i productive goods has since then persistently outstripped such readjustment of capitalization as has from time to time been made. The persistent decline of profits, due to this relative overproduction of industrial apparatus, has not permitted a consistent speculative expansion, of the kind which abounds in the earlier half of the nineteenth century, to get under way. When a speculative movement has been set up by extraneous stimuli, during this late period, the inherent and relatively rapid decline of eaming-capacity on the part of older investments has brought the speculative inflation to book before it has reached such dimensions as would bring on a violent crisis. And when a crisis of some appreciable severity has come and has lowered the capitalization, the persistent efficiency and facile balance of processes in the modem machine industry has overtaken the decline in capitalization without allowing time for
1 a. Sombait, ifapOalumu*, toL I. oh. XVQL-XX.
THE THEORY OF MODERN WELFARE 256
recovery and consequent boom. The cheapening