Topic: Is the crisis an integral part of the economic process or can it be prevented?
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Anti-crisis management in Russia has been developing for about 20 years. But, despite such a considerable period, not a single specialist in this field will be able to answer the question: "What is a crisis of social economic system Is it inevitable or can it be prevented?". Following the classical economic theory at the macro level - the level of the world economy and the economies of individual states, the crisis is understood as an inevitable phase of the economic cycle, but this phase is prerequisite for a new upsurge.
The theory of anti-crisis management at the micro level has nothing in common with the phase theory. And even vice versa, the crisis is not a phase, but a state that is caused by numerous external and internal factors. Thus, based on the cyclic (phase) theory, we conclude that crises are inevitable, and based on the theory of anti-crisis management, we can conclude that crises can be prevented.
It is also unclear whether there are objective regularities in the occurrence of crises at the level of enterprises and firms. Making attempts to consider the internal cycles and phases of development of enterprises (by analogy with the socio-economic system at the macro level), we see that organizations end their existence without any dependence on these phases. In practice, organizations and firms go through several periods: formation, growth and prosperity - this confirms the presence of phases, periods and waves of development. Consider an example: after a period of prosperity, as a rule, a decline occurs due to obsolescence of products or technologies. Timely organized and carried out modernizations (reforms) allow the company to gain new life and start the cycle again. How, then, to explain the fact that organizations experience difficulties and often go bankrupt, being in other phases? A large number of firms do not survive not only to a period of recession, but also to a period of recovery. In addition, some firms perform well in the adverse conditions of global economic depressions, and many suffer losses and declare bankruptcy during relatively prosperous times. During the financial crisis, a large number of prosperous organizations began to experience serious problems not because of their own miscalculations, but because of significant changes in the external environment.
The business cycle is the successive ups and downs of economic activity. Each economic cycle is individual and differs in intensity and duration. It is impossible to predict with mathematical accuracy the duration and time sequence of economic cycles. By its irregularity economic cycles more like weather changes.
Based on the concept of crises, I conclude that:
- It is impossible to avoid crises, because the stages of cyclic development are regular and regularly repeated. Crises can also be the result big mistake or natural disaster;
- When the potential of the main elements of the system is exhausted, crises begin, while elements of a new system, a future qualitatively new cycle, are born;
Consequently, crisis is necessary element of progress.
Crisis as "natural selection" reveals weaknesses and eliminates unreasonable ambitions; makes the strongest market participants find new ways of development and win the right to a place in the sun.
Since crises are individual, any crisis requires specific measures to overcome it.
In order to qualitatively manage the crisis, it is necessary to investigate not only its causes, but also its consequences. A crisis can be both positive and extremely negative.
In order to ensure a less painful and effective development of the socio-economic system, anti-crisis management is in place. We can safely diagnose that overcoming crises is a manageable process.
In order to successfully manage crises, one must be able to timely detect the first symptoms of its onset, which can be differentiated primarily by typological affiliations.
The way out of crisis situations with minimal losses directly depends on a competent analysis of the current situation in the economic system, therefore modern market labor needs highly qualified specialists in the field of anti-crisis management.
The whole process of anti-crisis management is based not on completely eliminating the crisis, but on directing it in the right direction for further, dynamic development of the economy.
Summing up the above, the crisis is the highest priority element of self-regulation market economy. A crisis always entails the end of one and the beginning of a new period of development. The economic crisis makes it possible to identify not only the limit of possibilities, but also the ways of economic development, stimulating progress. In times of crisis, incentives are born to significantly reduce production costs, increase profits, and the struggle between competitors intensifies.
Quite often we come across the word "crisis" in everyday life, and this concept is polysyllabic. And more and more often in the last decade, the word "crisis" is associated with economic instability, a decline in production and jumps in prices up and wages down. Do crises contribute to economic progress, and can they be avoided or prevented? This is further to be dealt with.
According to the definition given in the economic dictionary by B.A. Raizberg and L.Sh. Lozovsky, economic crisis manifests itself in a sharp deterioration in the state of the country's economy, when there is a recession in the manufacturing sector, natural economic ties are disrupted, enterprises suffer losses and go bankrupt, unemployment is growing, and the general level of well-being is declining. Thus, the crisis phenomena show that in economic sphere there was a serious imbalance, real indicators and the situation “on paper” are less and less the same, which is why there is a violation of the payment flow and balance of payments, the loss of liquidity of assets leads to an increase in unpaid liabilities, which, in turn, slows down the continuous movement of capital as an engine of production and economic processes.
Even Karl Marx determined that crises are characteristic of the capitalist economy, in particular, due to the fact that the gross domestic product is produced in excess of effective demand.
The Austrian school is characterized by an understanding of the economic crisis as a “crisis of overproduction”, when, due to the consistent distortion of information about income and expenses of future investment projects there is an overestimation of the expected profit, which leads to the depreciation of money and the creation of excess money supply due to an increase in demand for credit money, the rates for which are reduced. Society tends to spend money instead of accumulating it. As a result, incorrect investments do not bring the expected income, money does not return in full to the economy, a boomerang effect occurs: credit resources are not replenished, there is a shortage of real money against the background of an overvalued money supply, the economy suffers from an overabundance of gross domestic product due to the fact that investments are directed to obviously unprofitable projects. In order to return at least part of the money invested in economic development, investors sell "bad investments" at a significantly lower cost in order to return the money diverted to entrepreneurial projects into circulation. Against the background of a lack of money to pay debts, production is being reduced and optimized, first of all, there is a wave of layoffs.
Hence the fear of the majority of people of the crisis, as the labor market is overflowing with the supply of labor, there is competition for the employer, as a result of which wages are reduced, which is why the standard of living is falling. By and large, the population is not ready for crises for the reason that for many people the only source of income is hired labor, most often unskilled.
If you look at the economic phenomena characteristic of modern economies, you can see certain patterns of crises. Thus, many scientists different time concluded that economies have the quality of cyclicity.
Bulletin of Chelyabinsk state university. 2010. No. 28 (209). Economy. Issue. 30. S. 23-26.
V. E. Rossik
ORIGINS OF THE ECONOMIC CRISIS
The views on the economic crisis, the causes of its occurrence and the impact on the economy are considered. The conclusion is made about the systemic crisis in Russia.
Key words: systemic crisis, cyclicity, the main cause of the crisis.
It is well known that economic life society is not a smooth movement forward. It is subject to various negative influences (droughts, floods, wars, epidemics, etc.). Economic cyclicality is an objective form of development of a market economy. It is a wave-like movement of the economic situation (business activity) with a regular alternation of its ups and downs. One of the phases of the cycle is the crisis.
According to the representatives of the classical theory macroeconomic equilibrium(A. Smith, D. Ricardo, A. Marshal, etc.), the market economy is protected from recession by self-regulation mechanisms. The flexibility of such monetary forms, as a percentage, wage and prices, ensures equilibrium in the markets of capital, labor and money; market mechanism able to correct imbalances that arise in the scale National economy and no government intervention is required.
Both G. Malthus and S. Sismondi, in contrast to the aforementioned classics, believed that crises were inevitable and associated them with insufficiency aggregate demand for manufactured goods. At the same time, Malthus believed that the source of insufficient demand is the overaccumulation of capital, and Sismondi - the underconsumption of workers and capitalists: the underconsumption of workers is the result of a slower growth in income compared to the growth of masses of commodities, and that of capitalists is a consequence of a reduction in consumption, with the aim of accumulating capital. Both one and the other underestimated the investment component of aggregate demand.
American economist J. K. Galbraith, in his book The Great Crash of 1929, attributed the crisis to psychological causes. He wrote that the cause of the crisis lies in good expectations. The beginning is a general rise in prices for both stocks and real estate, items
art, etc. There is a rush in the market, prices are rising, and everyone is full of optimism. Galbraith gives a comparison with an inflated balloon, from which, in the event of a puncture, the air does not come out gradually, but immediately. This very accurately reflects the situation on the market when the crisis enters its active phase. He sees the following reasons for this phenomenon:
1. Wrong distribution of income. This means that the economy depends on a high level of investment and consumption of luxury goods, which is a consequence of the fact that a small part of the population receives most of the income.
2. Bad corporate structure. The constant presence of the risk of ruin due to the operation of the leverage effect in the opposite direction.
3. Bad banking structure. The fall of one bank like a domino brings down others.
4. The deplorable state of foreign trade
5. Weak level economic knowledge.
According to K. Marx, the main cause of the crisis is the process of circulation of capital. Stopping or changing this process entails a break in the circulation of capital. It is this aspect of capitalist production, i.e., the imbalance in the capital market, that is the specific cause of the economic crisis under capitalism. The same aspect also explains the periodicity of crises, their recurrence at certain intervals and similar, although not identical, manifestations, that is, the characteristic course of the economic cycle.
“...Immediately before a crash,” writes Marx, “an enterprise always looks almost exaggeratedly healthy. The best proof of this is given, for example, by the Reports on Bank Acts of 1857 and 1858, where all the bank directors, merchants, in a word, all invited as experts, with Lord Overston at the head,
congratulated each other on the flourishing and healthy development of affairs - just a month before the crisis broke out in August 1857. And Took, in his "History of Prices," surprisingly succumbs again and again to this illusion in the historical description of each individual crisis. Enterprises are always in the highest degree of health, and things are going in the most brilliant way, until suddenly collapse breaks out.
First of all, the crisis is revealed in the sphere of circulation and credit, although the fall in production is the main and central expression of the crisis. Price cuts and other signs of an incipient crisis signal an approaching fall in production.
The transition to depression is characterized by the suspension of the decline in production and its fluctuation at a low level.
J. M. Keynes recognized that the development of capitalism is faced with such contradictions that cannot be overcome spontaneously. The main of them J. M. Keynes considered the emergence mass unemployment and the lack of "effective demand" for goods, with the result that the supply of goods does not automatically match the demand for them. He saw the main defect of the former economic theory in the underestimation of the obstacles to the crisis-free development of the capitalist economy, which are created by "insufficient effective demand." By effective demand, Keynes meant capital investment, consumption, and government spending.
Monetarists explain the crisis by the causes of monetary properties. The most famous founders who developed a complete theory of crises on such grounds are K. Zhuglar and M. Friedman. Monetarists argue that market system ensures macroeconomic stability without government intervention and the economic growth. At the core monetarist concept crisis is the quantity theory of money, according to which money supply, which is in circulation, has a direct impact on the price level.
The instrument that determines the stability of production, prices and employment, they believe, is money. This means that money performs the function of managing demand, and through it - and business processes, in part-
features have a significant impact on the volume of production. Since monetarists believe that the velocity of money is relatively stable and predictable, then general equilibrium(including employment) is associated exclusively with the supply of money - their quantity. An unreasonable increase in the money supply leads to inflation, and a decrease leads to deflation. Both have a negative impact on the economic development of society. Therefore, the basis for stabilizing prices and maintaining moderate economic growth rates, they believe, is state control over the money supply in the country.
A significant part of the above theories are monocausal, that is, they reduce the origins of cyclicality to one or another main mechanism, which is a source of fluctuations that extend to all spheres of relations in society: economic, social, political.
N. D. Kondratiev is the author of the very first systematic concept of long-term fluctuations in the economy, which revealed their endogenous nature. Unlike the above authors, he, developing his own theory economic development society, did not confine itself to any one justification of cyclicity, but made its starting point a mode of production as a complex of all scientific, technical, economic, as well as political, social and other conditions. After conducting a detailed study of the economic development of England, France and the United States since the end of the 18th century, N. D. Kondratiev discovered three large cycles in the world economy:
I - from 1789 to 1814 (upward wave) and from 1814 to 1849 (downward wave);
II - from 1849 to 1873 (rise) and from 1873 to 1896 (decline);
III - from 1896 to 1920 (new upward wave).
The average duration of the "Kondratiev cycles" was 50-60 years, and the author based them on the spasmodic nature of scientific and technological progress, periodic revolutions in technology and production technology. The emergence of "long waves" is due to the fact that "bundles" of major innovations (for example, the invention of an internal combustion engine, a car, an airplane, etc.) give an impetus to eco-
nomic activity for several decades until their influence fades.
At the end of the 30s. 20th century Austrian economist J. Schumpeter put forward a general theory of cycles of different duration, which, when combined, provided a certain amplitude of macroeconomic fluctuations. This theory also relied on the scientific and technological factors of economic progress. In his book Business Cycles. Theoretical, historical and statistical analysis capitalist process "(1939) J. Schumpeter proposed the concept of the so-called three-cycle scheme economic dynamics, within which the half-century cycles of Kondratiev, 10-year Jouglar cycles and two-year Kitchin cycles were combined.
Describing their relationship, Schumpeter concluded that a longer cycle necessarily includes shorter periods of development, as a result of which "the range of each more long wave creates the proximity of equilibrium for the wave of the next order. At the same time, the main driving force of cyclicity is innovative activity entrepreneurs, mass investment in fixed assets.
In another book, Capitalism, Socialism and Democracy (1942), Schumpeter noted: long term investment, when conditions are changing rapidly, is almost as risky an exercise as shooting at a target that is not only hard to see, but also moves jerkily.
