The old-fashioned future
Sep. 12th, 2005 11:51 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
imomusIf we like something we tend to say that it represents the future and describe any movement towards it as "progress" and "modernization" and "success". We also make sure to call the opposite of the thing we like "conservative" and associate it with the past, and with failure. We describe our liked thing with swishy modern-sounding words like "streamlining" and "efficiency" even when the things being "streamlined" away are people losing their jobs, and it's not quite clear who exactly is benefitting from the "efficiency". Well, actually, it is clear, but we don't choose to dwell on that. It's divisive, you see.
The thing we like, if we're quite a sizeable majority of the press covering the Japanese election yesterday and the reasons leading up to it, is capitalism. Free markets, the international flow of capital, that sort of thing. We love that stuff, and we can't get enough of it. We love it when a politician gets that religion, because it means he's going to start handing over power and money locked up in the public sector to our guys in the private sector. So we call him a "reformist" and a "liberaliser" rather than "a man in the public sector who seems to be cutting off his nose to spite his face by handing power over to the private sector". And because we like him, we portray the conservative party he's in as a radical and liberal party, and his holding onto power as a radical shift in power. Yes, the Japanese people are sick of things as they are, and have spoken up loudly for change! And so the LDP, which has been in power in Japan almost without interruption for the last several decades,has been ousted is still in power! Hurrah for radical change, and hurrah for the-future-not-the-past!
In the past, of course, "reform" used to mean curbing the excesses of capitalism; passing legislation that stopped people employing children in their factories, widening suffrage, limiting working hours, building up adequate public health systems, and so on. But now "reform" means precisely the opposite. It means dismantling public assets and loosening up the legislation that restricts capital in its dealings with labour, the state, and the environment.
Koizumi won a landslide in yesterday's Japanese general election, an election he called in order to consolidate his power after losing a vote to privatize the Japanese post office. The Japanese post office is the world's largest publicly owned savings bank. It's a win-win situation for the government and the people of Japan; people know that because it's backed by the government, they won't lose their savings. And the government has a huge pile of cash with which to finance public building projects: bridges, dams, and so on. These pieces of infrastructure are often described as "unnecessary", but they keep people working and serve communities on remote islands, and so on. As do small post offices which would no doubt be closed down under a privatised system. What Koizumi proposes would simply funnel a lot of the cash being used currently for public projects like bridges into the profits of private shareholders in banks. Why is that "reform"?
So Koizumi lost the vote to privatise the post office in parliament. He then called the election and purged the rebel MPs and is going to do it all again. Why did he win the election? Not because a massive majority of people want postal privatisation, but because he enlisted a bunch of celebrities to replace the excluded rebel MPs. And also because of a vague sense that "modernisation" and "reform" are necessary. But again, what does "reform" mean when it's just a question of syphoning cash out of the public realm into the private one?
Here's a right wing thinktank licking its chops over the prospect of privatisation and explaining exactly who it helps:
"If the Japanese public abandons the caution fostered by unlimited government guarantees and preferential tax treatment for PSS [Postal Savings Bank] deposits, and begins to invest their savings in private banks and other investment vehicles -- the country's economy will never be the same. Huge amounts of pent-up capital would then be moved into private financial markets. This would help to bolster not only Japan's incipient economic recovery but, over time, financial markets around the world."
People (especially people who've read Alex Kerr's book "Dogs and Demons" uncritically) sometimes call Japan a "construction state" and deplore the fact that 97% of all major rivers in Japan are dammed and 100% are lined with concrete, and that 55% of Japan's coastlines are covered in concrete laid down by government programs. Government programs which will cease if the Post Office Savings Bank is privatised. Kerr's arguments are mostly aesthetic; he thinks concrete reinforcements on coasts and rivers are ugly: "The gray concrete of the once-natural beach lines is punctuated by piles of countless concrete and iron tetrapods — four-legged anti-erosion barriers that look like large jacks and are often as large as bulldozers."
But death by drowning is ugly too, as we've seen in New Orleans. Our vision of a future which can only get more and more "liberalized" (in other words, capitalist) might be blocking our view of a future climatologists tell us is now increasingly certain: a future in which global warming causes sea levels to rise and weather patterns to become more extreme. I suspect the people of New Orleans would have been happy to have a bit more "ugly" concrete between them and the sea. Each year Japan is experiencing more and more devastating typhoons, which endanger life by depositing huge amounts of rainfall in very brief periods, making rivers burst their banks. Are the private banks who profit from post office privatisation going to construct barriers against that?
It's not just because I don't like it that I call Kerr's notion that concretisation programs are "unnecessary" completely outdated. Concretization gets ever more necessary with every typhoon. The irony is that the unrestrained economic activity Koizumi thinks is the inevitable future will contribute directly to the rising sea levels. So what we're "progressing" towards is precisely the kind of world where we'll need huge government spending on exactly the things Kerr and Koizumi deplore: massive publicly-funded concretization schemes.
Tell me if you agree or disagree with this statement: "Capitalism prefers instability to stability and cure to prevention. Rather than letting governments prevent disasters by programs of public works, capitalists would prefer disasters to happen periodically, claiming lives, and the survivors be compensated afterwards from insurance schemes... assuming they've signed up for them."
Neo-Marxist theorist Kojin Karatani once described the Japanese system as "capitalist communism". The thinktank I link above uses the word "conservative" to describe the same phenomenon (it also uses the term "retail investor" to describe what I would call a "citizen"):
"The typical Japanese retail investor remains conservative in their outlook. Many confuse investment and speculation and equate the stock market with a casino. As a result, they have preferred the security of guaranteed bank deposits and especially that of the Postal Savings System (PSS), even though this has resulted in annual interest rate returns of less than 1%."
Let's have that again in English:
"The typical Japanese citizen remains somewhat capitalist-communist in attitude. Many correctly realise that if they invest their money in the private banking system it will be used for speculation in that international casino, the stock market, rather than being spent on projects they can see and appreciate in Japan; bridges, dams, post offices near where they live, and so on. As a result they have preferred the security of guaranteed bank deposits and especially that of the Postal Savings System (PSS), even though this has resulted in annual interest rate returns of less than 1%."
Putting security over percentage interest return, putting public works over private profit, putting utility over capitalist "streamlining" and "synergies" (which call themselves "efficiency" without saying who they're efficient for), and thinking of the international capitalist system as a "casino", these are what make the Japanese "communist capitalists". And what Koizumi—caving in with admirable "resolution" to the demands of international capital markets—is doing is trying to make the Japanese "capitalist capitalists". Great, just what the world needs, more capitalism.
The thing we like, if we're quite a sizeable majority of the press covering the Japanese election yesterday and the reasons leading up to it, is capitalism. Free markets, the international flow of capital, that sort of thing. We love that stuff, and we can't get enough of it. We love it when a politician gets that religion, because it means he's going to start handing over power and money locked up in the public sector to our guys in the private sector. So we call him a "reformist" and a "liberaliser" rather than "a man in the public sector who seems to be cutting off his nose to spite his face by handing power over to the private sector". And because we like him, we portray the conservative party he's in as a radical and liberal party, and his holding onto power as a radical shift in power. Yes, the Japanese people are sick of things as they are, and have spoken up loudly for change! And so the LDP, which has been in power in Japan almost without interruption for the last several decades,
In the past, of course, "reform" used to mean curbing the excesses of capitalism; passing legislation that stopped people employing children in their factories, widening suffrage, limiting working hours, building up adequate public health systems, and so on. But now "reform" means precisely the opposite. It means dismantling public assets and loosening up the legislation that restricts capital in its dealings with labour, the state, and the environment.
Koizumi won a landslide in yesterday's Japanese general election, an election he called in order to consolidate his power after losing a vote to privatize the Japanese post office. The Japanese post office is the world's largest publicly owned savings bank. It's a win-win situation for the government and the people of Japan; people know that because it's backed by the government, they won't lose their savings. And the government has a huge pile of cash with which to finance public building projects: bridges, dams, and so on. These pieces of infrastructure are often described as "unnecessary", but they keep people working and serve communities on remote islands, and so on. As do small post offices which would no doubt be closed down under a privatised system. What Koizumi proposes would simply funnel a lot of the cash being used currently for public projects like bridges into the profits of private shareholders in banks. Why is that "reform"?
So Koizumi lost the vote to privatise the post office in parliament. He then called the election and purged the rebel MPs and is going to do it all again. Why did he win the election? Not because a massive majority of people want postal privatisation, but because he enlisted a bunch of celebrities to replace the excluded rebel MPs. And also because of a vague sense that "modernisation" and "reform" are necessary. But again, what does "reform" mean when it's just a question of syphoning cash out of the public realm into the private one?
Here's a right wing thinktank licking its chops over the prospect of privatisation and explaining exactly who it helps:
"If the Japanese public abandons the caution fostered by unlimited government guarantees and preferential tax treatment for PSS [Postal Savings Bank] deposits, and begins to invest their savings in private banks and other investment vehicles -- the country's economy will never be the same. Huge amounts of pent-up capital would then be moved into private financial markets. This would help to bolster not only Japan's incipient economic recovery but, over time, financial markets around the world."
People (especially people who've read Alex Kerr's book "Dogs and Demons" uncritically) sometimes call Japan a "construction state" and deplore the fact that 97% of all major rivers in Japan are dammed and 100% are lined with concrete, and that 55% of Japan's coastlines are covered in concrete laid down by government programs. Government programs which will cease if the Post Office Savings Bank is privatised. Kerr's arguments are mostly aesthetic; he thinks concrete reinforcements on coasts and rivers are ugly: "The gray concrete of the once-natural beach lines is punctuated by piles of countless concrete and iron tetrapods — four-legged anti-erosion barriers that look like large jacks and are often as large as bulldozers."
But death by drowning is ugly too, as we've seen in New Orleans. Our vision of a future which can only get more and more "liberalized" (in other words, capitalist) might be blocking our view of a future climatologists tell us is now increasingly certain: a future in which global warming causes sea levels to rise and weather patterns to become more extreme. I suspect the people of New Orleans would have been happy to have a bit more "ugly" concrete between them and the sea. Each year Japan is experiencing more and more devastating typhoons, which endanger life by depositing huge amounts of rainfall in very brief periods, making rivers burst their banks. Are the private banks who profit from post office privatisation going to construct barriers against that?
It's not just because I don't like it that I call Kerr's notion that concretisation programs are "unnecessary" completely outdated. Concretization gets ever more necessary with every typhoon. The irony is that the unrestrained economic activity Koizumi thinks is the inevitable future will contribute directly to the rising sea levels. So what we're "progressing" towards is precisely the kind of world where we'll need huge government spending on exactly the things Kerr and Koizumi deplore: massive publicly-funded concretization schemes.
Tell me if you agree or disagree with this statement: "Capitalism prefers instability to stability and cure to prevention. Rather than letting governments prevent disasters by programs of public works, capitalists would prefer disasters to happen periodically, claiming lives, and the survivors be compensated afterwards from insurance schemes... assuming they've signed up for them."
Neo-Marxist theorist Kojin Karatani once described the Japanese system as "capitalist communism". The thinktank I link above uses the word "conservative" to describe the same phenomenon (it also uses the term "retail investor" to describe what I would call a "citizen"):
"The typical Japanese retail investor remains conservative in their outlook. Many confuse investment and speculation and equate the stock market with a casino. As a result, they have preferred the security of guaranteed bank deposits and especially that of the Postal Savings System (PSS), even though this has resulted in annual interest rate returns of less than 1%."
Let's have that again in English:
"The typical Japanese citizen remains somewhat capitalist-communist in attitude. Many correctly realise that if they invest their money in the private banking system it will be used for speculation in that international casino, the stock market, rather than being spent on projects they can see and appreciate in Japan; bridges, dams, post offices near where they live, and so on. As a result they have preferred the security of guaranteed bank deposits and especially that of the Postal Savings System (PSS), even though this has resulted in annual interest rate returns of less than 1%."
Putting security over percentage interest return, putting public works over private profit, putting utility over capitalist "streamlining" and "synergies" (which call themselves "efficiency" without saying who they're efficient for), and thinking of the international capitalist system as a "casino", these are what make the Japanese "communist capitalists". And what Koizumi—caving in with admirable "resolution" to the demands of international capital markets—is doing is trying to make the Japanese "capitalist capitalists". Great, just what the world needs, more capitalism.
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Poor Momus, the voters have spoken but he knows better
Date: 2005-09-13 11:14 am (UTC)The voters chose and you didnt like it so you blame it on "capitalism". Is "capitalism" like that "not me" ghost in The Family Circle? Cry me a river Momus.
Are you capable of disproving the "construction state" theory? Ever spent much time in those small towns you seem to love so much that have become so dependant upon porkbarrel construction spending that no other local economies exist? Didn't think so. Try hanging out in some of these towns and see how dependance on the government teat has affected them. Talk to the people who remember how it was before (I assume Hisae will interpret for you).
Your lack of understanding of the proposed methods of privatization and the nature of the public finance sector here astound even me. As for the privatization plan, the LDP has no proposals to change the limit on individual account guarantees (the DPJ however suggested cutting the guarantees in half). It is still not clear that the "privatized" postal savings entity would be regulated as a private bank (it is currently under seperate regulation) nor does there seem to be any indication that there would be a change of strategy away from JGBs towards private sector financing (not that JGBs are without risk since Japan's soverign debt is not well rated at all).
Lets just look at personal savings. The article you quoted confuses the idea of investment and savings. Private banks personal savings are also guaranteed up to a certain level. The change in the level a few years ago actually had less to do with the government reducing its exposure to the risk of bank failure than with limiting fraudulent accounts and tax evasion (look it up for yourself). The very small increase on PSS accounts is only for long term deposits, and those accounts are timed to match the maturity of JGBs.
If you look at the history of retail banking in Japan you will see that it has never been about benifiting the customers. The major banks (and to a lesser degree the regional banks) have all been historically connected to specific industrial groups. The captive banks provided loans to group companies which were guaranteed by the deposits of group company employees. Since all the banks functioned this way there was no need to "compete" for customer accounts by offering different rates of interest. In most cases, individuals did not (and frequently still dont) have a choice as to which bank they use, its decided by the employer. In short the retail part existed only for the benifit of the employer not the employee.
From the banking side, the PSS functions quite similarly to the private banks. Both follow guidance from the government as to how loans should be made and where investments should be directed. Our 13 year recession is the result of that guidance. Both the construction contracts and the private sector corporate loans can be said to create jobs, but the real problem with both is the complete lack of transparency in both markets. The shame of the construction state is not the roads to nowhere or the concrete rivers or flood control (shame on you for comparing to the suffering of New Orleans), but the money which dissapears in the process into bribes, bid rigging and the underground economy. That money, spent by the state either directly or by means of guidance, belongs to the citizens and workers whose savings have been used to those ends.
Unlike the speculations in the article you linked to there is no reason to believe that individual savings, be they private or PSS, will unleash a tide of liquidity into the global markets. There is no past indication out of the public or private banking sector or any sign that such a flow of liquidity would be forthcoming. Additionally your alegations regarding Koizumi "caving ... to the demands of international capital markets" are nothing more than laughable unless you can cite evidence to the contrary.
OK with all that out of the way, let me compliment you on a fine piece of diversionary theater. It contained about as much fact as a comedy show on FOX and gave me at least as much laughter.
Regards,
Chris_B
Re: Poor Momus, the voters have spoken but he knows better
Date: 2005-09-13 02:23 pm (UTC)nate
Re: Poor Momus, the voters have spoken but he knows better
Date: 2005-09-13 11:00 pm (UTC)Re: Poor Momus, the voters have spoken but he knows better
Date: 2005-09-14 07:14 am (UTC)The "sourpuss Marxy crowd" has come here because Marxy is on vacation and not updating, so they can't rip into Japan. But actually, one thing they don't want to rip into, oddly, is the result of this Japanese election in which the conservatives won a mandate for "reform", ie opening Japan up more to private and international capital.
The scary thing is that I don't even think Chris realises that what he outlines above is a political position.
Re: Poor Momus, the voters have spoken but he knows better
Date: 2005-09-14 02:02 pm (UTC)I fact checked you, you dodged as usual. I didn't advocate a political position other than to state some realities about finance here. There is an parallel between last Sunday's election here and the last presidential election in the USA. In both cases the opposition party put up a number of potentially more effective measures but completely failed to sell them to the voters. In any case, since I dont have the right to vote here, I refuse to "rip into" the results of the election. The voters have made their chioces and I as immigrant labor can merely live with them.
Note that ome economists here are less than thrilled with the prospects of "privatization" (see http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?nb20050913a1.htm). Karel van Wolfren is less than thrilled at the prospects as well (http://joiwiki.ito.com/joiwiki/index.cgi?karel_van_wolferen_with_koizumi_at_the_theatre). In neither case is the prospect of "opening Japan up to more private and international capital" discussed as a related issue. Other than that one sad article you linked to, I ask you once again if you have anything to base that assertion on? Perhaps you've taken your cue from the Bush press team (or Koizumi for that matter) of repeating one message in the hopes that people will believe it?
Warmest Regards,
Chris_B