Study On The Subprime Crisis Based On The Marx's Financial Crisis Theory

Although there are two years after the breaking out of the subprime crisis, the world economy still struggle to get rid of this financial storm. The financial crisis had broken out more frequently in recent thirty years. Today's financial crisis has different features. First, the financial crisis is less and less dependent on the economy crisis. Second, the financial crisis had broken out more frequently. Third, the financial crisis is monetary crisis in fact.The western scholars did a lot of research about the cause and behave of the crisis, for example, the monetary crisis matrix, the debt crisis matrix and the bank crisis matrix, even the herd behavior research. These researches explain one aspect of the crisis, however, none of which can provide a comprehensive explanation about the essence of the crisis. After the breaking out of the subprime crisis, there were also many literatures, which were published so as to find the key problem of the crisis. All of which focus on the financial innovation and the irresponsible supervision. They pointed out that the financial innovation and incorporation is the root of the crisis. Is it real?When we uncover the veil of the subprime crisis to look into its essence, the Marx's financial theory can provide us a new angle of view on analyzing this problem. Marx classified the financial crisis and analyzed the diffusion of the crisis, standing on the aspects of possibility and fact of the crisis. He pointed out that the essence of the crisis is overproduction and the root of which is the basic contradiction of capitalism. At the same time, Marx also analyzed features of the dummy capital, which are speculation and value reversion. Marx provided us a persuasive explanation of the crisis relying on his penetrating discernment.This discourse studies from the aspect of the proposition which says the overproduction is the key feature of every crisis, clarifying the Marx's financial theory. The logical chain is:the background of the subprime crisis—the subscription of the subprime loans—the securitization of the subprime loans—the breaking out of the credit crisis. At last, this article tries to analyze the connection between the economic liberalization and the cause of the crisis.This article not only describes the background of the crisis, but also analyzes the overproduction of correlative financial tools from the micro-perspective. In summary, the conclusion is that the financial innovation is not the root of the subprime crisis, the essence of which is the overproduction, and this crisis is the credit crisis, the root of the crisis is the economic liberalization.