THE RELATION BETWEEN STATICS AND DYNAMICS 53 
of limitation of output) in terms of the ever-present fact of 
unemployment rather than in terms of the theoretical tendency 
of supply and demand to become equal. 
Or, if we search for the causes of discrepancies of utility and 
disutility from their static standards, we are not merely led into 
the whole question of human nature, but into the processes by 
which, and the conditions under which, decisions are made: into 
the nature and adequacy of available alternatives and their rela- 
tion to the reality of competition, into the elements of compul- 
sion in “free” exchange, into the changing character of the human 
costs of industry, as affecting body, nerves, morale and social 
relations, into advertising and the whole system of economic guid- 
ance, into standardized contracts and the force of law and custom 
in determining the incidental terms of contracts; the whole cul- 
minating in a picture of the biased and imperfect character of 
the market as a means for the expression, furthering and protec- 
tion of different kinds of interests, and the need of other forms of 
protection than those afforded by “free” contract. 
From another angle, if we study “dynamic friction” we are led 
into the whole question of the processes of bargaining and nego- 
tiation, with their weapons of maneuvring and obstruction, of 
information and concealment, of offering and withholding, and of 
the effect of it all on the underlying processes of production— 
something which can probably never be reduced to measurement. 
This opens up the area explored, for instance, by Veblen in his 
Theory of Business Enterprise. In short, we are led into all 
the aspects of economic life and its essential conditioning human 
facts and institutions; and if not into evaluative judgments, at 
least into those facts and relationships on which such judgments 
must, if they are intelligent, be based. 
4. Dynamics of Human Nature 
The static view of man is embodied in the marginal utility 
theory. This is an advance on the classical view in two respects. 
(1) Instead of focusing on self-interest and the reproductive 
instinct, it allows for all the motives of man, while remaining 
simple enough for deductive treatment. (2) It is an answer to 
the classical conclusion that price could not be a measure of 
utility, because coal, for example, has more utility than diamonds, 
but less value. As a rebuttal of this blank negative, establishing