How did overproduction cause problems in the economy

Overproduction uses up resources and floods the markets with cheap goods. It becomes a vicious cycle. As the resources get used up production cost increase. But prices keep falling because demand has been saturated. As a result production stops when prices get to low.

The cycle deepens at that point to what we call a depression. Workers are laid off and farmers loose their land. Debts go unpaid and banks have to close. People lose their savings and there is even less money to buy the surpluses stuffing the warehouses.

The only thing that can be done is increase employment and raise wage levels. Enough demand has to be created so that industry can retool and begin production in areas where there are new markets.

At first this was done with the "New Deal". Government spending into infrastructure created jobs and resources for new industrial growth. Programs like Social Security, banking regulations, and unemployment insurance helped stabilize incomes and protect savings. Legalization of unions greatly increased incomes.

Some say this wasn't enough and the depression wasn't going away. But, that's academic. Government spending did end the depression when WWII started. It was the perfect depression crusher. There was no danger of overproduction, most of the stuff was being destroyed as fast as it was being produces. Same for unemployment, men were being killed as fast as they could enlist or be drafted.

We haven't completely resolved things. The overproduction/recession cycle still goes on. Resources are being used up and the environment is being destroyed. Spending on infrastructure and war are still used to keep the recessions from becoming depressions. This spending produces enormous debts and no one really has an answer for what to do about that. The Socialist answer is to prevent overproduction but I'm not sure if that can be done peacefull

the mandate of heaven or tian ming (chinese: 天命; pinyin: tiānmìng; wade–giles: t'ien-ming) is a chinese political and religious doctrine used since ancient times to justify the rule of the king or emperor of china. according to this belief, heaven (天, tian)—which embodies the natural order and will of the universe—bestows the mandate on a just ruler of china, the "son of heaven" of the "celestial empire". if a ruler was overthrown, this was interpreted as an indication that the ruler was unworthy, and had lost the mandate. it was also a common belief among citizens that natural disasters such as famine and flood were signs of heaven's displeasure with the ruler, so there would often be revolts following major disasters as citizens saw these as signs that the mandate of heaven had been withdrawn.[1]

a brief flow chart describing the dynastic cycles in imperial china on claiming to withdrawing the mandate of heaven

the mandate of heaven does not require a legitimate ruler to be of noble birth, depending instead on the just and able performance of the rulers and their heirs. dynasties such as the han and ming dynasties were founded by men of common origins. the concept is in some ways similar to the european concept of the divine right of kings; however, unlike the european concept, it does not in theory confer an unconditional right to rule, despite this being exactly the case in practicality. the mandate would in theory be a preoccupation in a ruler's lifetime, when he would hold onto the mandate and live according to heavens. intrinsic to the concept of the mandate of heaven was the right of rebellion against an unjust ruler. chinese historians interpreted a successful revolt as evidence that heaven had withdrawn its mandate from the ruler. throughout chinese history, times of poverty and natural disasters were often taken as signs that heaven considered the incumbent ruler unjust and thus in need of replacement. the mandate of heaven was often invoked by philosophers and scholars in china as a way to curtail the abuse of power by the ruler. while each dynasty was not the same, they each had a lineage that passed on the prospective ruler by order of generational descent or their priority of birth. many emperors during the imperial times would optimize to have many sons who could be candidates to fill the position after the current ruler has died. in addition heaven was thought to be of how a ruler's works and performance was, which reflected upon how favorable they would be to heaven.