Economic Crisis Dbq

Decent Essays
The World has been the scene of many economic crises and these tempted many great minds to think about the reasons behind these crises. Their reasoning generally affected by the time and geography they lived in. Capitalism started with and led to the many economic crises even in its earlier stages. Late 18th and 19th centuries had witnessed many economic recessions, unbalances, instabilities in Western Europe and Marx and Malthus are the two of the best-known economists of this era who tried to explain ongoing economic crisis their society facing with. With agricultural revolution, the supply of food increased enormously throughout the era that fastened the grow of the population while increasing the number of people who weren’t needed in agricultural …show more content…
Malthus argues that overpopulation is a result of the lure of sex. Especially in the general gluts times, with the increase in wages, workers tend to intercourse more without abstaining from childbearing as a result of the raise in their affordability. After a while, these new children may lead overpopulation and if we are lucky, their number would decline through famines, wars or epidemics because there is no way to sustain these many people with the available land to agriculture. So, food cannot increase as fast as the population and underconsumption-led economic crises are inevitable if the population isn’t stabilized either by force or people’s avoiding from having children. Xe see capitalism as a not- self-sustainable system. Xe blame workers as the class who contribute the overpopulation at most because of their lack of education what otherwise make them think twice before having children. Additionally, of capitalists who owe the capital are eager to save rather than producing basic consumption goods as a result of their profit-seeking behavior and thus do nothing other than increasing underconsumption by keeping prices at a level that cannot be afforded by workers who produce the goods. Xe favored aristocrats among all classes because xe believed that their tendency to spend …show more content…
Marx starts xyr investigation by dividing goods into two subcategories: producer goods and consumer goods. Xe implies that the factors used in production cannot join the market until the production process end. Both the costs of production goods and labor are paid by capitalists so there is no need to count consumption and investment as different parts while speaking of aggregate demand. Moreover, the income of landlords are the rents paid by capitalists so their consumption is also a part of capitalists’ costs and thus the only class with power to affect demand is capitalists. Supply is also determined by capitalists because they are the ones who decide what to produce and how much to produce. So they have the power to build supply and demand balance. No matter how recklessly workers childbearing or landlords spend, capitalists are the one who determines the purchasing power of both themselves and other classes. Yet, they act as profit-seeking individuals, not as a class with mutual goals and thus they can’t or don’t use the power they have to stimulate balanced growth. So, Marx claims that underconsumption is a fault of capitalists, who impose longer working hours to labors without payment to produce a surplus. Marx points out that capitalism inherently brings crises to the system which will

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