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Andrew Glyn

Japan – Facing Instability

As Recession grips, the miracle fades

(November 1979)

From Militant, No. 480, 23 November 1979, pp. 10–11.
Transcribed by Iain Dalton.
Marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

For Japan’s Prime Minister Ohira, and his cronies in the ruling [and mis-named] Liberal Democratic Party, this autumn seemed the ideal time for a general election.

The Japanese economy, geared to investing for ‘high-speed growth’, suffered a bigger decline than any other major capitalist country in the 1974–75 recession. Rapid inflation, the end of the ‘economic miracle’ and a particularly damaging scandal cost the LDP the absolute majority in the Diet [Parliament] in 1976, though they have had few problems subsequently in getting the support of the minor parties.

Since then an intensive export drive, together with Keynesian policies of expansion by the government, have generated a modest upswing with growth at 5–6% a year; inflation has eased from more than 20% to around 3%.

What made this October especially suitable was that the relatively favourable economic situation will not last. The recent fall in the value of the Yen, together with oil price increases, have recently pushed wholesale prices up to a rate of 10% a year; this will soon show up in faster price rises in the shops.

Faced with a government deficit which has been running at about 4–5% of GNP, the big capitalists’ have declared a virtual ‘financing strike’, demanding that the deficit be cut to make way for financing their own investment. Ohira himself favoured the introduction of a consumption tax which would raise prices, and cut workers’ spending power by 3%.

The budget has been pruned to prevent real increases in spending. Monetary policy has been tightened with interest rates pushed up by the Bank of Japan. The prospects for export have deteriorated with the slowdown, and possible fall, in world trade.

All this adds up to the prospect of a renewed bout of stagnation in the Japanese economy; no wonder Ohira decided to strike while the iron was hot.

In view of these relatively favourable circumstances, the fact that the LDP actually lost a seat was labelled as a ‘catastrophe’ by the press. In fact overconfidence, and factional rivalry led to the LDP standing more candidates in the multi-member constituencies, so splitting the vote.

But even their 20% recovery in their share of the poll is less impressive than it looks as much of it was gained at the expense of the ‘independents’, who are mainly loyal LDP hacks who have been disgraced in some scandal and who are tactfully left off the LDP ticket.

The press has blamed the failure of the LDP to improve their position on Ohira’s gaffe early in the campaign when he more or less admitted he would introduce the consumption tax. But in reality such a tax would underline the fact that the recovery has been at the expense of the working class.

Productivity has increased very sharply since 1975 – by 27% between 1975 and 1978 in manufacturing industry as a whole; by 61% in electrical engineering for example. This increase in productivity has not been the result mainly of investment in new technology.

Capital accumulated is in fact only running at half the rate of the boom years of the late sixties. Rather the Japanese capitalists, especially in the major export industries and firms, have carried out a savage process of rationalisation.

Between 1974 and 1978 Mitsubishi Heavy Industries cut employment by nearly 12,000 (15%), Hitachi by 10,000 (12%), Toyota by 7,000 (20%), Toyo Spinning by 7,000 (30%). Taking all the manufacturing firms employing more than 1,000 workers, the average cut in employment was 10% between 1974 and 1977.

Older workers have been especially hit because they cost more – in the big firms workers aged 50–55 are paid double the wages of 20–25 year olds. Unemployment amongst the older age groups has doubled since 1973; young workers, because of their cheapness can more easily get a job – for a time. More and more workers are taken on a temporary rather than ‘regular’ basis. They are paid as little as a third of the regular rate.

Women workers, typically paid two-thirds of the male rate, have been taken on in huge numbers. More and more male workers have been forced to attempt to scratch a living by becoming self-employed, particularly in the service industries, or by getting a worse paid job in the small scale firms.

Japanese workers work long hours – an average of four hours a week more than German workers (taking account of fewer holidays); less than a quarter of them work a five day week. Their real wages have risen by only 2–3% a year in the last few years, far slower than productivity.

A recent comparison of the purchasing power of wages in Japan put them at about half those of the USA and under two-thirds of the rate in Germany. Japanese workers are famous for their high savings – the average workers’ family saves around one-fifth of their income.

These have been savagely eroded by inflation. They are forced to save so much for old age (pensions are around £8 a week), for education (a family with one child in primary school and another in secondary school will be paying at least £300 a year), for medical expenses (most beds in the big university attached hospitals require steep extra charges not covered by insurance and these can mount up to several hundred pounds) and most importantly to try and buy a house.

Against this background the real question has to be, not why the LDP did a bit better or a bit worse at this or that election, but, how have they maintained their unbroken reign of more than 30 years? The rural social basis of the LDP has been eroded by the massive wave of industrialisation and urbanisation.

Between 1955 and 1975 the proportion of the rural population living in rural areas fell from 40% to 12%, whilst the LDP’s share of the vote declined from nearly 60% to less than 45%. The LDP keeps this rural vote loyal by generous support to rice farmers, leaving the industrial workers to buy rice at way over the market rate.

Moreover, the leverage of the rice subsidy is much greater than it appears for many industrial workers commute from the countryside whilst one member of the family tills the land; others leave the country intending to return to the land at some later stage. Very few farming families have sold their plots.

The election boundaries based on 1940s’ population figures, also hugely favour the LDP which gets many more seats than their share of the votes justifies. In 1976 an LDP candidate was elected with 37,000 votes in a rural area whilst a Communist was defeated with 147,000 votes in an urban seat.

Bribing of the electorate is also carried out in quite blatant ways. Although campaign spending is legally restricted to £30,000 a candidate nobody pays attention to the rules. The Japan Times (August 11) reported that “an estimate currently circulating in LDP quarters is that a Diet seat might cost as much as 200 million Yen” (£400,000).

“A candidate with £100,000 to spend won’t stand a chance.” As well as being used for free meals and other benefits for supporters, outright bribery is common. The Financial Times reported that “It is an open secret that in one Tokyo suburban constituency votes are ‘worth’ about 5,000 Yen (£10) apiece.”

Many constituencies are handed down from father to son like ‘rotten boroughs’ in Britain at the beginning of the last century. At this election more than 100 LDP candidates were sons, nephews etc. of former Diet members.

The politicians get the money from big business of course. The methodical drafters of the election law have even imposed a means test for the capitalist – there is a sliding scale of maximum permitted donations increasing with the size of the firm and with a maximum for the biggest firms of 150 million Yen (around £100,000)!

But as one LDP official told the Japan Times: “We can even solicit campaign funds from companies affiliated with the big corporations as well as personal contributions from the business bosses.”

Sometimes, of course, the payments require very specific services to be rendered by the politicians concerned. Summarising the case of former Prime Minister Tanaka, charged with taking a million pound bribe to make sure that All Nippon Airways bought the Lockheed Tri-Star the Japan Times said: “there seems to be little dispute about the transfer of cash – prepared by Lockheed’s Japan office, transported in a Marubeni car (the trading firm acting as go-between), transferred to the trunk of a car driven by Tanaka’s chauffeur (who committed suicide after giving details to the prosecution), received by Tanaka’s secretary and placed in Tanaka’s mansion” (August 11).

One Marubeni executive described how his boss came out of the meeting with Tanaka and simply showed him the five fingers of his hand, saying ‘this is it’!

The Japan Times reported:

“Recent revelations concerning the Defence Agency’s purchase of the F-4E fighter have suggested that 500 million Yen was standard figure as a bribe for fixing a deal of this kind. It was the same amount that Nissho-Awai (another trading company) had given Raizo Matsuno, a former Minister of Defence, for presumably facilitating the government purchases of the US-made military aircraft.”
 

‘Centre’ Parties

Tanaka but not Matsuno was a successful candidate in the election. Neither stood as official LDP candidates, but as “Independents” who, of course, co-operate 100% with the LDP. Tanaka, in fact, is still the boss of one of the strongest LDP factions, and the power behind Ohira.

Another argument for an October election was that further revelations in the Tanaka trial might be even more embarrassing.

The ruling class also makes use of the ‘centre parties’ to maintain the LDP in power. Nearly half the voters live in the three major urban areas around Tokyo, Osaka and Nagoya. There the LDP gets less than a third of the vote. While the right-wing candidates swept the board in the April elections, this was the result of the LDP supporting ‘moderate’ candidates which were also backed by the right-wing Democratic Socialists and the Komeito (the Buddhist ‘clean government’ party supported by a section of the petty bourgeois and most oppressed layers of the population).

These parties have seen that, with the workers’ parties floundering, their best chance of sharing in the spoils of office is to act as the urban prop of the LDP.

The leadership of the unions helps the ruling class immeasurably in its task of ensuring the burdens of the economic crisis fall on the workers.

Large scale industry is quite extensively unionised. Two-thirds of workers in firms employing more than 500 workers are in unions while one-third of all employed are unionised. These unions operate on an ‘enterprise’ basis, covering just one firm and excluding the miserably-paid temporary employees because they are not ‘regular employees’.

But many really are company unions, in the sense of tools of the management. In Nissan (Datsun) for example, the industrial relations department and the trade union, together, form one well-trodden promotion system. A worker will be promoted from full-time trade union work into the industrial relations department.

This is not unknown in Britain, of course, but in Japan he may well move back to the union on a further promotion.

Next week Andrew Glyn explains the character of trade unions, the position of the workers’ parties, and looks at prospects for the working class in Japan.

 
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