Crisis
In the context of economics, a crisis is a serious interruption in the operation of the economy in a society. For much of history, the most common causes of such crises were general crop failures, wars and disease. The birth of industrial capitalism gave rise to new types of economic crisis in addition to the old ones, the most chief of which being the crisis of overproduction.
Under capitalism, crisis happens regularly as a result of its inherent mechanisms such as the profit motive and lack of planned production. Capitalist crisis intensifies class struggle and the tendency towards monopoly as the weaker firms are acquired by larger ones.
“Crises of every kind—economic crises most frequently, but not only these—in their turn increase very considerably the tendency towards concentration and towards monopoly.” —Vladimir Lenin, Imperialism, the Highest Stage of Capitalism
Types
Crisis of overproduction
Most capitalist crises are crises of overproduction. These are recurring crises within the capitalist mode of production (and exclusive to it) caused by both the overproduction of consumer commodities, as well as by the overproduction of productive capital itself (i.e., the producer commodities, or means of production) used to produce the excess consumer commodities. Overproduction is inherent in capitalist production and consequently so are overproduction crises. Overproduction is inherent in capitalism because the capitalists do not, and cannot, pay their workers enough to buy back all the commodities that they produce.[1]
See also
References
- ↑ Political Economy, Part II : CAPITALIST MODE OF PRODUCTION, A. PRE-MONOPOLY CAPITALISM, CHAPTER XVII : ECONOMIC CRISES. Economics Institute of the Academy of Sciences of the U.S.S.R.