Dissertation > Economic > Economics > History of Economic Thought > World > Economic ideology of Marxism - Leninism > Marx and Engels of Economic Thought

On the comparative study of Marx theory of crisis and the western mainstream economic crisis theory after Subprime Mortgage Crisis

Author LiuYue
Tutor HeLin
School Shaanxi Normal University
Course History of Economic Thought
Keywords economic crisis Keynes doctrine The new liberalism Marxdoctrine
CLC F091.91
Type Master's thesis
Year 2013
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In the wake of economic crisis, caused by overproduction since1825in capitalist society as the first of its kind, periodic economic crisis caused by overproduction has continuously disrupted the course of market. As history moves on, scholars from different schools had proposed varied economic theories regarding the ongoing economic crisis, all of whom tries to explain the happenings of crisis on the ground of their own theories. Inevitably, the change of mainstream economic theory has led to the altering of the nation-wide policies, where the capitalism moved forwards in its own pace, together with the outbreak of crisis with different explanations. After the burst of sub prime crisis in United States back to2007, fusing later near-global financial meltdown, topics concerning what leads to the happening of economic crisis and how to prevent it draw scholars’ attention anew.Theories toward the current crisis can be divided into two schools:mainstream capitalistic economics and Marxism economics. With regard to capitalistic economics, financial innovation and regulation dereliction are the criminals, rather than the hard-wired capitalism, because the acting form of this crisis is absolutely diverse from the previous ones. However, this analytic view has not taken consideration of the development course of capitalism. Ignoring the institutional principles. Although they have followed the rule of "being humane", they have not left the traditional logic pattern of western economics. Besides, starting from the view of western economics, in order to protect capitalistic interest, scholars could not fully understand the roles capitalism has played in the crisis, taking solutions out of the equation.When we unveil the mask of crisis, such as over-innovation and regulation dereliction, and look deep inside the core, the Marxism regarding economic crisis has provided us a brand new starting point. By employing the Marxism principles, we could look through the surface of the problems, touching the essence. The theory, in aspects of possibility of the crisis and practical reasons, categorizes the crisis and describes the spread of the crisis. According to the theory, the crisis stems from the overproduction, the contradiction between private means of production and socialized production, which has been regarded as the basic conflict in capitalistic societies.This paper holds strong faith in the understanding of Marxism; we try to get rid of the means by which western economists studies the economic crisis as an independent subject and predict the inevitability of crisis in historic patterns. According to our analysis regarding the comparison between Marxism theories and capitalistic theories, we attempt to conclude the root to the understanding of Marxism. Both "the visible hand" from Keynesianism and "the invisible hand" from neoliberalism are superficial attempts, because the reason leading to the crisis lay deep in the basic contradiction of capitalism. As long as the capitalism exists, the economic crisis could be unstoppable. During the study of western countries, there are several suggestions regarding crisis prevention in China:first, reinforce the supervision in financial field by learning from the failure United States has received. Secondly, taking steps to initiate the effective demand by using fiscal policies and monetary policies when studying the Keynesianism in US. Thirdly, using Marxism to analyze the economic crisis and trying to solve the puzzles in income distributions. As long as we could mitigate the contradiction in excessive income gap, problems, such as, weak domestic demand, change in the mode of economic growth and trade imbalance would be solved.

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