8
ECONOMIC ESSAYS IN HONOR OF JOHN BATES CLARK
have found little in it that bears upon the laws of economic change
or that enables them to tell which factors move first and which
come after. Pure economic theory has largely abstracted from
the element of time and the sequence of events in time, while
it is precisely this sequence of events with which the business
forecaster is most immediately concerned. The business fore-
caster has thus been driven to the study of business history rather
than theory, and has tried to deduce a certain theory (or a mul-
tiplicity of theories) of his own from the study of history,
ignorant of or contemptuous of the static theory. He is
interested in “dynamics,” not in “statics.”
Moreover, the business forecaster is increasingly concerning
himself only with that part of business history which can be
measured in statistical terms. At the extreme he ignores not only
economic theory but also the rich body of historical facts which
cannot be quantitatively stated. His ideal seems to be to develop
mathematical laws which will tell him not merely which factors
change first, but also what percentage changes in other factors
will follow from a given magnitude of change in a particular
factor, and which ones will come three months later, which ones
four and a half months later, and which ones four and three-
fourths months later. | In extreme cases he does not know enough
of economic theory or of economic history to realize that such an
undertaking is foredoomed from the beginning, and that if laws
of this kind could be worked out for a given period in the past,
there is no guaranty at all that such laws would apply at any time
in the future! I hasten to add that the extreme case I have
just been describing is a caricature which does not justly describe
any living business forecaster. I claim the privilege which the
static theorist has always claimed of studying tendencies in
their pure form, even though concrete human nature always
involves complexities!
It must be apparent, however, that in ignoring the static con-
ceptions and the beautifully worked out static doctrines the
statistical business forecaster is throwing away a most valuable
aid. Static theory does describe underlying economic forces. If
it tells nothing about the rate at which they are moving, it does
at least indicate the directions in which they move, it indicates
their relative power, and it indicates their relations inter sese.
The student of change who knows the goal toward which his