This is a single-author methodological essay in economic semantics. Machlup’s object is not to define “statics” and “dynamics” once and for all, but to show that their prestige in economics has rested on unstable, often polemical meanings. The essay’s thesis is that these terms have become “kaleidoscopic”: they do real classificatory work only after a writer declares which of many incompatible senses is intended.
Machlup begins from the etymological temptation—statics as causing to stand, dynamics as causing to move—only to dissolve it. Economic reasoning necessarily fixes some elements and varies others, so neither term can be made foundational by appeal to motion or rest.
The fact is that economists in their reasoning must always cause some variables to "stand" and some variables to "move"—which leaves us nowhere in deciding this argument.
The first major section assembles a historical roster of definitions, from Comte, Mill, Walras, Marshall, Clark, Veblen, Wicksell, Pareto, Schumpeter, Frisch, Hicks, Samuelson, and others. Machlup’s method is deliberately documentary: the profusion of meanings is itself the evidence. Statics may mean stationary-state theory, equilibrium analysis, abstraction, timeless simultaneity, or ceteris paribus reasoning; dynamics may mean growth, historical evolution, disequilibrium adjustment, period analysis, lagged variables, endogenous change, expectations, or formal time-dating. His irony is directed less against any one definition than against “terminological originality” that reuses old words for new concepts.
The second section turns from explicit definitions to “putative” statics and dynamics: labels imposed retrospectively or polemically. Classical economics can be called dynamic because it theorizes long-run development, yet static because it abstracts and isolates. Marxian theory qualifies as dynamic under many criteria—historical evolution, cumulative sequence, institutional change, endogenous development—even though Marx did not use the term. Keynes is treated as a revealing case of intended dynamics but achieved statics, while Robertson becomes “dynamic” through period analysis without advertising the label. Machlup condenses the sociology of the terminology in a memorable diagnosis:
Typically, "Statics" was what those benighted opponents have been writing; "Dynamics" was one's own, vastly superior theory.
The third section provides the essay’s constructive core: a typology rather than a definition. Machlup classifies uses according to extreme positions, basic approach and subject matter, assumptions about invariance and interdependence, uses of equilibrium, assumptions about individual behavior and social facts, and formal properties of variables. This typology shows that many supposed oppositions overlap. A growth theory may also be an equilibrium theory; a model of endogenous change may use comparative or sequential equilibrium devices; “dynamic” theories often combine several criteria at once.
One of Machlup’s central conceptual moves is to reject the idea that models are tied only to the situations they depict. Static constructions may illuminate change precisely by contrast, and dynamic accounts may require equilibrium concepts.
It just is not so that a certain model is useful only to the interpretation of situations which it depicts or schematizes.
This point also undercuts the common identification of equilibrium with statics and evolution with dynamics. For Machlup, equilibrium is not the property of one side of the distinction; it is a tool that may function inside many kinds of analysis.
Undoubtedly, if "dynamics" were defined by the non-use of the equilibrium concept it would become a rather empty category; at least, many types of economic analysis, now safely regarded as "dynamic," would no longer so qualify.
The final section surveys complaints about confusion and reaches the essay’s practical conclusion. Machlup does not say the distinction is meaningless. Its problem is more damaging: it has too many meanings, and therefore wastes intellectual effort unless carefully specified.
The trouble, as I see it, is not that the division of economic analysis into Statics and Dynamics makes no sense, but that it makes too many senses.
The essay remains relevant as a warning about methodological vocabulary that acquires honorific and pejorative force. “Dynamic” becomes a badge of realism or modernity; “static” becomes a term of dismissal. Machlup’s remedy is semantic discipline: state the intended meaning, or replace the grand term with a more precise phrase such as growth theory, stationary-state theory, sequence analysis, period analysis, or time-series analysis.
Probably more often than not we should be able to do without the terms Statics and Dynamics.
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