profits, wliiie that of the consumer's goods varies somewhat as the maguitude of the entire demand ou which this margin of proQu rests as an incremeuL (The value of producer's goods ^ / (A), that of consumer's goods =/ (demand + A).) From the like line of argument it should foltotv that the initial break in time ot crisis must come in some line of business occupied with producer's goods. Cf. (juarterlg Journal o/£«»u)mfu, Uaj 1903, pp. 497-COO. See alao foot-note on p. ISIaboTB.
the various lines of industry serves, of itself, to maintain the prosperity lor the time being. If the original favorable disturbance of demand and prices, to which the prosperity owes its rise, falls off to the earlier level of demand, the era of proa perity has thereby a term set to its run ; although the date of its termination is always at some distance in the future, beyond the time when the original demand has ceased to act. The reason for this retardation, whereby the close of an era of prosperity is always delayed, other things equal, beyond the lapse of the cause from which it has /arisen, is (1) the habit of buoyancy, or speculative i recklessness, which grows up in any business community under such circumstances, (2) the eonI tinued life of a considerable body of contracts for I future performance, which acts to keep up the demand for such things as are required in order to fill these contracts and thereby keeps up prices in so far. In general it may be said that after the failure of the favorable price disturbance to which it is due, an era of prosperity wiU continue for that (indefinite) further period during which the fringe of outstanding contracts continues to dominate the business situation. Some further, new contracts will always continue to be made during this period, and some unfilled contracts will always be left standing over when the liquidation sets in ; but, broadly speaking, the wind-up
THE THEORY OF MODERN WELFARE 197