CYCLES: The Science of Prediction

By Edward R. Dewey '27 and Edwin F. Dakin.Holt, 1947- pp. xi, 255. $3.00.

This ingenious and highly readable book sets the members of the dismal science to rights, but without relieving their gloom. It bases somber conclusions on trends and cycles which have been repeated so often in the past as to establish, presumably, a high probability that they will recur in the future. First, industries have displayed certain growth curves, with rates of growth, after an exuberant pe riod, tapering off to eventual decline. Today, although great improvements in the arts of production might bob up, most of our industries have reached "maturity..'' Second, there have run through our economy certain cycles or rhythmical ups and downs, the chief of which have measured, respectively, some 54 years, 9 years, and 31/2 years. All three are headed for their troughs around 1951. The conjuncture of these troughs with one another and with economic maturity indicates serious embarrassment ahead. The great depression which trailed the Napoleonic wars by about nine years, our Civil War by eight, and the First World War by eleven, seems likely to arrive more promptly this time. Apparently social control cannot be trusted to do much about it, inasmuch as the curves describing the misfortune have gone their dolorous ways despite all sorts of political and economic environments in the past. However, individual business firms might better adjust themselves to coming events by paying greater heed to the curves, to the refinement of which more of society's resources should be devoted.

The writers do not reach their conclusions dogmatically. They suggest. Accordingly it seems fair to suggest that they deal with probabilities somewhat misleadingly. The prediction of human behavior presents the peculiar difficulty that human beings frequently mock at the "law" of compensating errors by piling up their "deviations" on one side of a given trend, thus altering the trend itself. This is notably true of any phenomena subject to styles, fashions, fads, and fancies. Society is not an organism in the sense that an animal is an organism. Trends and cycles differ in the two cases. The business cycle is something which has occurred in an economy having characteristics which men can change as they cannot change, say, their physical growth. During the late war we imposed radical changes by such means as production priorities, price ceilings, and rationing, with the result of breaking up the rhythm in question. The very purpose of prediction is control, and control means changing that which has been predicted. Just in so far as the data of prediction are human beings with minds and wills, we must assume either that we cannot predict or else that we can control. Where every man may make any number of predic tions concerning what other men will predict, we have an indeterminate situation the outcome of which cannot be predicted. If, on the other hand, we assume prediction, we assume also the essential condition of control, that is, the capacity of free and intelligent men to reach agreements, including agreements to make constructive changes. The resignation suggested by this work might be subjected to statistical scrutiny by showing, for example, the correlation between the decline of some growth curves and the rise of others. Thus, by taking changes in the proportions between natural and synthetic products, between necessaries and conveniences, between conveniences and luxuries, between consumption goods and capital goods, and, above all, between work and leisure, we should probably reach much less lugubrious conclusions.