Economic crisis is a phenomenon that one or more economies or the whole world economy shrinks in a long period of time. Economic crisis is not unique to the capitalist world, but also occurs under the socialist economic system, and it is more serious. For example, there have been many serious economic crises in the Soviet Union (causing three famines), and so has China.

The economic crisis in the capitalist world and the socialist economic crisis have different causes, different forms and, of course, different results. The capitalist economic crisis is mainly caused by overheating of economic activities, resulting in overproduction, unsalable products, declining profits and even bankruptcy of enterprises. The economic crisis is actually throwing cold water on the overheated economy and avoiding the complete collapse of the economy. Due to the natural adjustment mechanism of capitalist economy (mainly natural adjustment, supplemented by government intervention), the next round of economic recovery will inevitably come after the economic crisis. When the economy recovers to a certain extent, it may overheat and the economic crisis will happen again, and it will happen again and again. However, the general economic trend of capitalism is gradually rising, but this rise is wave-breaking. Therefore, it can be said that the economic crisis is inevitable, and the capitalist economic crisis is a part of economic adjustment and an incomplete bad thing.

The cause of the socialist economic crisis is different from that of capitalism (not because of overheating), but because of shrinkage. The inherent attribute of the socialist economy, the public ownership of the means of production violates the law of economic development, stifles the enthusiasm of workers for production, causes the slow development or even stagnation of productivity, and makes productivity at a very low level, so that production shrinks, commodity circulation is not smooth, market shrinks, and even daily necessities are scarce. The socialist economic crisis has no certain rules, and it is often related to politics. For example, the three-year famine from 1958 to 196 1 was entirely caused by the three red flags movement in Mao Zedong. The solution to the socialist economic crisis is also different from capitalism. Because the socialist economy lacks natural adjustment, the solution can only be government intervention, and the result is not satisfactory.