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In economics
Economics

File:Ballard Farmers' Market - vegetables.jpgEconomics is the Social sciences that studies the Production theory basics, Distribution , and Consumption of Good and Service ....
, crisis is a term in Marxist theory, referring to the sharp transition to a recession
Recession

In economics, the term recession describes the reduction of a country's gross domestic product for at least two Calendar_year#Quarters. The usual dictionary definition is "a period of reduced economic activity", a business cycle contraction....
. See for example 1994 economic crisis in Mexico
1994 economic crisis in Mexico

The 1994 Economic Crisis in Mexico, widely known as the Mexican peso crisis, was triggered by the sudden devaluation of the Mexican peso in the early days of Ernesto Zedillo Ponce de Le?n presidency....
, Argentine economic crisis (1999-2002)
Argentine economic crisis (1999-2002)

The Argentine economic crisis was part of the situation that affected Argentina's Economy of Argentina during the late 1990s and early 2000s. Macroeconomics speaking, the critical period started with the decrease of real Gross Domestic Product in 1999 and ended in 2002 in Argentina with the return to GDP growth, but the origins of the collaps...
, South American economic crisis of 2002
South American economic crisis of 2002

The South American Economic Crisis is the economic disturbances which have developed in 2002 in the South America countries of Argentina, Brazil and Uruguay....
, Economic crisis of Cameroon
Economic crisis of Cameroon

The Cameroonian economic crisis was a downturn in the economy of Cameroon from the mid-1980s to the early 2000s. The crisis resulted in rising prices in Cameroon, balance of trade, and loss of government revenue....
. A financial crisis
Financial crisis

The term financial crisis is applied broadly to a variety of situations in which some financial institutions or assets suddenly lose a large part of their value....
 may be a banking crisis or currency crisis
Currency crisis

A currency crisis, which is also called a balance-of-payments crisis, occurs when the value of a currency changes quickly, undermining its ability to serve as a medium of exchange or a store of value....
. It is used as part of Marxist political economy
Political economy

Political economy originally was the term for studying production, buying and selling, and their relations with law, custom, and government. Political economy originated in moral philosophy....
, usually in the specific formulation of the crisis of capitalism. It refers to a period in which the normal reproduction of an economic process over time suffers from a temporary breakdown. This crisis period encourages intensified class conflict
Class conflict

Class conflict refers to the underlying tensions or antagonisms which exist in society due to conflicting interests that arise from different social positions....
 or societal change — or the revival of a more normal accumulation process.

Many or most observers of Karl Marx
Karl Marx

Karl Heinrich Marx was a Germanphilosophy, political economy, historian, sociologist, humanism, political theorist and revolutionary credited as the founder of communism....
's theoretical work argue that Marx himself did not come to a final conclusion about the nature of crises under capitalism
Capitalism

Capitalism is an economic system in which wealth, and the means of producing wealth, are private property and controlled rather than commonly, publicly, or state-owned and controlled....
.






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In economics
Economics

File:Ballard Farmers' Market - vegetables.jpgEconomics is the Social sciences that studies the Production theory basics, Distribution , and Consumption of Good and Service ....
, crisis is a term in Marxist theory, referring to the sharp transition to a recession
Recession

In economics, the term recession describes the reduction of a country's gross domestic product for at least two Calendar_year#Quarters. The usual dictionary definition is "a period of reduced economic activity", a business cycle contraction....
. See for example 1994 economic crisis in Mexico
1994 economic crisis in Mexico

The 1994 Economic Crisis in Mexico, widely known as the Mexican peso crisis, was triggered by the sudden devaluation of the Mexican peso in the early days of Ernesto Zedillo Ponce de Le?n presidency....
, Argentine economic crisis (1999-2002)
Argentine economic crisis (1999-2002)

The Argentine economic crisis was part of the situation that affected Argentina's Economy of Argentina during the late 1990s and early 2000s. Macroeconomics speaking, the critical period started with the decrease of real Gross Domestic Product in 1999 and ended in 2002 in Argentina with the return to GDP growth, but the origins of the collaps...
, South American economic crisis of 2002
South American economic crisis of 2002

The South American Economic Crisis is the economic disturbances which have developed in 2002 in the South America countries of Argentina, Brazil and Uruguay....
, Economic crisis of Cameroon
Economic crisis of Cameroon

The Cameroonian economic crisis was a downturn in the economy of Cameroon from the mid-1980s to the early 2000s. The crisis resulted in rising prices in Cameroon, balance of trade, and loss of government revenue....
. A financial crisis
Financial crisis

The term financial crisis is applied broadly to a variety of situations in which some financial institutions or assets suddenly lose a large part of their value....
 may be a banking crisis or currency crisis
Currency crisis

A currency crisis, which is also called a balance-of-payments crisis, occurs when the value of a currency changes quickly, undermining its ability to serve as a medium of exchange or a store of value....
. It is used as part of Marxist political economy
Political economy

Political economy originally was the term for studying production, buying and selling, and their relations with law, custom, and government. Political economy originated in moral philosophy....
, usually in the specific formulation of the crisis of capitalism. It refers to a period in which the normal reproduction of an economic process over time suffers from a temporary breakdown. This crisis period encourages intensified class conflict
Class conflict

Class conflict refers to the underlying tensions or antagonisms which exist in society due to conflicting interests that arise from different social positions....
 or societal change — or the revival of a more normal accumulation process.

Many or most observers of Karl Marx
Karl Marx

Karl Heinrich Marx was a Germanphilosophy, political economy, historian, sociologist, humanism, political theorist and revolutionary credited as the founder of communism....
's theoretical work argue that Marx himself did not come to a final conclusion about the nature of crises under capitalism
Capitalism

Capitalism is an economic system in which wealth, and the means of producing wealth, are private property and controlled rather than commonly, publicly, or state-owned and controlled....
. Instead, his many works (published and unpublished) suggested several different theories, none of them free from controversy. A key characteristic of these theories is that none of them are natural or accidental in origin but instead arise from the nature of capitalism as a society. In Marx's words, "The real barrier of capitalist production is capital itself.

These theories include:

  • The tendency of the rate of profit to fall
    Tendency of the rate of profit to fall

    The tendency of the rate of profit to fall, commonly abbreviated to TRPF, is a hypothesis in economics and political economy, generally accepted in the 19th century, but rejected by mainstream economics economists today....
    . The accumulation of capital
    Capital accumulation

    Most generally, the accumulation of capital refers simply to the gathering or amassment of objects of value; the increase in wealth; or the creation of wealth....
     involves a general tendency for the degree of capital intensity
    Capital intensity

    Capital intensity is the term in economics for the amount of fixed or real Capital present in relation to other factors of production, especially labor....
    , i.e., the "organic composition of capital
    Organic composition of capital

    The organic composition of capital is a concept created by Karl Marx in his critique of political economy and used in Marxian economics as a theoretical alternative to neo-classical concepts of factors of production, production functions, capital productivity and capital-output ratios....
    " of production to rise. All else constant, this leads to a fall in the rate of profit
    Rate of profit

    In economics and finance, the profit rate is the relative profit of an investment project, of a capitalist enterprise, or of the capitalist economy as a whole....
    , which leads to a slow-down of capitalism and perhaps a crisis.


  • Underconsumption
    Underconsumption

    In underconsumption theory, recessions and economic stagnation arise due to inadequate consumer demand relative to the amount produced. It is an old concept in economics, going back to Thomas Malthus if not earlier....
    . If the capitalists win the class struggle to push wages down and labor effort up, raising the rate of surplus value
    Surplus value

    File:Surplus-value.jpgSurplus value is a concept created by Karl Marx in his critique of political economy, where its ultimate source is unpaid surplus labor performed by the worker for the capitalism, serving as a basis for capital accumulation#Marxian concept of capital accumulation....
    , then a capitalist economy faces regular problems of inadequate consumer demand
    Consumption (economics)

    Consumption is a common concept in economics, and gives rise to derived concepts such as consumer debt. Generally consumption is defined by opposition to Production theory basics....
     and thus inadequate aggregate demand
    Aggregate demand

    In economics, aggregate demand is the total demand for final goods and services in the economy at a given time and price level. It is the amount of goods and services in the economy that will be purchased at all possible price levels....
    .


  • Full employment
    Full employment

    In macroeconomics, full employment is a condition of the national economy, where nearly all persons willing and able to work at the prevailing wages and working conditions are able to do so....
     profit squeeze.     Capital accumulation can pull up the demand for labor power
    Labor power

    Labour power is a crucial concept used by Karl Marx in his critique of capitalism political economy. He regarded labour power as the most important of the productive forces....
    , raising wages. If wages rise "too high," it hurts the rate of profit
    Rate of profit

    In economics and finance, the profit rate is the relative profit of an investment project, of a capitalist enterprise, or of the capitalist economy as a whole....
    , causing a recession.


In theory at least, these different views may not contradict each other and may instead be complementary parts of a synthetic crisis theory.

See also

  • Capital, Volume III
    Capital, Volume III

    Capital, Volume 3, subtitled The Process of Captialist Production as a Whole was prepared by Friedrich Engels from notes left by Karl Marx and published in 1894....
  • Crisis theory
    Crisis theory

    Crisis theory is a debate within the Marxian theory of political economy. It is concerned with explaining the business cycle in capitalism, particularly recession, drawing on Karl Marx's account of labor theory of value....
  • Economic collapse
    Economic collapse

    An economic collapse is a devastating breakdown of a national, regional, or territorial economy. It is essentially a severe economic depression characterised by a sharp increase in bankruptcy and unemployment....
  • International crisis
    International crisis

    An international crisis is a crisis between states. There are many definitions of an international crisis. Snyder "...a sequence of interactions between the governments of two or more sovereign states in severe conflict, short of actual war, but involving the perception of a dangerously high probability of war"....


External links

  • "" by MIA Encyclopedia of Marxism