At the time capitalism came to pass, that is, I would say, after World War II, it started maturing and up to around 1960's, capitalism was a fully fledged young man, matured, sophisticated with more decency than cynicism. I call it Heroic Capitalism. It is Heroic Capitalism that constructed the framework of development in the 1970's where Japan was in its Showa golden years, the US was reborn after the Vietnam war, and Europe was having a rethink of socialism (whether it was a good cause). The power and confidence of this young man was bound to crush the ossified, moribund old man, who, having swallowed too much of the communist travesty, had his days counting. The Thatcher-Reagan offensive, a term I coined to refer to the way these hawkish conservatives chose on dealing with their supposed diabolic neighbour in the East, served, utmost, a catalyst but not a necessary condition. Totalitarian communism was too rotten to live on by the late 1980's.
Same as any other ideology or system of thought, Capitalism follows the same path as it grows old and gets lost on its origin, the heroism that dictates capitalism, not the other way round as many economists and apologetics of this cause had understood. I think, of course, with hindsight, this started when Thatcher and Reagan enticed the entire capitalistic world to follow the pattern of (simplistic speaking) Anglo-Saxon ideology (ASI). And ASI ruled the following decades successfully to the extent that as naive as many people of preceding eras, people began losing the alert that history changed. When they grew and expanded, one day they were bitten back by their own success. I Ching refers to this situation as the regretful dragon that goes overlimit, which happens after a prolonged period of booming and satisfying life.
I was (am still am) skeptical of the lasseiz faire advocates (those economic liberals, for example) who criticised Japan's interfering habits throughout the lost decades. Not long ago, I still heard them moaning on Japan's showering the economy with money, and not so long ago, these people turned mute because their very own governments had started pouring liquidity in the same way the Japanese did a decade ago. My view is, Japan's malice lay on the delayed diagnosis and treatment in the early 1990s and not the wrong treatment of quantitative easing. Japan raised interest rate too high but too late when the bubble became too large. It got a stroke and would never be recovered, from the perspective of Western economists. But some people such as the late Miyazawa and even myself beg to disagree, as no one should necessarily be required to see through the eyes of a Westerner and live according to the standard of the West. Somewhat Keynesian, Miyazawa died prematurely, in the late 1990's, to see if his postulation could work in a way, in the long run, better than Koizumi's ASI which, in the aftermath of the recent financial crisis, short-circuited the longest prospering period of Japan. Again, I shall not singularly point out that it is Koizumi's fault to follow a liberal view and act accordingly. Japan never buys into that. Still Japan had its own bubble in the expanding period in the first decade of the 21st century, but this time it was different.
The bubble burst is not easily seen in Japan. The bubble lay clandestinely in the swelling factories in different areas in nation. The GDP growth, though very mildly at 2-3% p.a., reflected the gradual expansion of production capacity built up to feed the world's devouring demand for goods (China and eventually the US). This is globalisation. We have reason to blame it. Liberals, a warhorse being The Economist, vigorously sell globalisation. The basic rationale of it I do not abhor. The Economist presumes it is Heroic Capitalism that pushes globalisation and the decent elements in the system would make globalisation a truly reliable and fair means to eradicate poverty and create value to the whole mankind. But the presumption becomes groundless empirically when we observe the capitalist societies around the globe. But with demand free-falling, does the Heroic Capitalism in Japan (I believe that Japan still has it) survive the torrent of darkness? In particular, the ASI in se has bad seeds and they now prevail at a rate unimaginable to those who naively believe in the capitalistic good. I believe in Japan's ethos that a corporation is not merely a profit-maximising entity but a social one that bears responsibilities not only for shareholders but for employees, which explains the life-long employment system that flourished in the Showa years. The greed and unceasing pursuit of interests and profits, those bad seeds, sour the whole fertile land of capitalism. As it grows old and frailty prevails, decency makes way for greed and excess. There should be two consequences - either a volatile, revolutionary scenario in which the diabolical capitalism is violently overturned or a more benign one in which the good elements among the bad seeds reinvigorated capitalism.
The bubble burst is not easily seen in Japan. The bubble lay clandestinely in the swelling factories in different areas in nation. The GDP growth, though very mildly at 2-3% p.a., reflected the gradual expansion of production capacity built up to feed the world's devouring demand for goods (China and eventually the US). This is globalisation. We have reason to blame it. Liberals, a warhorse being The Economist, vigorously sell globalisation. The basic rationale of it I do not abhor. The Economist presumes it is Heroic Capitalism that pushes globalisation and the decent elements in the system would make globalisation a truly reliable and fair means to eradicate poverty and create value to the whole mankind. But the presumption becomes groundless empirically when we observe the capitalist societies around the globe. But with demand free-falling, does the Heroic Capitalism in Japan (I believe that Japan still has it) survive the torrent of darkness? In particular, the ASI in se has bad seeds and they now prevail at a rate unimaginable to those who naively believe in the capitalistic good. I believe in Japan's ethos that a corporation is not merely a profit-maximising entity but a social one that bears responsibilities not only for shareholders but for employees, which explains the life-long employment system that flourished in the Showa years. The greed and unceasing pursuit of interests and profits, those bad seeds, sour the whole fertile land of capitalism. As it grows old and frailty prevails, decency makes way for greed and excess. There should be two consequences - either a volatile, revolutionary scenario in which the diabolical capitalism is violently overturned or a more benign one in which the good elements among the bad seeds reinvigorated capitalism.
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