ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Implosion of Japanese Capitalism

For nearly a decade now, Japan has been in the throes of a severe economic and political crisis. The dazzling growth of capitalism in Japan came to an abrupt end in the late 1980s when rising corporate debts and bankruptcies followed alongside overproduction and deflation. The crisis has given rise to a widespread cynicism among the public, who fear the prospect of rising unemployment and declining spend on social security.

In the immediate aftermath of the crumbling of the Nikkei 226 in February, finance minister Kiichi Miyazawa sobbingly proclaimed that “government finances were very close to collapsing”. It was the only truth that a government spokesman had ever uttered in their interminable years of unaccountable power. It was an historic statement; premonitory not only of the approaching financial debacle and engulfing economic firestorm; but also an indirect condemnation of an irrevocably decadent political system incarnated in the LDP; a swindle-ridden caste of political hustlers that dominated the island kingdom over the last four and half decades. A sewer needs no publicity, and it might be added that as the creation of the American occupation, the LDP proved itself to be one of the most faithful and obsequious domestics of US imperialism.

A cursory overview of certain select indicators gives us an understanding of the depth of an irreversible crisis of Japanese capitalism. The economic stagnation and political paralysis, a characteristic of the past decade, is worsening by the day. The symptoms of the economic implosion are omnipresent: a gyrating stock market, a banking system that does not have the money to write off bad loans, an overvalued enfeebled currency, mounting commercial and industrial bankruptcies, tumbling exports, rising waves of official unemployment already hitting 5 per cent, numbers that do not include short time working that has grown staggeringly over the last three years; a fiscal deficit that exploded between 1991 and 2000 from a surplus of 3 per cent of GDP to around a current deficit of 7 per cent. A public debt that keeps on escalating, bouncing from 55 per cent of GDP a decade ago to 130 per cent at present.

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