The Kinetic Theory of Economic Crises 77 



VIII. The physical analogy suggests primarily the laws of the 

 changes in industrial equilibrium. The concrete movements that 

 take place in the industrial relations of different geographical 

 areas, classes, products, and businesses, and in consumption, may 

 here be described with a view to ascertain the order of their 

 adjustment and readjustment to each other. 



IX. The biological analogy suggests primarily the laws of 

 stimulation. These laws are fundamental to the process, for they 

 determine the disturbances in industrial equilibrium. They can 

 only be rightly apprehended by a thorough revision, in the kinetic 

 sense, of the theory of credit. The conception of credit must be 

 reduced to its simplest terms in the business man's promise. It 

 will be found that promises are made coincidently with the sav- 

 ing of surplus goods, and that they act and react in waves and 

 cumulatively upon business and industrial progress. 



X. The crisis is a normal exhibition of the culmination of the 

 stimulative process. Its theater is the market: the culmination 

 of stimulation suspends abruptly the part-market for future goods, 

 which usually is the more important; the part-market for money 

 now endeavors imperfectly to fulfil both the demands upon the 

 market for future goods and those usually made upon itself also. 



XI. From the environmental point of view the crisis is the 

 door between two conjunctures. Those industrial experiments 

 are eliminated that do not harmonize with the new conjuncture. 



XII. The crisis process is one of social solidarity ; it is a gen- 

 eral movement all along the line ; it is not, in its essence, an over- 

 production of goods, but an overproduction of promises. - 



77 



