Fig. 8. Trends of Various U. S. Industries

      Diagrammatic representation of a growth curve on which there have been located with only approximate accuracy, various American industries, according to their present rate of growth. Ratio scale.

      When an industry is young and growing fast, it appears here at the left, where the curve is rising rapidly. As it gets older and more mature, it is located near the top of the curve, or even beyond. (Chart after an idea by Roger Babson.)

      A knowledge of prevailing trends provides us with the first key required for answering such questions — questions that may be applied alike to a whole economy or to an individual corporation. When we know what the cycle is, we are then in a position to isolate its effect from that of the trend, and study trends as separate entities. Studies of the trend without prior study of the cycle must therefore be purely tentative.

      We shall quickly discover that the so-called business or economic cycle is in reality a composite of many different cycles. We shall be particularly interested in studying them for evidences of rhythm. For if and when we find rhythm we can, to the extent justifiable, predict recurrence; and we shall have predictability on the basis of much more than finite logic and guess.

      It has long been assumed that if we could only isolate the causes of economic cycles we could then effectually prevent them, and so eliminate the downsweeps that plague highly organized societies.

      Many volumes have been written to discuss the causes. Here we shall be far less concerned with the cause than with the timing. Like the weatherman, we are concerned initially not with altering the weather, but with the problem of predicting it with fair accuracy, so that those due to be out in it can be properly prepared.