Since the publication of the third edition of this book, the problem of alternating periods of growth and depression has been the subject of numerous publications. Efforts have been made to observe, explain, prevent and cure. Statistical, theoretical and therapeutic work on this topic has covered considerable ground. Yet the sheer scale of this work entails an inevitable imperfection.

But the facts themselves place the problem of crises at the forefront of our concerns. In 1929, a period of very brilliant growth gave way, in the United States, to a depression of rare intensity. The world has suffered this contagion ever since, in 1930 and 1931.

In the field of observation of the general flow of business, economic cycles and the economic conjuncture, we note that everywhere specialized services for statistical research have been created: the Harvard Economic Service, the Institut für Konjunkturforschung in Berlin and Vienna, the London Economic Service and others. Following the example set by France already in 1908, other countries have now surpassed its efforts. The economist and the businessman now enjoy an impressive number of indexes and graphs to adapt, superimpose and compare. We are almost tempted here to speak of overproduction!

For even though new statistical methods have provided us with valuable additional information, we have sometimes abused these figures. Their misuse has been particularly careless. The spirit of geometry has tried to eliminate the need for finesse; here too, reasoning has tried to ignore intuition and the imponderables that influence economic phenomena, as they do man himself. Political economy would be more successful if we appealed to the methods of biology, rather than to the still very precarious procedures of meteorology. The failure of the so-called barometer method is no longer contested today. Facts have shattered the barometers. The use of statistics should not be mechanical.

In the realm of theory, the same reservations apply. The monetary implications of crises have inspired numerous important works. Quantities of money and credit are meant to constitute the driving force of the economic world. For variations in the quantity of money provokes corresponding movements in profits. We certainly do not deny that profit is the engine of the modern economic world, acting in its variations as both an accelerator and a brake. But we doubt that quantities of money, through their influence on prices, are sufficient to explain variations in profit.