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Cyclical nature of capitalist economic crisis

The capitalist economic crisis is cyclical, which is determined by the staged nature of the movement of the basic contradictions of capitalism. When the basic contradictions reach a sharp level, the social production structure is seriously out of balance, triggering an economic crisis. The cycle of economic crisis generally includes four stages:

  1. Crisis: The basic contradictions become sharp, leading to the closure of enterprises, the decline of production, and the chaos of social and economic life.

  2. Depression: After the decline of production, the contradiction between supply and demand eases, and the society gradually enters the depression stage.

  3. Recovery: The economy gradually recovers and social production begins to rise again.

  4. Upsurge: The economy enters the upsurge stage, the productivity develops, and the basic contradictions are intensified again, leading to a new round of economic crisis.

As Marx pointed out, "the ultimate cause of all real crises is always: the poverty of the masses and the restriction of the consumption of the masses, while, in contrast, capitalist production strives to develop productivity, as if only the absolute consumption capacity of society is the limit of the development of productivity." Therefore, as long as the capitalist system exists, economic crises are inevitable.