Sociology Plus
Crises of Capitalism Definition
The crises of capitalism refer to the periodic economic downturns that occur within capitalist economies, typically associated with the trade cycle. Some Marxist theorists argue that these crises tend to intensify as capitalism develops, although Marx himself did not maintain this view consistently. A deepening of these crisis tendencies is often linked to a fundamental contradiction within the system: an increasing ‘socialisation’ of production, characterised by heightened interdependency among different parts of the capitalist structure, juxtaposed against a lack of any overarching mechanism for coordinating this system.
Theoretical Underpinnings
The cyclical nature of these crises reflects how the capitalist system adapts to changing conditions, with periods of crisis frequently succeeded by phases of rapid growth. While the necessity for ceaseless economic accumulation within capitalism is debated in relation to these tendencies, whether they are ultimately undermined by crisis-related forces that possess an ecological source remains a separate issue.
Intervention and Resolution
Historically, cyclical crisis tendencies have been managed through government intervention in the economy, particularly during the twentieth century. Although some critics suggest that such interventions may have been counterproductive, alternative policies aimed at mitigating these crisis-related tendencies also involve governmental action. Consequently, there is no compelling economic argument suggesting that the tendencies toward periodic or deepening crises within capitalism cannot be smoothed or overcome through government policy or increased inter-state intervention.