misery and unemployment, and business is at a standstill. After a time, recovery sets in; there comes a renewed period of excessive activity, to be followed in turn by a new collapse. The cycle is repeated over and over again.
How can we explain this absurd state of affairs, wherein people become paupers in the midst of wealth ?
The question is not easy to answer. But we must answer it.
We have already learned that in capitalist society there prevails a disorder, or so to say an anarchy of production. Every factory owner, every entrepreneur, produces for himself, on his own responsibility, and at his own risk. The natural result in these circumstances is that sooner or later too many commodities are produced — there is overproduction. When there was production of goods but not of commodities, when, that is to say, production was not effected for the market, then there was no danger of overproduction. It is quite otherwise in the case of commodity production. Every manufacturer, in order that he may buy what he requires for further production, must first of all sell his own products. If in any particular place there is a stoppage of machinery on account of the anarchy of production, the trouble quickly spreads from one branch of production to another, so that a universal crisis ensues.