall and in other cli- 

 matic conditions are the cause of variations in the crops. There- 

 fore they must also be the cause of variations in the deathrate. 

 Bad crops are followed in a few years by hard times, so the 

 reasoning ran. During hard times many people are out of work ; 

 the children of the laboring classes are often ill nourished, there 

 is no money for medicines, delicacies, and doctor's bill; even the 



