Since the beginning of the 19th century , i.e. , since the coming of large – scale machine industry into existence , the economy of capitalist countries is periodically shaken by economic crises . The first economic crisis that involved the entire economy of the country occurred in England in 1825 . In 1836 England was shaken by a new crisis which also spread to the U.S.A. The next crisis occurring in 1847-48 was a world crisis . It was followed by the crises of 1857 , 1866 , 1873 , 1882 and 1890. In the 20th century crises occurred in 1900-03 , 1907 , 1920-21 , 1929-33 and 1937-38 . Since World War II the U.S.A. , for example , had four crises ( 1948-49 , 1953-54 , 1957-58 and 1960-61 ) . The 1957-58 crisis was a world crisis involving countries accounting for almost two – thirds of the industrial output of the capitalist world . The economic crises under capitalism are overproduction crises . During a crisis the goods have no market because more goods have been produced than can be purchased by consumers whose purchasing power is limited . The over production of goods does not in any way mean that the needs of all members of society have been satisfied . On the contrary , during a crisis the working people find themselves in particularly difficult straits and their living standards are sharply affected . Because of the growth of unemployment enormous numbers of people are completely deprived enormous of all means of subsistence . The excess of goods does not apply to the real needs of society , but to the inability of the population to buy these goods ; the overproduction of goods during a crisis is therefore relative . The economic crises of overproduction are based on the contradiction between the social character of production and the private – capitalist form of appropriation of the results of production . Millions of people work at capitalist enter prises , but all they produce belongs to the owners of the enterprises . However much a worker may produce he can buy only the amount his wages enable him to buy . In pursuit of the greatest profits capitalists expand pro duction , perfect the technology and throw quantities of goods on the market . But the increase in the workers ‘ wages , if they increase at all , lags behind the growth of production . This means that the effective demand of the working class , the broad masses of the working people , relatively decreases . The expansion of capitalist production inevitably runs into the limited consumption capacity of the main masses of the people . The main contradiction of capitalism manifests itself in the class antagonisms between the proletariat and the bourgeoisie . The characteristic capitalist discrepancy between the two most important conditions of production – between the means of production concentrated in the hands of the capitalists and the direct producers deprived of the means of production and owning only their labour power – shows itself particularly clearly in the crises of overproduction with an excess of the means of production and products , on the one hand , and an excess of labour power , a mass of unemployed deprived of the means of subsistence , on the other . The crises aggravate the class antagonisms between the proletariat and the bourgeoisie , and between the peasants and the landowners who exploit them , the class struggle in capitalist society intensifies , and broad masses of the working people take part in this struggle . Crises are an unavoidable concomitant of the capitalist mode of production . They cannot be eliminated as long as capitalism exists . They indicate very clearly that the productive forces created by capitalism have outgrown the bourgeois production relations with the result that the latter have become an impediment to the further growth of the
productive forces . To ensure this growth , it is necessary to abolish capitalist private ownership of the means of production and the capitalist production relations . By developing the productive forces and socialising production capitalism objectively creates the material prerequisites for socialism . At the same time it engenders the force which is destined to transform society . This force is the working class .

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