The Kinetic Theory of Economic Crises 59 



fixed institutions and improvements. Further progress must 

 either alter them or be based upon them. Consequently, a large 

 part of the future advance is conditioned upon the results of past 

 advance. Those results may themselves, however, in many cases 

 be altered. Still the further back man goes towards the lower 

 environments, in his efforts to change conditions, the harder will 

 it be to alter the environment ; the further forward he goes, the 

 easier will it be, and consequently the more will he be master of 

 his fate, fabcr suae fortunac. 



In order to understand a crisis, the theory of progress must 

 be understood ; without it we can neither understand the peculiar 

 nature of the crisis itself nor the gradual variations from a com- 

 paratively or short-time stato-normal condition that lead up to and 

 away from the crisis. The crisis is an integral portion of indus- 

 trial activity, and its phenomena are of the same laws and prin- 

 ciples working within the same categories as are recognizable at 

 each and every point of time. 



Looking at a crisis now, in the largest way, from the point of 

 view of the progress through successive environments, there is 

 but one discovery that can follow our quest : the crisis marks the 

 transition from one industrial environment or conjuncture to 

 another. The crisis-process clears the way for reorganization 

 and recommencement of activity within the new tentative envi- 

 ronment or conjuncture. Looking widely over a series of years, 

 it would seem as if this explanation was the simplest and fitted 

 the most cases. The ninth decade (1880-90) of the last century 

 witnessed the opening of vast further areas of the world's surface 

 to settlement and to the market of the world. The Dakotas, the 

 Argentine, and Russia were opened up. The crises of that dec- 

 ade were chiefly in confirmation or elimination of agricultural 

 areas and held off greater disaster till 1890-93. The same decade 

 also witnessed the opening of the mining regions of South Africa. 

 After 1893 there was for a number of years comparatively little 

 railway building. Industry of the tenth decade was busy living 

 in and exploiting the new materialistic conjuncture which the 

 previous decade had won. But a great new move towards further 

 territory is now on foot. Reserved lands, like Oklahoma, have 



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