One need only think of the horrific economic crises of the Great Depression of the 1930's out of which grew facism and a world war, to realize that these crises are among the most devastating manifestations of the irrational logic of capitalism. As our analysis implies, crises of this sort are not historical accident. They are inevitable out comes of a system in which capatalists are compelled to do everything possible to increase the production system in which capitalists are compelled to do everything possible to increase the production of their enterprises. In order to keep pace with competition, capitalist must introduce new technologis such as coumputers and fiber optics that speed up the pace of work and lower  the costs of their products. But with every capitalist puchasing new machines and equipment and building the most modern plants they can, several things happen. First, they thake on huge new costs, often financed by borrowing from the banks. Second they develop massive new cpacities for producing everyting from cars to computer chips - capacities that often greatly exceed any reasonable expectation of market demand.  This result is what Marx described as a  crisis of over-accumulation, in which capitalist have accumulated more facilities and means of production than they can  possibly use profitably. Faced with massive capacity and the costs these involve the inadequate sales and profits, some capatalists begin to teeter on the erge of bankruptcy. or collapse.

In the world auto indutry today, for instance, frims have the capacity to produce seven to eight million cars more each year than the existing demand requires. That is the equivalent of the world excess of about eighty state of the art car factories. Not suprisingly, when the global economic slowdown hit in early 2001, auto firms begin to lay off worker, close factories and cut cost dramtically: Ford announced layoffs of 5,000  workers in North aAmerica, whic General Motors  Europen company Opel gave pink slips to similar numbers. Before the shake-out in the auto industry is over, dozens of factories will close.

Similar trends have hit the telecommunications sector where one compay after another has been melting down. In an analysis that comfirms Marx's basic theory of capitalist over accumulation, a Wall Strret Jounal artical on the telecom crises reported, Oceans of cheap capital  and competitive one upmanship drove telecommunications and Intenet service providers to build far more capacity than a realitic forcast of demand could justify. Now, many of those companies are bankrupt, or close to it.