PEN-L message, Re: No Way Out for Japan?

a comment on Burford's post --

In my opinion, Japan's problems are not only Japan's problems but a world system problem. I look at this in a global-Keynesian kind of way. The capitalist world system tends to generate more supply than demand. There is not enough global effective demand in the world system. (Similar, Ernest Mandel)One of the "unimaginable" things that one might want to do is: do what Fidel Castro wants - namely, send 1 trillion US dollars per year to the Second and Third World for real investment in sustainable global development. (Instead of fixing the Japanese with Chinese aggregate demand, as you hint, fix it - and other economies - with global effective demand.) One third of that to be financed out of Tobin taxes. One third out of new SDRs. One third out of reversing unequal exchange (exchange rate reform). Or by other financing methods. 1 trillion USD is only about 3% of global GDP. This approach would benefit workers in poor and rich countries. That is something that the "multitude" (Hardt-Negri) should demand from the "empire" (Hardt-Negri) and its "colonial offices/offices for native affairs" (IMF/World Bank) along with a general abolition of "global apartheid". (This line of reasoning is based, as I said, on the view that Japan's problems are not only Japan's problems.)

Gernot Köhler

Oakville, Canada

. . . in reply to:

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                          No Way Out for Japan?
                             by Chris Burford
                        09 September 2001 13:57 UTC

The Guardian summarises the bleak prospect for Japan's impending recession.

It reports Japan has the worlds biggest public debt. Is that likely to be
in absolute figures, or at 130% of GDP is the relative figure the relevant one?

With US consumption hovering to contract, the recession in Japan could be
severe.

One initiative is a proposal for the construction of 10,000 care centres
for the elderly, of which there is a shortage. This would create 15,000
jobs. The project is to be part financed by loans to be paid off over 20
years by user fees.

This could be consistent broadly with a marxist approach of putting the
emphasis on living labour rather than dead labour - ie capital.

But what is the essence of the problem for the government in cutting public
debt from 130% of GDP notionally to say 60%? (Does that state the overall
problem correctly? - I am not clear whether investment in stocks have
already been substantially depreciated)

Presumably much mystification and juggling of figures is essential to
fulfil what is essentially a psycho-social task - how to kill off large
quantities of old capital without destroying confidence in making continual
investments which would cause a crisis of circulation of the *current*
products of living labour. But the mystification makes it difficult for the
capitalists to agree who should bear the worst burden.

What do the Japanese need - hyperinflation? a bloody revolution?
socialisation of the bankrupt banks?

massive IMF credits to China to create a much enlarged mass market for its
products?
(Taiwan is just slipping into China's economic orbit. Why not Japan?)

After all, it may be better for the leaders of Japanese and global
capitalism to focus on the unimaginable sooner rather than later. Perhaps
we can help them with their options appraisals.

Chris Burford