Commitment and Surprise

The great Alfred Marshall wrote in 1890:

Time ... is the centre of the chief difficulty of almost every economic problem. -- Principles of Economics, "Preface" (First Edition).
What he meant is that static analysis in economics was by then considered a nearly solved problem (just as the Michaelson-Morley experiment conducted ten years before was not at that time understood to herald a revolution in physics, but was thought to be a minor riddle to be solved).
- The relationship of consumer purchases to market price was well-understood through marginal analysis of utility optimization developed by Jevons, Menger, and Walras.
- Similar analysis of profit maximization served for a theory of the firm (competitive and monopolistic).
- Walras' theory of general equilibrium would explain the whole economy.
But dynamic behavior (saving and investment, contracts) was still poorly understood.