The Kinetic Theory of Economic Crises 45 



V 



THEORY OF THE PROCESS OF PROGRESSIVE DIFFERENTIATION 



(Continued) 



B. Analogy of Stimuli 



The analogy of equilibrium by itself presents to us only static 

 views at intervals. We study disturbances and compensations. 

 If the international balance of merchandise is disturbed, then a 

 further disturbance of the balance of gold or of credit compen- 

 sates for the original disturbance. If the compensation is of 

 gold, this disturbs the money market in the countries from and 

 to which it is sent, through the effect on the respective guaranty 

 or reserve funds. These disturbances find their compensation 

 in the encouragement or discouragement of speculation or invest- 

 ment, as the case may be. But we do not, in the theory of equi- 

 libria, study the succession per se of these phenomena. We 

 consider whether at a given moment a surplus of wheat on one 

 side is balanced by a surplus of iron on the other, or whether a 

 difference of these surpluses is balanced by a surplus of gold, or 

 credit, or other merchandise. Thus we obtain a series of pic- 

 tures of static moments. If these pictures be taken at suffi- 

 ciently rapid intervals, an undoubtedly kinetic impression is pro- 

 duced. But it falls short of reality because the analogy and 

 hence the point of view are too physical, and also because even 

 in the physical analogy stress is not laid upon the order of occur- 

 rence of phenomena that roughly appear to be contemporaneous, 

 but which really begin successively. 



The environmental part of our study was purely objective. 

 We sought merely to catalogue contemporaneous phenomena. 

 As we shortened the time of our survey, objectivity became more 

 difficult and less important. It was no longer satisfying to know 

 that phenomena belonged together in groups. We were con- 

 fronted with a mass of phenomena that are always present in 

 greater or less degree. We find them fluctuating in quantity 

 from one category to another; pure objectivity demands that we 



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