Download (555Kb)
Total Page:16
File Type:pdf, Size:1020Kb
Manuscript version: Author’s Accepted Manuscript The version presented in WRAP is the author’s accepted manuscript and may differ from the published version or Version of Record. Persistent WRAP URL: http://wrap.warwick.ac.uk/112791 How to cite: Please refer to published version for the most recent bibliographic citation information. If a published version is known of, the repository item page linked to above, will contain details on accessing it. Copyright and reuse: The Warwick Research Archive Portal (WRAP) makes this work by researchers of the University of Warwick available open access under the following conditions. Copyright © and all moral rights to the version of the paper presented here belong to the individual author(s) and/or other copyright owners. To the extent reasonable and practicable the material made available in WRAP has been checked for eligibility before being made available. Copies of full items can be used for personal research or study, educational, or not-for-profit purposes without prior permission or charge. Provided that the authors, title and full bibliographic details are credited, a hyperlink and/or URL is given for the original metadata page and the content is not changed in any way. Publisher’s statement: Please refer to the repository item page, publisher’s statement section, for further information. For more information, please contact the WRAP Team at: [email protected]. warwick.ac.uk/lib-publications Page 1 of 40 The Pacific Review 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Industrial Associations as Ideational Platforms: 17 18 For Peer Review Only 19 20 Why Japan Resisted American-Style 21 22 23 24 Shareholder Capitalism 25 26 27 28 29 30 31 32 33 34 35 36 37 Fumihito Gotoh 38 39 40 [email protected] 41 42 +44 (0)1926 713697 43 44 45 Department of Politics and International Studies, University of Warwick, 46 47 48 Coventry, CV4 7AL, United Kingdom 49 50 51 52 53 54 55 56 57 58 59 60 URL: http://mc.manuscriptcentral.com/rpre Email: [email protected] The Pacific Review Page 2 of 40 1 2 3 Introduction 4 5 6 7 Japan’s stakeholder capitalism, which emphasises employment stability (long-term or ‘lifetime 8 9 employment’ for regular workers), has been in dire straits since the mid-1990s. Hatarakikata 10 11 Kaikaku or ‘labour reforms’, which tackle three labour issues – excessively long working hours, 12 13 14 significant wage and treatment disparities between regular and non-regular workers, and labour 15 16 shortages – have been a major policy agenda for Japan’s Abe administration since August 2016. 17 For Peer Review Only 18 The number of non-regular workers (low-waged, easily dischargeable labour) doubled from 19 20 9.7 million in 1994 to 20.4 million in 2017, while regular workers decreased from 38.1 million 21 22 23 to 34.2 million. Consequently, according to the Comprehensive Survey of Living Conditions 24 25 by the Ministry of Health, Labour and Welfare (MHLW), the average household income in 26 27 Japan fell from ¥6.64 million in 1994 to ¥5.60 million in 2016, which epitomises the ‘lost two 28 29 30 decades’. 31 32 33 Many scholars (for instance, Imai 2011; Watanabe 2012; Shibata 2015) claim that 34 35 deregulation or neoliberal reform of the Japanese labour market has caused these phenomena. 36 37 Some scholars (Okada 2009; Hasegawa 2011) further argue that neoliberal reform has been 38 39 40 driven by Nippon Keidanren (the Japan Business Federation, hereafter Keidanren), the largest 41 42 industrial association (business lobbying group) in Japan. In contrast, other scholars (Keizer 43 44 2010; Yun 2015) claim that Keidanren has continuously supported the practice of lifetime 45 46 employment but used a low-waged non-regular workforce in order to reduce personnel costs 47 48 49 and protect existing regular workers. I share the latter perspective and contend that most 50 51 scholars have failed to indicate that from the mid-1990s until the mid-2000s, neoliberal thought 52 53 was promoted by Keizai Doyukai (the Japan Association of Corporate Executives, hereafter 54 55 56 Doyukai), another major industrial association, but that Japanese society has resisted 57 58 neoliberalism, an ideology that emphasises market efficiency and economic liberalisation. My 59 60 research puzzle here is why Japan has resisted American neoliberal hegemony, which advances 1 URL: http://mc.manuscriptcentral.com/rpre Email: [email protected] Page 3 of 40 The Pacific Review 1 2 3 the convergence to American-style shareholder capitalism promoting higher international 4 5 6 capital mobility and capital markets, and how the resistance has resulted in the rapid increase 7 8 in the working poor. This article focuses on the conflict between Japanese-style stakeholder 9 10 capitalism and American-style shareholder capitalism, which are based on different social 11 12 norms, in the Japanese political economy since the 1990s. 13 14 15 The combination of liberal international trade and restricted international capital mobility 16 17 18 during the Cold WarFor was conducivePeer for Review Japanese-style stakeholder Only capitalism based on the 19 20 combination of the economic bureaucracy’s administrative guidance (non-legally binding but 21 22 highly influential recommendation), long-term focused corporate management, committed 23 24 25 labour, patient capital and keiretsu (interlocking business relations), often described as ‘convoy 26 27 capitalism’. As Japan was a bulwark against communism, the United States provided Japan 28 29 with extensive support, including accommodative trade policy, the dollar-yen exchange rate 30 31 32 very favourable for Japanese exporters (US$1 = ¥360) and generous technology transfer. 33 34 However, Japan’s strategic importance for the United States was lessened, and the United 35 36 States increasingly showed less tolerance towards the closed nature of the Japanese market in 37 38 the 1980s. Since then, neoliberalism led by the United States has been an external pressure on 39 40 41 Japan to change its form of capitalism. In the 1990s, Japanese-style stakeholder capitalism 42 43 faced significant adversity, such as the enormous bad debt problem, the economic slump and 44 45 the Ministry of Finance (MOF) wining and dining scandals.1 An increasing number of market 46 47 48 liberals in the parliament, bureaucracy, and business community tried to transform the Japanese 49 50 economic system by introducing American-style financial and business practices under the 51 52 Hashimoto (1996-8) and Koizumi (2001-6) administrations. 53 54 55 However, Japan has resisted neoliberalism, which legitimises shareholder primacy, and the 56 57 58 influence of market liberals in Japan has weakened since 2006. Neoliberalism advocates free 59 60 capital mobility between sectors, regions and countries, which suggests the restoration of 2 URL: http://mc.manuscriptcentral.com/rpre Email: [email protected] The Pacific Review Page 4 of 40 1 2 3 dominance by narrowly defined capitalists, such as major shareholders (Harvey 2005). One 4 5 6 salient example of Japan’s resistance to market liberalization is the stalled financial 7 8 disintermediation (i.e. the shift from a bank-cantered to market-based financial system) since 9 10 the mid-2000s, despite the Japanese government’s financial deregulation during the 1980s and 11 12 1990s. Ikeo (2003: 92-5) claims that a market-centred financial system is more efficient than a 13 14 15 bank-centred financial system when the economy requires a drastic shift from low growth to 16 17 high growth industries. However, the outstanding Japanese domestic corporate bonds 18 For Peer Review Only 19 moderately decreased from 62 trillion yen in 2000 to 60 trillion yen (11% of GDP) in 2016 – 20 21 22 dwarfed by bank loans for companies (roughly 400 trillion yen) – when the US proportion of 23 24 outstanding corporate bonds to GDP was 45%. Another example is the very low proportion of 25 26 Japan’s outstanding inward foreign direct investment (FDI) to GDP (3.8% at the end of 2016), 27 28 29 which is much smaller than those of the United States, Britain, China, and South Korea at 30 31 35.2%, 55.7%, 24.5%, and 12.4%, respectively. In contrast, FDI in China has significantly 32 33 contributed to its rapid economic growth. Due partly to US pressure, since the 1980s the 34 35 Japanese government has campaigned to increase inward FDI, but the increase has been only 36 37 38 incremental. Japan’s slow industrial upgrading due to the constrained capital mobility, its 39 40 intense international competition in the manufacturing sector with emerging economies, and 41 42 the rapid appreciation of the yen (US$1 plummeting from ¥249 in June 1985 to ¥85 in June 43 44 45 1995) have resulted in a serious strain on its labour market. 46 47 48 I utilise the concept of systemic support, which has enabled Japanese society’s anti-liberal, 49 50 anti-free market norms to resist American-style shareholder capitalism, as a solution to the 51 52 research puzzle (Gotoh and Sinclair 2017). Since the mid-1990s, there has been an ideational 53 54 55 conflict among Japanese elites between the anti-free market and market liberalisation camps. I 56 57 particularly focus on the ideational contestation between the two major industrial associations, 58 59 the largest, conservative Keidanren and the neoliberal-oriented Doyukai, as key ‘ideational 60 3 URL: http://mc.manuscriptcentral.com/rpre Email: [email protected] Page 5 of 40 The Pacific Review 1 2 3 platforms’ of the respective camps. The anti-free market camp has endeavoured to preserve 4 5 6 stakeholder capitalism, including job security of regular workers, whilst the market 7 8 liberalisation camp has tried to enhance return on capital through neoliberal restructuring.