Prosperity and Depression.pdf

Chap. 7 Agri~Nihire and the BtisinesJ C.J&"It is not necessary, in order to establish a causalOther vinlS connection between agricultural output and theas to the business cycle, to assume a cyclical movement inrelation agricultural output itself. Fluctuations in cropbefJIeenyield or in the output of live-stock and animalagrim/tm-e products may be regarded as analogous toinventions,and bu./inl./s. wars, earthquakes, etc., which appear at irregularintervals, and set in motion cumulative processesof expansion or contraction in the industrial system, or altemativelyreinforce or retard a concurrent expansion or contraction.Harvest fluctuations which do not happen to coincide with aturning-point in the business CYcle will tend rather to disturb theperiodicity of the cycle than to determine it.The above may be presumed to be the view taken by ProfessorPIGOU 1 and Professor ROBERTSON,I since, though they treat harvestvariations as important potential causes operating to precipitatecumulative upward and downward movements, they attribute tothese cumulative processes a life of their own with periods deter~mined-in part-by psychological and other factors and in anycase with no relation to the periods. of crop-fluctuations. ProfessorSPIETHOFF,' for his part, speaks of good harvests and innovationsas two amongst many possible initiating factors ofindustrialexpansion~ But none ofthese writers can be represented as puttingforward an "agricultural theory" of the trade-cycle. They donot ignore the agricultural factors; but they combine them withother factors in integrated but flexible schemes, in which allowanceis made for various processes of response-monetary, psychologicaland technical.There is a third view, held mainly by American economistssuch as Professors A. HANSEN & and J. M. CLA.RK~I which deniesthat fluctuations in agricultural output are among the· causes of thecyclical fluctuation of business. Agricultur~ these writers say,1 I Mus/rial Fluctuations.I A Study 01 Industrial Fluctt·,ation and Banking Policy and the P,iceLevel.I Article" Krisen" in "Handworterbuch der Staatswissenschaften.", "The,Business Cycle in its Relation to Agriculture II in Jouynal 01Farm Economics, .1932.• Strategic Factors in the B14siness Cycle.