Interpretation Of The Root Of Current International Financial Crisis Based On The Theory Of Marxism

The current international financial crisis was the most serious international crisis since the Great Depression of the 1930s. The financial investment of China suffered huge losses, exports decreased, and large assets of foreign exchange reserved, U.S. dollar, faced enormous risks. China's economic development has been difficult. Against this background, it was necessary to study, in depth, the root causes of the global financial crisis, to think about some of the questions:First, how to determine the nature of the current crisis, and the current crisis has undergone important changes or not. The second, what factors have led to crisis, and how about development of the crisis. Third, the current crisis caused much impact on the world, what approach should be adopted in China deal with the crisis.This paper focuses on issues related to these questions above, and these questions were study and discuse in five chapters:Chapter 1 is an introduction. It descripts the basic process of the international financial crisis in brief, describes the basic framework of this papers, studys on the crisis of dialectical materialism and historical materialism.Chapter 2 is literature review. It sums up and generalizes the views on the root of current international financial crisis by domestic and foreign scholars, and then it classifies and comments these views. They can be divided into two categories:(1) Somebody said that the crisis has happened because of lack of supervision, underestimate the risk, overdraft consumption, neoliberalism and so on; (2) Somebody said that the crisis has happened because of the Human greed, capitalist system, the basic contradictions of capitalism and so on. Some of these ideas are relatively one-sided or even wrong. So it must be right to study on the root of the crisis by Marxism, to find the most profound causes of the crisis.Chapter 3 consists of three parts, studying on the crisis by Marxist crisis theory and Lenin's theory of imperialism:(1) It introduces the Marx's theory of economic crisis and financial crisis, and Lenin's theory of imperialism. It summarises what conditions the financial crisis would happen possibly, and what conditions the financial crisis would happen definitely. It finds the relationship of fictitious capital and financial crises. (2) The crisis of capitalism has undergone transformation with the changing times and changing economic structure. The proportion of service industries of global economic output increased, and the financial industry become the largest source of profits in capitalist country. Despite the ongoing crisis of capitalism, the essence of crises is still capitalist overproduction, but the form of crisis has evolved industry crisis into financial crisis. (3) Credit expansion and globalization are catalyst of the capitalism financial crisis. The real economies of capitalist countries have become "hollow" because of credit expansion. And the financial globalization accelerated, which also made the contradictions of contemporary capitalism to accumulate and deepen.Chapter 4 summarizes four characteristics of the current crisis by reviewing the history of capitalist crisis, and comparing past crises to the current crisis:(1) Overproduction and "excess demand" coexist; (2) Fictitious economy and real economic imbalance; (3) The current financial crisis affected severely on the world economy. (4) The financial hegemony of developed countries led by the U.S. became much clear. This work is of great reference value which many countries deal with financial crisis.Chapter 5 focuses on how China should deal with crisis. (1) To transform the economic development mode, continue to expand domestic demand; (2) To promote the financial reform of financial system, and explore the internationalization of RMB, participate in the financial reform of international financial system. On the other hand, we will adhere to Marxism, and approach towards Marxism, continue to take the socialist road with Chinese characteristics.In this paper, I strive to be innovative in the following areas:First, to study on the international financial crisis by Marxist crisis theory and Lenin's theory of imperialism.Second, to sum of the distinctions of capitalist "classical crisis" and "modern crisis". Overproduction and lack of demand can be seen, which is a "classic crisis"; but the current crisis has the performance of "excess demand". Third, to study on the relationship between the current crisis and fictitious economy. Profit-margin declined because of the real economy problems. Then capital gained into the fictitious economy until the crisis brok out.Fourth, to study on how the real economy problems lead to the sub-prime crisis, and how the sub-prime crisis lead to the international financial crisis.