The Two Capitalist Crises of the Last Century: Some Comparative Notes

Abstract

Instability and crisis have been characteristic to the capitalist system from its berth. The capitalsit system emerged as a global system, creates global crises. The mainstream theory of economics lacks a rhobust theory of crisis, as stability and self-regulation is the core assuption of the paradigm. The heterodox theories such as Keynesian and Marxian theories provide a theoretical understnading behind the causes of the crisis. While Keynesian economics relies on only one forma of crisis, namely demand deficiency crisis, Marxist theory has greater penetration in its analysis and scope. The two great crises namely Great Depression of 1930 as well as Global Financial Crisis of 2008 have similar structure of boom-bust cycles. However the policy responses to the two have been different. The Neoliberal solution has saved from a depression, but do not seem to aviod a deep recession. While a second worls war II had come to the rescue the capitalism then, a Covid pandemic is threatening the global capitalism which is already under a recession. Thus a serious crisis is staring in the face of present day capitalism with no solutions in sight. The paper draws these insights from a comparative anlaysis of the two crises.