THE CROP CYCLE AND THE BUSINESS CYCLE 317

*A change in expectations . . . can be taken ... to define the beginning
of the down-turn.'1

These psychic disturbances that manifest themselves in the form of
economic fluctuations may originate either in the subconscious abyss
of the Psyche or on its conscious volitional surface, and from either of
these two alternative possible psychic sources they may communicate
themselves to the other psychic plane. For example,

'Deflation must not... be interpreted in the narrow sense of a deliberate
act or policy on the part of the monetary authorities or commercial banks.
.. . When the process has once got under way, a sort of automatic deflation
or self-deflation of the economic system (in contradistinction to a deflation
imposed on it by the monetary authorities) is just as much an effect as a
cause.'3

Conversely, the dealings between consumer and producer begin at the
consumer's end on the subconscious level but are raised to the conscious
level in the producer's response to the consumer's challenge. In the first
movement of this market dance

'the psychological categories important to the understanding of con-
sumers' demand are habit, imitation, and suggestion—not reflective
choice.'3

In the second movement

'production is guided by forecasts of -what consumers will buy, supple-
mented by judgments concerning profitable methods of providing both
consumers' goods and the endless variety of producers' goods which
modern technique requires.'4

A progressive increase in the relative influence of conscious ideas, aims,
plans, and decisions in the psychic causation of economic events seemed
to have been one of the characteristic concomitants of the industrializa-
tion of Western economic life.

'The most significant items [among various factors determining the
amplitude of industrial fluctuations] in a world of complex organisation
. . . are the monetary and banking arrangements of the country, the policy
of industrialists as regards spoiling the market, and the policy of work-
people as regards rigidity of wage-rates.'5

In a money economy in which private enterprise enjoys an ascendancy
over public enterprise, the individual's desire to make money is the most
obvious of the conscious and deliberate psychic driving forces behind
the production machine.6 'Profit making is the central process among the
congeries that constitute the activities of a business economy.'7 As Pigou
puts it, 'in the Modern World industry is closely enfolded in a garment of

1 Rostow, op. cit., p. 56. Ibid., p. 163, the same scholar draws attention to "the role
of expectations about the future, operating through the institutions of credit1, in Bage-
hot's theory of economic cycles.

2 Haberler, op. cit, p. 323. The meaning which the author intends to convey in the
last nine words here quoted seems to be 'is not only an effect but a cause'.

3 Mitchell, Business Cycles, the Problem and its Setting, p- 165- * Ibid., p. 164.
s Pigou, op. cit., p. 208. 6 See Mitchell, ibid,, pp. 65-66.
? Ibid., p. 183. Cp. Mitchell, Business Cycles and their Causes, p. 149.