The Kinetic Theory of Economic Crises 19 



been described as "growing pains." Industry is not the same 

 after them as before them. New organizations are attempted, 

 new inventions are made and utilized ; business men adopt new 

 opinions, governments modify their economic policies. Never- 

 theless, the fundamental laws of production and distribution 

 probably hold true the same afterwards as before, only they are 

 understood in a still more fundamental sense. Competition is no 

 longer understood as the rivalry of small business concerns. 

 Stimulus is given for new inspection of every relation of life and 

 for a corresponding- rearrangement of views. It really does seem 

 as though the human mind was realizing an environment that 

 had already existed potentially, as though it had entered a house 

 that had always stood ready-furnished to receive it. A further 

 and more kinetic step in theory will be to determine how far the 

 mind adapts itself to a house already existing and how far it 

 creates the house. 



Crises are those economic phenomena most in need of the light 

 of kinetic logic. In order that we may understand them it is 

 necessary that we construct, provisionally, at least, a theory of 

 progress, since a crisis is essentially an episode of progress. In 

 accordance with the preceding theory of logic, some environ- 

 ments are low, others are high ; some are primitive, others are 

 advanced ; some are materialistic, others are psychic. The theory 

 of the crisis proper will therefore necessarily be preceded by the- 

 ories of the materialistic conjuncture, of the psychic conjuncture, 

 and of the process of progress. Into this more kinetic frame- 

 work the theory of the crisis proper will then be easily fitted. 



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