The Analysis And Revelations Of The Three Major Economic Crises In The Recent One Hundred Years

This paper is aimed to explore the nature and the underlying causes of the threeeconomic crises which are the Great Depression in1929, the Asian financial crisis in1997, the Subprime Crisis in2008. By reviewing the history of the economicdevelopment in the recent one hundred years, the paper respectively analyzes thecharacteristics of these three major economic crises in both theoretical and practicalperspective, using the Principle of Classical Economics, the Principle of MarxistPolitical Economics, and the Principle of Modern Western Economics.This paper argues that the causes of the Great Depression in1929, the Asianfinancial crisis in1997, and the Subprime Crisis in2008lie in that the economicviews of these capitalist countries had been unable to adapt to the rapid developmentof the world situation, the highly developed productive forces as well as the situationof economic globalization. The deeper roots lie in the inevitability of conflictsbetween the development of the productive forces and capitalist ownership in everyhistorical phase, that is the inherent flaw of the capitalist system.The first part is the introduction, which introduces the background of thisresearch, and lists the three research methods, and expounds the innovation and theinadequacies of this paper..The second part is the paper introduces the theoretical reviews. The paper firstlycites the overview on these three economic crises from various economy schools,reviews the causes of the economic crises and summarizes different opinions.Secondly, the article refers to the average profit theory, the discussion onoverproduction which can triggers crises according to Principle of Marxist PoliticalEconomics，as well as the Say’s law according to Western classical economics. Byusing these theories, the paper is trying to analyze the backgrounds and causes ofthese three economic crises in order to get some Revelations.The third part, the paper analyzes the overview about the Great Depression in1929. This part first introduces the historical background of the Great Depression and analyzes the causes which trigger the crisis. At that time, in the capitalist world, theidolatry for the principle of the classical economics led to the Hoover administration’s"laissez-faire" national economy. The government strengthened the role of marketwhich was allocating resources and ignored the relationship between economic lawsand objective economic conditions, resulting in the outbreak of the crisis.In the fourth part, the article analyzes the Asian financial crisis in1997. It firstintroduces the situation and the background, and analyzes the causes of the crisis. Thehot money of western countries was the direct cause of the crisis, but the deeperreason lay in the departure from the average profit theory during the rapid economicdevelopment. Too much emphasis on the development of the virtual economy andignoring the development of industrial entities were the causes of a serious imbalanceof the countries’ economic development. As a result, once there was an incentive, itwould lead to a negative effect of these long-term problems, and trigger the breakoutof the crisis.The causes of the crisis has been found by sorting out the background and statusof the Subprime Crisis in2008, which includes the high-speed development of the USeconomy, the abandonment of the manufacturing and other traditional Americaneconomic pillars by the capitalists because of the rising labor costs, the crossing of theindustries from labor-intensive to technology-intensive, and the shift of the economicengine from manufacturing to high-tech industries. While with the development of thesocial economy, the malpractice of high-tech industry had shown frequently. Thecountry, whose economy had slowed down, had to shift the economic focus to the realestate industry and promote the economic growth relying on domestic demands, whilethe over-stimulation of the real estate industry development had brought about thesocial overproduction and intensified conflicts which resulted in the outbreak of thecrisis eventually.The article has explored the revelations brought by the three crises throughanalyzing them one by one. The inherent defects and the basic contradictions of thecapitalism are the fundamental causes of all the crises, meanwhile, in the recent onehundred years, the commonality which triggered all crises is the rapid economic development. The spread of the globalization promoted the rise of the imperialistmonopolies in the world and the world economy was affected as a whole. Facing withthe coexistence of the challenges and opportunities of the economic globalization,how countries respond to them effectively in such environment is a problem. Liberaleconomy always advocates the governments keep out of the market. We have tofigure out how to strengthen the governments’ power of allocating the resources inorder to compensate the market defects and how to balance the economic marketdevelopment when the crisis breaks out and the market failure occurs. For centuries,the capitalist world has experienced turbulence again and again, however, the Marxistideology has always shined the world. With the development of the world, Principleof Marxist Political Economics will finally reform the global economy once again,which will lead the world to prosperity. By summing up the commonality of the crises,our country hopes to learn a lesson from it and understand the causes of the threecrises correctly, so that we can adopt effective response policies and measures, andlook to the sustained and healthy economic development and social harmony andstability. Consequently we can enhance our international competitiveness and avoidthe crisis effectively.