JAPAN'S DEPRESSION -- AN "UNWITTING" MISTAKE
The bourgeois press in Japan. continues to express worry over the country's economic depression and to seek for its causes, which. they find to be puzzling after the years of unprecedented boom and lush profits.
A good example is a series of articles which Professor Ryokichi Minobe of the Tokyo University of Education has begun in Bungei Shun jun, attempting an analysis . in depth. In the first article, appearing in the September issue, he offers some statistics that are not without interest:
“Japan's index of economic growth in 1963 was 325 against the 1950 standard of 100, far higher than those for West Germany, Italy and Austria, incidentally all vanquished nations, which exceeded the 200 mark in the world.
"As for the economic growth rate, its average for 1958~63 was 12.8 per cent for Japan, 6.3 per cent for Italy and 5 per cent or thereabouts for most of the nations in the West except the United States which registered 3.8 per cent, The average for 1950-63 was 16.1 per cent for Japan, 9.9 per cent for West Germany, 8 per cent for Italy, 7.2 per cent for Austria, 7.2 per cent for Switzerland.
“What crucifies the Japanese industry now is the heavy capital investment it has made. Its index in 1962 was 334 against the 1955 basis of 100, far more than Italy's 197, France's 181, West Germany's 169, England's 134 and the United States! 113. Japan now suffers from overequipment and an inflationary trend as a result.
"On the other hand, Japan's exports did not increase propor~ tionately. The export quantitative index for the entire world in 1963 was 247 against 100 in 1938, and 298 for Europe and 310 for North America, Lagging far behind, Japan's index in 1963 was 191 against the 1934-36 average of 100.
"Basically what supported Japan's economic growth was capital investment. As in advanced nations, capital investment has brought about an. inflation in Japan which has caused consumer prices to go increasingly higher.
"The consumer price indices in 1964 were 207 for France, 191 for Japan, 169 for England, 165 for Italy, 133 for West Germany and 129 for the United States, against 100 in 1959,
"Meanwhile, the domestic market has expanded primarily thanks to a rise in wages which was the highest in Japan of all nations, Real wages in 1963, however, were 147 for Japan, 242 for West Germany, 164 for France, 139 for the United States and 129 for England, all against the 1949 standard of 100." es
Trying to.interpret. these conclusions for. his. own readers, Chugo Koito offers the following in the September 12 Japan Times:
"Japan, once the boy wonder in the field of economic rehabilitation, now suffers under the stifling pressure of a depression, While it still manages to keep up its pace of growth, its industry is struggling desperately to get out of the worsening fix in which it finds itself,
"Why the struggle? The reason seems rather simple. In its frantic effort to catch up with advanced nations in technology and. productivity, the Japanese industry has committed a string of serious mistakes,
"For one thing, it unwittingly ignored the fundamental principle of economics -- demand and supply which never follows a set pattern of rise and fall. The cold fact is that the Japanese indus~ try has overequipped itself for its own good,'
These superficial observations boil down to little more than the statement that Japan's capitalists suddenly discovered that the country's productive capacity had expanded beyond the limits of the market. Unwitting or not, this periodic occurrence is one of the built-in features of the capitalist system -- and not only in Japan.
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