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Neoliberalism and Japan

Neoliberalism and Japan. Neoliberalism Liberalism – Classical theory Adam Smith, market –self-regulating Milton Friedman, Chicago School – ‘hyper-market’ ideal Myth political regulation (law, contract, property) . Reagan, Thatcher – ‘Washington Consensus’

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Neoliberalism and Japan

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  1. Neoliberalism and Japan

  2. Neoliberalism • Liberalism – Classical theory • Adam Smith, market –self-regulating • Milton Friedman, Chicago School – ‘hyper-market’ ideal • Myth political regulation (law, contract, property)

  3. Reagan, Thatcher – ‘Washington Consensus’ • Privatization minkatsu , de-regulation kisei-kanwa , liberalization marketism shijo shugi • 1974 USA 1979 UK ‘Big Bang’ • All restrictions on capital controls removed • New financial instruments • Banking, insurance, stock trading companies, invest, compete • Economic globalization • New technologies of communication

  4. Japan – developmental state (govt. regulation, closed markets, trade protection, kereitsu cross share holdings seniority wage and promotion, lifetime employment) • Alternative form of capitalism • Different institutions • Commitment to public goods • Distribution – 90% middle class, narrowest gap between top and bottom groups among G-7 • Ideal of ‘sameness’ ? Paternalistic? Communitarian? • Is Japan too turning neoliberal?

  5. Year 2020 – watershed year in policy making • 1 in 4 Japanese will be 65 years old by 2020 • Population growth negative since w007 • Tax, welfare, and medical payments of the wage earner will triple by 2007.

  6. Social transformation underway • Meiji Ishin (make new) 1868 • 1946 Constitution • Heisei era (1989 – • 1991- bursting of the economic bubble • Unemployment 4.9% 1999 highest in post-war Japan • Suicide (1998 30,000 a year) men in their 40s and 50s 1/3 of suicides

  7. Hikikomori (drop outs/recluse/at home) • NEET (not in education, employment, or training) • Women • Irregular workers • Immigrants • Homelessness • Yoseba/ doyagai

  8. Japanese unemployment (5%) low by US and European standards • Lifetime employment eroding • 1997 32% of corporations declared commitment to continue life time employment, 26% in 1998. • Seniority-pay,promotion • Introduce contract, and individualized remuneration.

  9. Government spending (since 1991 invest sum in economy equivalent to rebuilding the city of Tokyo); high rate of indebtedness. • Japan economy ripe for change since 1970s • Trade deficits –USA • Plaza Accord 1985

  10. Deregulation and liberalization • finance, infrastructure, insurance, communication, land, housing, health and welfare, labor and education • Govt guaranteed all bank deposits – now plan to let uncompetitive banks fail • People swim at own risk • Education – Tokyo consider voucher system, • Meritocracy?

  11. Anglo Saxon capitalism (Ronald Dore) • More talk of change than actual change • Dismiss workers? • Legislative change

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