The Kinetic Theory of Economic Crises 39 



The average expenses could be deduced «by dividing by the 

 amount of the commodity." 1 . . . This concept excludes that 

 of progress and hence that of a kinetic process. This is a 

 process, but a static process, one that is not becoming old rela- 

 tively to a newer one, nor new relatively to an older one; in 

 other words, a process that does not blend into environment, 

 but goes on monotonously making the same motions within the 

 same containing walls — the same old grooves and channels, the 

 same conjuncture. 



In the kinetic economy, however, which is not an abstraction, 

 but is reality, the conjuncture continually takes on a more psychic 

 character, and the process always keeps ahead, weaving a perma- 

 nent web, recombining old elements, making new and more com- 

 plicated combinations out of previous combinations, and putting 

 all its products to the test of acceptability to the environment — 

 the permanent results of past marginal effort. 



Primitive, physical, short-time causes will always produce 

 effects on man's welfare. For example, it is possible to trace the 

 effects of the vicissitudes of the weather upon the markets from 

 one year's end to the other. 2 It has been shown that modern 

 industrial crises have quite uniformly followed a period of defi- 

 cient rainfall. 3 On the other hand, it is a commonplace of eco- 

 nomic doctrine that man's welfare is rendered by progress less 

 and less dependent upon his physical surroundings. The better 

 the drainage, the regulation of streams ; the greater the preva- 

 lence of afforestation, of irrigation, of protection for live stock, 

 of veterinary surgery ; the better agricultural and mining machin- 

 ery and transportation methods, — so much the more secure is the 

 population in its supplies for material wants ; so much the more 

 is it emancipated from dependence on short-time physical fluc- 

 tuations. The short-time physical influences are then becoming 

 relatively less important than the psychic. If the community is 

 deprived of coal and hence of a most materialistic supply, due 



^Principles of Economics, 4th ed., vol. 1, p. 520. 



2 Professor R. de C. Ward, A Year of Weather and Trade in the United 

 States, Popular Science Monthly, September, 1902. 



S H. Helm Clayton, The Influence of Rainfall on Commerce and Poli- 

 tics, Popular Science Monthly, December, 1901. 



39 



