ECONOMIC ORGANIZATION AND BUSINESS CYCLES.
That business cycles occur only in communities having a distinctively modern type of economic organization is explicitly recognized by several of the writers cited in Chapter I, and is implied by all who trace these cycles to institutional factors of recent development. Even the theories which resort to physical causes need not be taken as dissenting opinions. Whatever cycles occur in the weather produce cycles in economic activities only where economic activities are organized upon a business basis.
This dependence of business cycles upon a particular scheme of institutions must be a fact of the highest theoretical significance. But what we can learn from it will depend upon our understanding of the institutional scheme in question. Modern economic organization is so bewildering a complex that it explains nothing. Before we can make the historical connection illuminate our problem, we must find some way of breaking the complex into comprehensible elements, related to each other in a comprehensible fashion. Is there not, then, some feature of the economic organization found in all communities subject to business cycles, which will help us to plan our inquiry into the various processes marked for investigation in the first chapter?
Two suggestions are provided by Chapter I. Many economists have held that crises and depressions are a result of "capitalism," or, as others phrase it, "a disease of capitalism." A few recent writers have preferred to say that business cycles are produced by "money economy."1 Neither of these statements professes to be a theory of business cycles. But both statements suggest working programs____________________