He blamed it on the flagging of “animal spirits.” To this day, nobody knows exactly what these animal spirits are or why they might suddenly flag, but that of course has only meant that an entire cottage industry of state‐funded economists have made a career out of attempting to explain them or finding real‐world data that can correlate to them. This research has been very good for academic careers, but is of no value to anyone actually trying to understand business cycles. Put bluntly, pop psychology is no substitute for capital theory.3
