The Kinetic Theory of Economic Crises 61 



pushed ahead. Preparations are therefore afoot for a new and 

 wider materialistic environment. 



The psychic conjuncture changes with the materialistic, but 

 not precisely pari passu, for it does not embody a complete visu- 

 alization of the materialistic. The subjective reality is not of 

 the highest type ; otherwise there would be no crisis. It is pre- 

 cisely in the failure of complete correspondence, parallelism, or 

 dualism, if you will, that exist the seeds of future crises. Thus, 

 in the ninth decade of the nineteenth century, the immense expan- 

 sion of the market fundamentally attributable to the stimulus of 

 the Bessemer process, necessitated a correspondingly extended 

 and more complicated organization. This was accomplished by 

 the putting of allied interests into the hands of trustees for the 

 purpose of carrying out a certain trade policy. This recognition 

 of the growing scale of productive and distributive operations 

 was quite justifiable and appropriate; but it was accompanied by a 

 largeness of view as to the future possibilities of trade that was too 

 elastic and volatile. While the magnitude of subsequent devel- 

 opment was not and could not have been exaggerated, the error 

 lay in thinking it would come too soon, and still more in not 

 allozving for quick changes in the inchoate materialistic conjunc- 

 ture that must intervene, and that might occur in any line of 

 production. 



Annihilation of space, economically considered, consists in the 

 traveling of men or in the transporting of commodities from one 

 place to another, in no time. Similarly, annihilation of time con- 

 sists in apprehending a future environment without the more or 

 less gradual space rearrangements and variations, mechanical, 

 chemical, geographical that must surely intervene; in other words, 

 it is economic prediction. It is precisely error in economic pre- 

 diction that has always formed the characteristic of crisis condi- 

 tions, and the eighties were no exception. Over-capitalization 

 was the expression of this error, which, while it formed the prin- 

 cipal theme of the fluctuating crisis process, was also so constant 

 an element as to form almost a feature of the psychic conjuncture. 

 There existed a constant tendency to overcapitalize (inflate or 

 "water" the nominal capital) ; but the manifestation of this ten- 



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