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Nigel Harris

Conqueror or conquered?

(November 1986)

From Socialist Worker Review, No.92, November 1986, p.8.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

PRIME MINISTER Nakasone made some idiotic comments last month about how inferior the level of intelligence is in the United States because of America’s black, Puerto Rican and Mexican inhabitants. It illustrates yet again, despite the fabulous material and technical advances of Japanese capitalism, the backwardness of Japan’s ruling class.

Its racialism could get temporarily hysterical as Japan is drawn increasingly into the world system as the condition of the future power of its rulers; kaikoku (the internationalisation of Japan) is inevitable, despite all the kicking and screaming of Nakasone.

Integration is happening very quickly. The yen has increased in value remarkably – last October one US dollar purchased 214 yen, this May only 168. There has been mild panic in Tokyo as imports cheapen and exports grow increasingly expensive. Despite all the self-interested squeals of Western business, imports are growing.

And in the export trade Japan’s power is being dented. One estimate has it that profits on Japanese exports are expected to decline by 30 percent this year.

Shipping and shipbuilding have been particularly hard hit – to the advantage of South Korea and other shipmakers in Newly Industrialising Countries. By August the estimated fall in the value of Japanese car exports to North America was put at £6.25 billions – or more than the combined profits of all Japanese car companies in 1985.

The problem is not simply the increase in Japanese export prices, but also the domestic effects of a rising yen. At the exchange rates of mid 1986 the wages of Japanese steel workers were approaching 20 dollars per hour (or about £13), or roughly the same as US levels (where the steel industry is crippled and contracting).

As a result Japanese companies are following their competitors overseas to find cheaper labour – and doing so when a high value yen makes it particularly cheap to buy or create assets outside Japan. In steel, Kawasaki is now importing a major part of its sales from its Brazilian affiliate and considering the closure of one of its two integrated steel works in Japan.

Matsushita’s current plan aims to increase overseas production from 14 to 25 percent of its world output.

Sony aims to double its overseas production in three years.

For many other Japanese companies in electronic consumer goods the favoured locations are Korea and Malaysia, but utilising some components from the United States and France.

The front runners pull their suppliers with them. As Japanese vehicle producers expand output in the United States – US-based production of Japanese car companies is expected to reach 2 million vehicles in 1987, compared to US imports of Japan-manufactured cars of 2.3 million – Japanese component manufacturers are obliged to follow their buyers to the United States.

To compete with Japanese-made cars their US rivals are obliged to patronise the same component makers. Hitherto this has meant increased imports to the US, or it did before the yen began its steep climb. The value of imported car components in the United States increased from 480 million to 2.8 billion dollars between 1980 and 1985.

As US car companies have been busy developing joint ventures with their Japanese rivals, so the same links have been fostered with component makers – in companies like General Motors – NHK Spring, Delco Moraine etc.

The global spread of manufacturing capacity of Japanese capital and its increasing intermixture with non-Japanese capital is only a small part of the process of the internationalisation of Japanese capital.

Japan’s rulers have an abundance of capital seeking profitable outlets in conditions where investment in Japan is becoming relatively unprofitable (at least in comparison with the past), and in conditions where the value of the yen makes capital exports cheap. This is the background to Japan emerging as the largest overseas investor in the world, and the largest lender to the United States.

Japanese banks are poised to overtake the value of assets of British banks in Britain, and the Tokyo Stock Exchange has become the third leg of the tripod of global finance: New York-London-Tokyo.

Yet all this hardly affects Japanese society itself. It can still be seen as Japan conquering the world and putting down the dirty foreigners – not as the world market conquering Japan.

The second process is coming in a different form – the tiny first indications of the internationalisation of the Japanese labour force. The big Japanese companies can shift production capacity abroad as the dollar value of Japanese wages rises, but the enormous mass of little companies, the sweated trades and dirty jobs cannot. You cannot clear Tokyo’s garbage in Seoul or Kuala Lumpur.

Some of the first segments of the domestic labour market to be affected have been – as in the United States and Europe – restaurants, bars, construction and farming. Barmaiding and prostitution are now said to be dominated by the Japayuki-san women from south east Asia. They enter Japan on short-stay visas provided by the underworld and then stay on at pittance wages. Japanese farmers – with their tiny farm plots – are legally importing Filipina girls to marry and set to the farm work Japanese women are no longer willing to undertake.

Illegal male workers, mainly from south east Asia but also from Pakistan and Sri Lanka, do the dirty jobs in restaurants (dish washing etc.) and on building sites. Higher up the scale, doctors from Taiwan and South Korea are said to practise illegally. An unofficial estimate puts total illegal immigration at over 100,000 per year.

Thus, as happened in Europe in the 1960s, the pace of growth is drawing the more highly skilled Japanese worker into higher occupations, leaving sectors where conditions and wages are so poor there is an inadequate supply of native labour to man them.

The problem is made worse insofar as the Japanese birth rate is low and skill acquisition takes longer and longer.

In conditions of high growth a contracting available labour force could produce a wild labour scarcity and soaring wages – and still fail to man sectors of the economy except at prohibitive costs.

Thus internationalisation of the labour force could be the only way to prevent the Japanese working class “holding the country to ransom” and to ensure the continued world position of the Japanese ruling class.

Officially, the government is still committed to the defence of the “racial purity” of the Japanese, and forbids the admission of foreign workers.

But there are strong arguments within the ruling class calling for kaikoku as the condition for the survival and growth in power of the Japanese ruling class.

What is remarkable about the process is how fast it has come. What took decades in Europe and North America has arrived – like the startling economic transformation of Japan itself – with breathtaking speed. And the main direction is all to the good. Increasingly Japanese capital will lose its national specificity, becoming indistinguishable from a non-national global capital. That will assist the process of the integration of the Japanese working class into the world and weaken the appalling hold of nationalism on workers. Then Nakasone’s ignorant blathering will be greeted in Japan with the derision it deserves.

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Last updated: 10 April 2010