The Kinetic Theory of Economic Crises 55 



VI 



THE THEORY OF THE CRISIS 



A. The Relation to the Conjuncture 



In the preceding sections an attempt has been made to suggest 

 some of the conditions and processes of economic progress, in 

 order that we might inquire in what respect, if any, the crisis 

 presents a variation from the stato-normal. Why have crises 

 received, comparatively speaking, so little attention at the hands 

 of economists ? Why has the consideration of their theory been 

 left so largely in the hands of writers beset by prejudices, — men 

 of the ax-to-grind order, men with panaceas? Why have the 

 former feared to tread where the latter have so signally failed? 

 The cavalier treatment of crises by economists indicates preoccu- 

 pation with other problems. We do not regard as important 

 that which we do not see clearly. But lack of perception is as 

 likely to be due to a lack of appropriate method as to an absence 

 of the external object. In other words, the habit of static logic 

 renders it hard to perceive aught that is kinetic. Those facts and 

 occurrences that are amenable to static thought have received 

 quite thorough analysis at the hands of economists. The 

 suppositions of free competition and that "other things are 

 equal" (i. e., unvaried) lend themselves to the physical concep- 

 tions that "the whole is equal to the sum of all its parts," and 

 even in emergency, that a change in one side of an equation must 

 be accompanied by a change in the other side. Thus, after mak- 

 ing allowance for an elaborate series of premises and contin- 

 gencies, we may conclude that there are certain relations between 

 wages, profits, interest, and rent. We may even go further and 

 note that an increase in population, capital, and inventions may 

 have various effects on those relations. But we obtain thereby a 

 superficial conception of economic change. Economic progress 

 does not consist, as Mill 1 is forced by his system to suppose, in 

 increase "in production and in population" alone. Industrial 



^Principles, bk. IV, ch. I, sec. 1. 



55 



