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POLITICAL  ECONOMY

steel  sags  down  and  the  slackness  is  passed  on
from  the  producers  of  iron  and  steel  goods
to  the  producers  of  the  things  out  of  which
they  are  made.  Again,  when  the  engineers’
business  is  slack,  earnings  in  it  are  reduced,
with  the  result  that  the  people  engaged  in  it
make  fewer  purchases  than  they  did  previously.
Hence  the  depression  tends  to  be  passed  on
to  the  industries  which  supply  their  needs.  It
must  be  added,  moreover,  that  sluggishness  in
a  trade  is  apt  to  generate  inertness  and  an
oppressed  state  of  mind  in  those  who  are  conducting ­
  it,  and  that  this  psychological  mood
is  probably  communicated  to  other  business
men  through  the  intangible  avenues  which
social  psychology  recognises  ;  and  when
employers  are  in  a  state  of  depression  they  are
prone  to  shun  risks,  take  a  gloomy  view  of  the
future  and  curtail  their  undertakings.  It  is
comprehensible,  therefore,  that  the  bad  trade,
wherever  it  starts,  tends  to  spread  ;  and  it
may  be,  moreover,  that  there  is  some  common
cause  of  industrial  collapse  which  bears  directly
on  many  trades  at  the  same  time.
Another  and  even  more  striking  feature  of
trade  fluctuations  is  their  periodicity.  They
recur  with  a  certain  degree  of  regularity.
Trade  depressions  are  not  perfectly  periodic,
but  they  are  not  dispersed  in  an  altogether