Crisis - what is it? Essence, causes, ways to overcome

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:43

Human needs are limitless, which cannot be said about the resources of our planet. Therefore, all technological progress is aimed at ensuring a decent standard of living for as many people as possible. However, long-term economic growth is not uniform. Periods of prosperity alternate with instability. A crisis is a state of imbalance between consumption and production on a social scale. Periods of instability are characterized by a deterioration in the standard of living of the population, but they are an integral part of economic development. In this article, we will consider the essence, types, causes and ways out of crises.

Definition

Considering the meaning of the word "crisis", it is logical to start with the origin of this term. Translated from Greek - turning point, decision, outcome. A crisis is any event that can lead to an unstable or dangerous situation that affects an individual, a group of people or an entire society. Negativechanges often occur not in one area, but in several at once. The economy, politics, security, public relations, and even the environment are affected.

Essence

There is no consensus among economists on what constitutes a crisis. This, of course, is a negative phenomenon, according to all scientists. But its causes and effects differ, depending on the direction we take to study. In the USSR, it was believed that the crisis is an integral attribute of the exclusively capitalist mode of production. But in a socialist society there can only be "difficulties in growth." Some modern scholars believe that the concept of crisis is applicable only to the macroeconomic level. This phenomenon is manifested in the overproduction of goods, which leads to mass bankruptcy of business entities, an increase in unemployment among the population and other socio-economic problems. Scientists view the crisis as a condition that cannot be overcome without fundamental internal and external changes.

Functions

Periodic crises are an essential attribute of development. They undoubtedly lead to a deterioration in the life of the population. Despite this, crises are progressive in nature. They perform the following main functions:

• Removing obsolete and exhausted elements of the dominant system that impede its further development.
• Fostering the approval of new rules.
• Strength testing of system elements and inheritance of only the most effective.

When considering what a crisis in the economy is, it is important to understand that this is a phenomenon, and not a one-time event. At first, one can observe the latent period of its development, when the prerequisites are only maturing. The national economy at this time is still characterized by stable development. At the second stage of the crisis, there is a rapid aggravation of the existing socio-economic contradictions. At the third stage, prerequisites are created for overcoming the latter and a revival in the national economy begins.

Typology

The crisis is called the extreme aggravation of socio-economic contradictions. This phenomenon can cover the entire system as a whole or only part of it (separate areas). In the first case, we are talking about a general crisis, in the second - about a local one. Also, this phenomenon is characterized by its problems. Depending on the scale of the latter, macro- and micro-crises are distinguished. This phenomenon is also classified according to the scope and causes of occurrence. Allocate economic, social, psychological, technological and organizational crises. And for the reasons of occurrence - ecological, social and natural.

Prerequisites and ways to overcome instability: crisis-2015

Forecasts for Russia by leading international institutions and domestic experts for several years in a row say that the economy is in a recession phase. On the inevitability of a crisis inMany journalists wrote in 2015. The government did not deny the possibility of a recession either. The reasons for the crisis of recent years in Russia have been low oil prices, the exchange rate of the national currency, inflation, and high lending rates. The way out of this negative situation is a radical restructuring of the socio-economic system. It is necessary to understand what the key problems are and eliminate them. To overcome the crisis, it is necessary to think over the economic concept and development strategy. For example, Russia should reorient itself from the export of raw materials and semi-finished products to goods with higher added value. And for this, investments in science and advanced developments, as well as the development of human capital, are paramount. A crisis is a complex phenomenon, so you can't deal with individual problems, you need to think about all areas and plan for the long term.