The Kinetic Theory of Economic Crises 33 



stimulated by the free trade of the sixties and seventies. Compe- 

 tition had exhausted the whole field of investment, with the result 

 of low prices and low profits ; credit became cautious and 

 restricted, producers still more cautious in asking for credit; 

 economy was pushed to the last point, while the inventions that 

 could be looked upon as safe and "environmental" had reached a 

 limit. Material wealth was, indeed, rapidly increasing, but not 

 at an increasing rate. The psychic condition became intolerable, 

 aggravated as it was by a relative overproduction here and there. 

 The whole organism became supersensitive. The case is analo- 

 gous on the psychological side to traveling companions who have 

 been too long thrown together in each other's society ; they have 

 heard all of each other's stories, they know each other's points of 

 view; they become tire'd, then petulent, captious, fault-finding, 

 and finally a nervous breakdown occurs, followed by a disagree- 

 able separation, permitting new associations and fresh stimu- 

 lation. 



Professor Patten also has put forth the doctrine of the neces- 

 sity of industrial and social isolation for sake of the development 

 of the several communities. It is indeed interesting that eminent 

 authorities representing such different points of view should come 

 so near agreement. There is probably here a principle of sociaf 

 psychology in need of further investigation and better recogni- 

 tion. It would appear that industrial stimulation may advance 

 division of labor too rapidly ; for division of labor involves fixed 

 individual relations between producers, who have some right to 

 be heard upon any proposition to break up those relations, which 

 in old countries are quite institutional and hence environmental. 



33 



