The Bingham County news. [volume] (Blackfoot, Idaho) 1918-1930, 1923-01-19
ISSUED Monthly by the Department of
Economics, University of Idaho)
The Selling Cycle

The last two years have seen 8
growing interest in the business cyc-
lie. People who thought prosperity
had come to stay woke up to the fact
that the economic world do move
up and down.
Out of this interest has come a
number of speculations as to the
causes of this cycle or wave move
ment. One of the most loudly assert
ed explanations is based on the as
sumption that prosperity follows crop
production, that, in last analysis, the
determining factor in the business cy-
Gle is the crop yield per acre. One
enthusiast has even carried this theo-
ry further by trying to show a core
lation between crop production and
sun-spots, thus putting business on an
astronomical basis. The fundamental
difficulty with this theory lies in it's
primary assumptions. They are false.
Volume Of agricultural products has
been shown statistically not to letter
mine prosperity.
A second school would have it that
the cycle of business is explainable on
natural grounds. Since the seasons
come and go, since man flourishes to-
day and in a little while passes to mis-
dissolution since life springs up.
flourishes and dies, so business does
the same thing. This theory is some
times called the natural theory. The
trouble with 1t lies in the fact that 1t
explain nothing, 1t points to a
striking analogy and nothing more.
A third explanation, which has wide
acceptance today, is the psychological
theory. This proceeds on the assump-
tion that man Is a murcurial creature
either way up or way down in spirits.
When things are going WELL he tends
to overreach himself he becomes too
Optimistic. he takes on all the disag-
raeeshla characteristics of the irres-
ponsible booster. The moment clouds
begin to gather, being at heart tim
id creature he flees to cover, he be-
comes panicky, he frantically forces
his debtors to liquidate, and we pass
from day to night. There is much to
this theory.
A year or two ago when we were
broke and could not pay the freight
bill on the carload of hay we had
shipped to Kansas City. we were told
that after all the depression was
largely psychological" The perpe-
traitor of that wheeze we knew was a
liar. Today however, there are indi-
ca tiOns that we are manifesting til
nudity not altogether warranted by
the facts For instance. retail ner
chants with depleted stocks, are hes
itating to buy even at present prices.
They remember what happened a
var and half gro. The chances are,
however, their fears are not alto
Cather well grounded. AS a matter of
fa"4 retail business is picking up.
little oD+iInism right now would be
helnf.'l md not unjustified.
Whatever be the explanation of the
causes of the cycle, the psychological
is better than the aver
age. There is no doubt of its reality
and of the extreme desirability of
plotting and charting its course. For
those who are concerned with the
buying and selling OF commodities,
we offer the following as our inter-
probation of the principles OF the cy-
Gle applied to the selling game.
OverprOductiOn
Market for luxuries
Higher farm prices curtain Injuries.
Better Retail Sales
Decline in Manufacture
active. Low farm prices
Firher Raw materials low building
decrease in Manufacture