Causes of economic crises. History of economic crises

Modern society tries with all its might to improve the level and conditions of its life. This can be achieved with the help of stable economic growth, not only at the expense of one state, but also each of the world's countries. History shows that each of the periods of prosperity ends in temporary economic instability.

Overflowing economic conditions

Many world minds note two states in which the economy of each country flows from time to time.

• Equilibrium. It is characterized by a balance of social production and public consumption. On the market, these two concepts are known as supply and demand. The process of economic growth is characterized by a visual movement in a straight line. In simple words, it can be said that output increases in volume in proportion to the increase in production factors.

• Non-equilibrium. This is a kind of crisis of overproduction on a social scale. Normal connections are violated, therefore, like the proportions in the economy.

What is the economic crisis?

The economic crisis can be called a complete imbalance in the economic sector, for which losses and disruptions of harmonious relations are typical, both in production and in market relations. In Greek, the term "krisis" is interpreted as a turning point. It indicates a fundamental deterioration in the economic state of the state, which is characterized by a decline in production and the severance of production ties, bankruptcy of a large number of enterprises and rising unemployment. The fall of the economy leads to a decline in living standards and a deterioration in the well-being of the entire population. The crisis is associated with global disruptions in development. One of the formats of the phenomenon is a systematic and massive accumulation of arrears and the inability of people to pay them off in the optimal time. The main causes of economic crises most economists associate with the imbalance in the pair of demand-supply for goods and services.

Surface causes of economic crises

A global prerequisite for the emergence of a global crisis can be called the contradiction between work of a non-productive type and production itself, or between production and consumption, between the system and the world around. With the imbalance of production and non-productive forces, commodity-money relations are disrupted. With the interaction of the system and the external environment, in the event of cataclysms that can not be controlled, there is a malfunction in the system of the functioning of society. The reasons for economic crises experts associate with the deepening and development of cooperation, specialization, which exacerbates the disagreement between management and production. Even a slow transition from commodity production to cooperation and manufactory is already pushing the manifestation of local crises. In most situations, local crises are resolved by internal reserves of a system with an independent regulatory structure.

Prerequisites and signs of crises

The reasons that lead to economic crises have a big impact on the formation of demand for currency, imprint on the indices, which are actively used for analysis of trades. From time to time, the global economy faces imbalances. The phenomenon takes place every 8-12 years. This manifests itself in a wide range of problems:

• Difficulties with the sale of goods;

• Acute disruptions in economic equilibrium;

• Reduction of production volumes;

• Rising unemployment;

• Decrease in investor activities;

• Dislocation of the sphere of crediting.

All the problems described in the complex in history were called the crisis of overproduction.

Money plays a big role in the formation of an unfavorable situation in the country, but only if they are viewed as a means of communication and an instrument for making payments. It can be seen from history that the imbalance of the economy in countries around the world began to appear only after the monetary and commodity form of the economy was introduced in conjunction with capitalism. It is the contradictions of this state system that made the downturns in the life of countries simply necessary. The deep premise of the phenomenon is the conflict between social production and the private capitalist form of property. The conditions of production and the conditions for the sale of goods differ substantially from surplus value. The output of large volumes of production is hampered by the productive power of the public, and the realization of the released product is proportional to the spheres of the society's activity, which is determined not by the need of people, but by their solvency. The main contradiction lies in the fact that world production began to produce so many goods that the world society simply can not consume them all.

The role of capitalism in shaping the crisis

Many causes of economic crises are directly related to capitalism, since its basic nature is based on an unlimited expansion of production. Aiming at systematic enrichment is stimulated by the constant release of ever new products. There is a modernization of technology and the introduction of new technologies in all industries. Such active measures for the prosperity of industry are simply necessary for companies and large enterprises in order to withstand a sufficiently high level of competition. The need to reduce production costs in an active struggle with competitors makes most entrepreneurs strictly restrict the growth of wages. This leads to the fact that a sharp increase in production far exceeds the expansion of personal consumption. In order to smooth out the conflict between production and consumers in order to solve the main issues of the economy, to ensure the labor market with a workforce of optimal quality, states are going to global social expenditures. The current crisis can be called a planned consequence of credit expansion.

Types of crises

World crises can be called a temporary period of aggravation of the confrontation between the economy of the state and private entrepreneurs. It is on the companies that the most acute problems in the operation of the system are reflected. Among them is the following:

• The collapse of the financial system;

• Overproduction and underproduction;

• Crisis in the sale of goods and services;

• Crisis in the relationship of counterparties in the market.

All this reduces the solvency of the population, hence, entails the bankruptcy of many successful companies. The crisis at the level of macroeconomics is characterized by a sharp decline in GDP and a decline in business activity. Inflation is growing exponentially, unemployment is increasing, and the standard of living of the population is significantly reduced. The economic problems connected with the crisis of the financial subsystem are fraught with sad consequences. This is a gap between the requirements for a new economic standard of living and the conservatism of most financial structures. Economic crises, the causes and consequences of which have been classified for many years, can arise from small social and economic problems. The reason for this is the existence of close relationships between the elements of the system and the processes of the subsystems. Local difficulties quite quickly cover the whole system, and it is impossible to eliminate some difficulties in the occurrence of the prerequisites of a crisis for the whole system. The causes of the world economic crises can be very diverse, but the phenomenon has a cyclic nature. If you visualize the development of the economy, the movement will be spiraling.

Main phases of crises

The history of economic crises (together with long-term researchers and major scientists) made it possible to single out the development of each economic crisis in four main stages:

• The veiled stage. This is the period of the origin of problems. The true causes of the economic crisis are already taking place, but they are not yet very pronounced. The period is marked by a bright development of production and prosperity of the country, which reached its peak.

• Accumulation of contradictions. During this period, the indicators of social dynamics are falling. Crisis processes begin to appear, which were not noticeable at the first stage.

• Temporary stage of stabilization. This is a temporary lull in the very beginning, from which all the major economic crises begin. Causes and consequences can be appalling. Society is on the brink of survival. The society is stratified according to the activity of citizens of states. Two groups of people are clearly visible. Some quietly overstay difficulties in the hope that soon everything will end, others - are actively working to improve their standard of living, are looking for a way out of the situation.

• Recovery. Despite the fact that the world economy is in decline, people have already adapted. This becomes a precondition for the stabilization of most of the local subsystems. At this stage, the main exit programs for their situation have already been developed and are ready for implementation. Optimistic moods in the society are intensifying. Social dynamics is improving.

The influence of the United States on the formation of world crises

The history of economic crises has shown that negative moods in the society can arise as a result of problems that have arisen in the US. It is obvious that all economies of the world are interconnected and the key link is exactly America. The weight of the country's GDP in the economy of the planet is more than 50%. The state accounts for about 25% of oil consumption. The export of most of the world's states is focused on the United States of America.

At the heart of the American economy lies the most complicated financial system, which, unfortunately, forms the causes of the world economic crises. By the way, recently the financial system of the state began to function more independently. At the same time, the main assets are not extracted from industrial production enterprises, but are earned through frauds with currency. Consequently, a kind of "soap bubble" was formed, the size of which is many times greater than the volume produced by the industrial sector. There are experts who believe that the causes of economic crises are not related to the mortgage collapse in America. The phenomenon only became an impetus, which led to changes in the development of the economy.

Lending - a step towards the crisis

In accordance with the laws of a market economy, demand generates supply. At the same time, as a result of systematic overproduction of goods, it was possible to find out that the supply can generate demand, which will be actively supported by credit funds. When banks actively continue to lend to citizens, systematically lowering their interest rates and offering favorable conditions for cooperation, the funds fall into the hands of insolvent people. Mass unpaid payments lead to the fact that the collateral, in particular real estate, starts to be sold. Unfortunately, the increase in supply and the reduction in demand do not allow the bank to return its assets. The construction sector is hit by a blow, and the lack of liquidity becomes the root cause of the crisis in the very real sector of the economy.

Despite the objectivity of lending, as a prerequisite for the formation of a crisis, the causes of the phenomenon are highly contradictory. The effect on the systematic occurrence of identical factors in different time intervals occurs in different ways. Moreover, each country has its own individual characteristics of development. Most experts associate the cyclical nature of the phenomenon with the scientific and technological development of states. The active part of material capital is aging for 10-12 years. This leads to the need for its renewal, which is a secondary signal to the revival of economic activity. The role of a push in the development of the state can be played by the introduction of new equipment into production and the emergence of new technologies, which is directly related to lending. This is the basis of the entire economic cycle. As time progressed, the aging of capital began to shrink. In the 19th century, the period declined to 10-11 years, a little later to 7-8 years. In the postwar period, the manifestation of crises of different scale began to be noticed every 4-5 years.

A little bit about crises in world countries

Almost every developing country faced crises. They are an integral part of progress. Stability and imbalance in the economy are simply inseparable. Before capitalism, problems arose from underproduction, today complexities are associated with overproduction. With the first economic crisis had to face the inhabitants of England in the distant 1825. It was during this period that capitalism began to dominate the country. Next faced the problems of Britain and America in 1836. Already in 1847, the crisis affected virtually all countries in Europe. From the very beginning of the capitalist dawn, the first deepest decline in the world is attributed to 1857. Great difficulties in the economy of the whole world could be observed from 1900 to 1903, as well as in 1907 and 1920. All this was just a preparation for the most difficult period in the history of the world. The standard causes of the economic crisis of 1929-1933 led to a decline in all sectors of the world economy. Only in the US, no less than 109,000 companies went bankrupt. Depression after the recession was protracted. This is not all over. After 4 years of cataclysms, after a short period of rehabilitation, a new decline occurred, successfully skipping the recovery stage. At that time, world industrial production declined by more than 11%. In the US, this figure reached 21%. The number of cars produced decreased by 40%. The development and aggravation of the problem was interrupted by the Second World War, which lasted from 1939 to 1945. The end of hostilities was marked by a local economic crisis that hit not only America, but also Canada. In the US, industrial production fell by 18.2%, Canada - by 12%. Capitalist countries reduced production by 6%.

The following world crises did not take long. The capitalist countries began to fight the economic recession in 1953-1954, and also in 1957-1958. One of the difficult moments in the development of mankind historians refer to 1973-1975. A distinctive feature of this time interval in history is a high level of inflation. The most important industries were affected. The problems touched the energy sector, raw materials, currency systems and agriculture.