The reasons for the outbreak are as follows:

1. Specific reasons

The contradiction between production (supply) and sales (demand).

(1) The gap between the rich and the poor is too large: the capitalists blindly expand production, the people are relatively poor, and the purchasing power is lower than the production capacity.

(2) excessive expansion of credit consumption leads to false prosperity of the market and aggravates the contradiction between production and sales.

(3) The stock speculation is excessive, and the stock cannot reflect the actual situation of economic operation, resulting in false economic prosperity and covering up contradictions.

(4) laissez-faire influence of economic thought makes the whole social production in anarchy.

2. The root cause

The contradiction between socialization of production and private ownership of means of production is the basic contradiction in capitalist society.

3. The direct cause

The rampant stock speculation concealed the contradiction between production and sales.

4. Policy reasons

Domestic policy mistakes in various countries, that is, the economic crisis is the product of laissez-faire policies.

Extended information:

1. Background of economic crisis:

After World War I, the victorious countries held the Paris Peace Conference and the Washington Conference, established the Versailles-Washington system, temporarily adjusted the relations between imperialist countries, and in the 192s, the capitalist world was in a relatively stable period and entered the rapidly developing golden decade.

2. The impact of the economic crisis

(1) Economic adjustment has worsened international relations: major capitalist countries have raised tariffs and devalued their currencies in order to get rid of difficulties. These practices have led to further chaos in the world economy and worsening international relations.

(2) triggering a political crisis: the unprecedented serious economic crisis has been protracted, fascism has begun to spread in some countries, capitalism is facing a serious political crisis, and the bourgeois democratic system is crumbling.

Baidu Encyclopedia-World Economic Crisis