The Kinetic Theory of Economic Crises 15 



The kinetic method is essentially at home in the field of prog- 

 ress and prosperity, and lends to it new significance. It is 

 characteristic of this field, which the older economics recognized 

 indeed; but the static tools at command did not lend themselves 

 readily to the dimly foreshadowed problem. Those tools were 

 better adapted to the old categories, were characteristically 

 employed in them, and pretty closely confined the old economics 

 to them. It is a great triumph for Professor Marshall to have 

 introduced the newer method into them. 



The very thought of progress (in itself an assumption, if you 

 choose) implies motion. In dealing with it one must make allow- 

 ance for speed, as when a cowboy circles the riata above the 

 horns of a fleeing steer. The tool found, material can not long 

 be lacking. A general shifting and renewal of categories takes 

 place. The newer theories assume society as a whole to be in a 

 state of motion. They then investigate the effect of this motion 

 on the various categories. So far their "method differs from the 

 older chiefly in more systematically taking their start from the 

 provisional conception of society as a whole. 



The newness of the categories constitutes another and perhaps 

 more salient difference. Instead of materialistic interest, wages, 

 and land rent, we now have all economic phenomena reduced to 

 psychological categories of pleasure and pain, cost, surplus, pro- 

 ducers' and consumers' rents, the law of substitution, and the 

 like. Space and time are regarded more abstractly and meta- 

 physically. Well-being is thus dissociated from political, con- 

 stitutional, or traditional classes, and identified with the simple 

 economic elements of human nature. 1 



Other analyses, in retaining the old categories, expressly state 

 that their reasoning is static, and hasten to admit that a full 

 formulation of social action must comprise the distinct studies 

 (1) of the separate laws of progress and (2) of the laws of the 

 interaction of the kinetic laws of progress with the static laws 

 of distribution. 2 Only when these latter studies are completed 

 will that full picture be presented that will really bring theory 



X E. g., Professor Simon N. Patten, The Theory of Dynamic Economics. 

 2 Professor J. B. Clark, The Distribution of Wealth, ch. VII. 



15 



