Mapping Japan’s Role in East Asia: Finance

Abstract

In the modern world, production is a function of credit and vice versa. Without credit, large-scale industrial production is not possible whilst, conversely, production generates new sources of credit.¹ The formative structure and shape of Japan’s huge productive capacity was designed and set in place by a triumvirate made up of government, bureaucracy and big business working more or less in tandem, as noted in earlier chapters.² Throughout Japanese history, by and large, it was the bureaucracy that came up with the plans and big business that executed them. However, none of this would have been possible without the political and financial backing of the government that took from one segment of the country (broadly, by levying heavy taxes on the rural population and granting labour only a small share in national income) and gave to another, mostly in the belief that the country as a whole would benefit.³ A similar emphasis obtained after the Second World War, as Japan sought to rebuild and ‘catch up’ with the western industrial powers once more.⁴ Again, big business received all the help it needed, while the bulk of the population paid the price in low wage rates in comparison with their relatively high productivity, poor housing and living standards generally, a poisoned environment and so on.⁵ An analysis of Japan’s productive capacity then, cannot be divorced from the social costs that come with it and these costs are imposed, in part, by the priorities of the Japanese government.