Thorstein Veblen
Review author to: 'Bevölkerungsbewegung, Kapitalbildung und 
periodische Wirtschaftskrisen'. By LUDWIG POHLE. 
Göttingen: Vandenhoeck & Ruprecht, 1902. 8vo, pp. 92.
The Journal of Political Economy, Vol. 11, No. 4. (Sept., 1903), 
p. 656-657.
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The objective point of this pamphlet is a theory of crises, or 
more precisely of depression, with a particular view to the 
bearing of depression on the fortunes of the working classes. 
Dr. Pohle does not consistently distinguish between crisis and 
depression, and for the most part "crisis" in his usuage means 
depression. As the wording of the title indicates, the causes 
of depression are sought in the movement of population and in 
the accumulation of capital. The movement of population here 
means, practically, the natural increase of the working 
classes. This is the ultimate efficient factor to which 
depression is traceable. But it is through its relation to the 
accumulation of capital that this factor brings on the 
depression.

The cause of the change from exaltation to depression I find 
in this, that the savings of the nation are no longer adequate 
to pay for the newly produced capital goods .... It is, in 
short, the excessive demand for capital for use in industry 
which first brings this period of exaltation to a pause and 
finally changes it to a period of depression (p. 79, note 32).

The periodicity of crises and depressions is traceable to 
psychological grounds, to the cumulative change of animus in 
the undertaking class; that is to say, these phenomena are 
essentially of a speculative nature. But the ulterior causes 
of this disturbance are of a material kind. The growth of 
the working-class population diverts the values produced from 
accumulation in the way of capitalizable savings to current 
consumption, resulting in a discrepancy between the 
accumulated funds and the productive goods on hand. The 
accumulated funds not being adequate to pay for the 
industrial equipment necessary to afford the requisite 
current output, capitalization comes to a standstill, there 
is an appearance of overproduction of productive goods, with 
a consequent decline in their value; the industrial equipment 
in hand is therefore insufficient to give remunerative 
employment to the [657] workman, at the same time that a 
slack demand for productive goods discourages their further 
production. This unemployment is the substantial fact of a 
period of depression.
The theory furnishes its own refutation. For all that appears 
in Dr. Pohle's discussion, the funded value of the productive 
goods in question should be competent, through the 
introduction of credit relations, to pay for, and therefore 
to capitalize, these goods in the form of Increased industrial 
equipment. With the increased industrial equipment the 
working class should have no difficulty in finding 
remunerative employment: nor should the consumptive goods 
required by an increased working class be wanting, since 
the increased industrial equipment with an increased labor 
force should readily increase the output; nor should the 
workman want for the means with which to pay for what they 
need, since the heightened efficiency of industry and the 
livelier demand for labor resulting from it should give 
them good wages and steady work. In short, the factors to 
which Dr. Pohle traces depression should, on his own 
interpretation of the facts, result in brisk times.
V.