Japanese banking reconstruction

Charles Brown CharlesB at CNCL.ci.detroit.mi.us
Thu Jul 2 09:09:35 PDT 1998

Isn't this Japanese move sort of Keynesian ? Once again exposed is the Big Lie that the market is free of government, is more "efficient" without government regulation and control. It is an amazingly half-blind eyed look at economic history for bourgeois economic ideologists to claim that the market is not regularly, not continually, dependent on government action to correct crises., among other things,

To take the global boom of the last few years as proof that private enterprise ,"free" of government subsidy and management, is the triumphant efficient economic model ignores the long historical list of government bailouts of which the Japanese plan is just the latest.Did the capitalists save themselves from the collapse of the Great Depression ? Did Chrysler bail itself out ? Did the S and L's ? I know of these and others and I am only an amateur.

The anarchy of capitalist production requires government intervention systematically, fundamentally to save it periodically from its own messes. This is the half of the story left out in "bullish" enthusiasm and glorification of everything "private."

Lets be frank about the meaning of this GOVERNMENT plan for the current triumphal tone of "globalist " bourgeois ideological pronouncements.

Charles Brown

>>> Chris Burford <cburford at gn.apc.org> 07/02 2:29 AM >>>
I want to catch the moment, and ask for more informed comments, when Japan appears to have addressed the need a) to accept the destruction of large parts of its old capital and b) to use public finance to re-establish confidence in its banking system to allow trade to proceed.

The announcement, coincidentally on the first anniversary of the Asian financial crisis (the devaluation of the Thai bhat - sp?) is of a bridging bank. I submit the announcement can be analysed in marxist terms.

The BBC reports that the bridging bank will take over the responsibilities of a large number of banks that have failed (largely because of a fall in the capital value of property assets). The aim is to permit trading. If no commercial buyer is found within 2 years, they will be nationalised.

It is assumed that this project will cost large amounts of public money (presumably from taxes). This is not unusual in capitalist economies. Reference was made to the bank solvency crises in the USA in the 80's. Also to Finland where it required 17% of GDP to reorganise its banking system. It is implied that Japanese financial reconstruction will require a very substantial proportion of GDP.

The Communist Manifesto asks: "And how does the bourgeoisie get over these crises? On the one hand by the enforced destruction of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old ones."

That large parts of old Japanese capital have already been discounted is part of the destruction of a mass of the productive forces, together with unemployment, idle factories, unlet office blocks.

The phenomena also illustrate what I submit is implicit in the marxist analysis but to the best of my knowledge is more emphasised by green radical economists, that credit, - the sanction to issue credit - is a social phenomenon. It is socially sanctioned, approved and regulated. (As can be seen from the temples to capital that occupy prestigious sites in all cities - I mean the banks)

At crises we see that the society, under the control of the bourgeoisie, reorganises on a social level those institutions of credit. And what also underlies today's agenda, is the extent to which the capitalist governments of the world have been organising to press Japan to take such steps, probably with various hidden deals, pressures and inducements. Because while the west has benefitted so far from the Asian financial crisis, it is now poised to suffer if the world economy contracts.

Underneath the neo-liberal global agenda the capitalists know that capital may be privately owned, but in order for it to be privately owned, it must be socially controlled.

How long can they keep the secret quiet?

Chris Burford


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