Chapter 2 of 21 · Crises and Cycles by Wilhelm Röpke
CONTENTS.
The Phenomena of Economic Fluctuations.
Three main types of undulation,—Seasonal fluctuations and anticipatory cycles,—Secular trend,—Long waves,—The Juglar Cycle,
§ 2. The Nature of the Trade Cycle
The trade cycle as a “total” phenomenon,—Its cyclical character,—The average duration of the cycle,—It affects mainly the industrial-commercial section,—Agrarian crises,
§ 3. The Typical Course of the Trade Cycle
(1) The upward swing of the cycle—(2) The crisis or the acute reaction,—(3) The depression,
Cyclical and “exogenous” crises,—Definition,—Types of crises,—The credit crisis,
The History of Cycles and Crises.
§ 5. Economic Crises during the Early Period of Capitalism
§ 6. Cycles and Crises in the Nineteenth Century
The cycle period up to the crisis of 1825,—The cycle period from 1826 till the crisis of 1836,—The cycle period from 1837 till the crisis of 1847,—The cycle period from 1848-1857,—The cycle period from 1858 till the crisis of 1866,—The cycle period from 1867 till the crisis of 1873,—The cycle period up till the end of the century,
§ 7. Economic Development up till the Outbreak of the World Crisis of 1929
The character of the new period,—The period from 1895 till the turn in 1900,—The period up till the turn in 1907,—The cycle period from 1908 to the outbreak of the World War,—The World War,—The “Paradox of Capitalism,”—Economic Development after the war,—The world economic crisis of 1920,—The “gay ’twenties,”
§ 8. The World Economic Crisis since 1929
The crash on the New York Stock Exchange,—The fall in the prices of raw materials,—The decline in the general price level,—The shrinkage of production,—The decline of world trade,—Unemployment,—Money and capital markets,—International financial troubles and the crises of the balance of payments,—Where we stand at the present moment,
The Causes of Crises and Cycles.
Agreements and disagreements among economists,—Classification of theories,—Methodological questions,
§ 10. The General Sources of Disturbance
Unstable equilibrium of a highly differentiated social system,—Connexion with the growth of population,.—The roundabout character of production,—Comparison with a socialist state,—Money and credit,—Freedom in the application of money income,—Outside disturbances,
Popularity of the over-production theory,—The meaning of “over-production,”—Crude views rejected,—Over-population,—The “fear to produce,”—Disproportionality,—Restoration of equilibrium creates purchasing power,—Purely symptomatic nature of certain remedies,—Rationalization,
Types of under-consumption theories,—The purchasing-power theory of wages and national welfare,—The under-consumption theory of the Neo-Marxists (theory of Economic Imperialism),—The Distributional Under-consumption Theory,—Monetary Under-consumption Theories,—The “dilemma of thrift,”
Alternation of optimism and pessimism,—The working of the psychological factor,—Unsatisfactory nature of purely psychological explanations,
The essence of the cycle is to be found in a rhythmical expansion and contraction of investment,—Importance of technical progress,—The “shortage of capital theory,”—Over-investment,—The principle of acceleration,—Origin of overinvestment,—Monetary and authoritarian “forced saving,”—The theories of Keynes and von Hayek,
§ 15. Money and Credit and the Cycle
The monetary theory of the trade cycle,—The special case of the recent American boom,—“Credit creation,”—The rate of interest and the profit rate,—The breakdown of credit expansion,—Inflationary and compensatory credit expansion,—Qualitative distribution of the money stream as an additional factor of instability,
§ 16. The Secondary Depression
Necessity of a special theory of the depression,—Primary and secondary depression,—The structure of the secondary depression,—The “price-level complex,”—Credit contraction,—Disharmony between formation of incomes and utilization of incomes,—Rate of saving greater than the rate of investment,—Securities markets,—“Deposits disease,”—The end of the secondary depression,—The automatic safety brake,—The borderline between the primary and the secondary depression,—The prospects of economy “entropy” by an excess of savings,—The development of the theory of the secondary depression,
The three tasks of the trade-cycle theory,—The monetary overcapitalization theory,—Theory of the depression,—The present world economic depression,
§ 18. The Effects of Crises and Cycles
The fundamental dilemma,—The positive function of the cyclical movement,—The negative effects,—Effects on national budgets,—The example of Germany,—State intervention as a result of depression,—Conclusion,
§ 19. The Bases of Trade-Cycle Policy
The aims of trade-cycle policy,—The elimination of the cycle as a whole,—Measures for overcoming the depression,—Symptomatic measures,—References,
1. Measures for Controlling the Cyclical Movement as a Whole.
The aims of credit control,—Price-level stabilization,—The concept of neutral money,—The technique of credit control,—Discount policy,—Credit restriction,—Open market operations,—Varying deposit reserve requirements,
§ 21. Compensatory Budget Policy and Other Measures
Quantitative and qualitative Compensatory Budget Policy,—Objections,—How to hold reserve funds,—Germany as a deterrent example,—Direct interferences with the structure of production, costs and prices,—The influence of monopoly organizations,—Protectionism,—Corporativism,—Planned Economy,
§ 22. Trade-Cycle Policy and the Gold Standard
The Doctrine of Alternative Stability,—How far the alternative does not exist,—The example of the United States in 1933,—The real alternative,—Refinements and modifications,—Summary,
The technique and criterion of trade-cycle policy,—Some practical difficulties of a rational trade-cycle policy,—Its danger,—What is more important than trade-cycle policy,
2. Measures for Overcoming the Depression.
§ 24. Interference with the Structure of Prices and of Production (Restriction)
The different schools of thought,—The restrictionist school,—The expansionist school,—The defects of the restrictionist school,—The alleged necessity of “more saving,”—The lowering of the level of wages,—Considerations of external equilibrium,
§ 25. Expansion: Its Nature and Significance
Relative merits of restrictionist and expansionist measures,—Compatibility of expansion and readjustment,—Expansion not identical with reflation,—The problem of general over-indebtedness,—Expansion not identical with devaluation,—Expansion not identical with planning,—Conformable and non-conformable interventions,—Governmental control of new investments,
§ 26. The Technique of Expansion: Some Recent Experiences
“Provocative Therapy,”—Public initiative in enlarging the volume of credit and demand,—Deliberately creating a budget deficit,—A German experiment in 1932,—Public works,—How to raise the funds for public works,—The conditions of success,—The American experience,—The German experience after 1933,—The case of France,
3. Symptomatic Measures (Palliatives).
Different kinds of relief,—Unemployment relief and the wage level,—Limitations of unemployment insurance,
1. Proportional sharing out of the amount of employment available,—(a) The shortening of working hours,—(b) The suppression of “double earning,”—2. Productive relief works,—3. Compulsory labour service,—4. Land settlement,—5. Labour nationalism,
Crises and Cycles
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