The Causes and Solutions of Capitalist Economic Crisis

Abstract

The capitalist economic crisis has brought great damage to the operation of the world economy. The essence of the capitalist economic crisis lies in the inherent contradiction of the capitalist system. Based on the performance of the American subprime crisis in 2008, this paper deeply analyzes the causes of the capitalist economic crisis and puts forward solutions from the analysis of the causes, to avoid risks and prevent them in the future. The study found that the fundamental cause of the subprime mortgage crisis is the basic contradiction of the capitalist mode of production, and the direct cause is the transfer of financial risks. The external cause of the economic crisis is the distortion of financial credit rating and weak supervision, and the reason for the traditional ideological theory is liberal belief.