  The origin of economic crises is a key problem for economics. We present a
model of long-run competitive markets to show that the multiplicity of
behaviors in an economic system, over a long time scale, emerge as statistical
regularities (perfectly competitive markets obey Bose-Einstein statistics and
purely monopolistic-competitive markets obey Boltzmann statistics) and that how
interaction among firms influences the evolutionary of competitive markets. It
has been widely accepted that perfect competition is most efficient. Our study
shows that the perfectly competitive system, as an extreme case of competitive
markets, is most efficient but not stable, and gives rise to economic crises as
society reaches full employment. In the economic crisis revealed by our model,
many firms condense (collapse) into the lowest supply level (zero supply,
namely bankruptcy status), in analogy to Bose-Einstein condensation. This
curious phenomenon arises because perfect competition (homogeneous
competitions) equals symmetric (indistinguishable) investment direction, a fact
abhorred by nature. Therefore, we urge the promotion of monopolistic
competition (heterogeneous competitions) rather than perfect competition. To
provide early warning of economic crises, we introduce a resolving index of
investment, which approaches zero in the run-up to an economic crisis. On the
other hand, our model discloses, as a profound conclusion, that the
technological level for a long-run social or economic system is proportional to
the freedom (disorder) of this system; in other words, technology equals the
entropy of system. As an application of this new concept, we give a possible
answer to the Needham question: "Why was it that despite the immense
achievements of traditional China it had been in Europe and not in China that
the scientific and industrial revolutions occurred?"
