The Role of Time in Economic Theory

i. THE r6le of time in economic theory is a subject which in recent years it has become more and more fashionable to discuss. In the last quarter of a century more has been written about Time and its Mephistophelian2 influence on the pure simplicity of static analysis, than in the whole century and a half of economic speculation which preceded it. This is not to say that many of the problems discussed under this heading had not been realised before-in fact, many were known and were discussed under other headings. But it is clear that so far the Time factor has not been sufficiently analysed, and it is generally agreed that such analysis constitutes one of the main tasks of economics in the future. But the term Time is not unambiguous in its significance; discussion of the time element in economics covers problems of a very varying nature.8 There is, indeed, grave danger that the term Time may lose all precise signification and suffer the same fate as has been suffered by the term Organic in the hands of German and Italian metaphysicians or the terms Static and Dynamic in recent methodological discussionterms of such ambiguity that their use is often positively misleading. There are clearly three different sets of problems relating to the time element. There is first the problem concerning the determination of the length of time which economic activity has in view-the problem of the economic period; there is, secondly, the problem concerning the disposition of