Group of International Communists (Holland)

The Bases of Japanese Imperialism


Published: in International Council Correspondence Vol. 1, no.7, April 1935, pp 1-7. Translated from Rätekorrespondenz.
Source: Antonie Pannekoek Archives
Transcribed: by Graham Dyer


The Declaration of War on European Capital

A short while ago there appeared in Italy a brochure giving a resume of a large number of articles from the largest Japanese daily, The Osaka Mainichi and the Tokio Nichi. In it we find the following:

“You Europeans, and especially you Englishmen, have made it nice for yourselves, following the great industrial development at the end of the preceding and beginning of the present century; you have raised the standard of living and have counted upon the world export-trade as upon an eternal right. The world does not, however, stand still, nor does it wait on you if you fail to keep pace with the times. We do not hesitate to affirm that the English and, in general, the European textile industry is being beaten every day by that of Japan, because you have forgotten that the whole basis of trade consists in selling at low prices. The purchasing power of most of the countries with which you do business is rather slight, and for that reason we maintain that the Japanese design of selling their commodities at the lowest prices - regarded from the general human point of view - is more beneficial than your tendency to stick to high prices.

“You Englishmen and Europeans think of your earnings and the high standard of living of your workers; we think of the necessity of finding work for our workers and of the vital need on the part of the millions of Asians, Africans, South Americans - our customers - who lead a more than modest existence. If Japan can sell these peoples a fabric at two cents a yard, why should they pay the Europeans four or six?”

These are the words of Japanese capital, grown power-conscious and engaged in defeating western capitalism with its own logic. With the same logic and the same humanitarian phrases, European capital once destroyed European handicraft, as it also later seized the markets of backward countries and imposed its economic methods upon Asia. Today it raises against the force created by it the same wishy-washy phrases of an economically surpassed petty-bourgeois morality with which the expiring handicraftsmen sought to defend themselves against its competition. The modern and more efficient capital of the East, with self-conscious brutality, declared war on European capitalism, its creator. And this declaration of war is clearer than all the utterances of the imperialistic warriors of the Japanese General Staff. In its spirit will Japanese capital not only fight; it will defeat with that spirit the dilapidated capitalism of Europe in the field of international economy.


The Technical Preconditions of Japanese Expansion

The European bourgeoisie points bitterly and with fear to the “dumping” on the part of the Japanese exporters. With what justification remains to determine.

It must be emphasized in the first place, that the question as to the strength of Japanese exports is not answered with general phrases about dumping. That is to say, it is quite incontestable that Japanese capitalism has a technical equipment which is far superior to that of Europe. This holds above all, of the textile industry. It is true that the costs of setting up a textile factory in Eastern Asia are four times as high as in England, but on the other hand, Japan practices a much more intense utilization of her machinery. The highly modern Japanese textile machines regularly run in two shifts of 8½ hours each, and at highest speed. A ten year-old Japanese textile machine has worked an average of 62,000 hours, while a similar English machine has been put to use only an average of 24,000 hours. The average number of labor hours per week is reported (1932) as 100 for Japan, as against 40 in Europe.

The intensity of the machine labor hour in Japan is greater than in England. Thus a Japanese spindle turns out in 48 hours an average of 42 lbs. of thread No. 40; an English spindle only 36 lbs. Japan, with eight million spindles, attains almost the output of the English textile industry with 50 million spindles.

The tempo of labor rationalization is so high in Japan that in spite of the increasing productivity the number of workers has remained practically stationary at 4.8 millions the last ten years. While in 1929 10,000 spindles were served by 285 workers in the cotton industry, in 1933 the same number of spindles was left to 197 workers. In the same space of time, the output of a spinner increased by 35.6 percent.


The “currency dumping”

While the highly rational utilization of man and machine, together with the concentration upon a relatively few kinds of thread and fabric, not only in the cotton but also in the wool and artificial silk industry, may put Japan in a position, even from this merely technical point of view, successfully to meet the European and American competition, still Japan has a further advantage in the controlled devaluation of her currency. This devaluation alone does not in the least explain the success of her export trade, and England has no right whatever to raise a howl on that score. For, in the first place, the devaluation of the English currency took place prior to that of the yen, and secondly, the yen was again stabilized on the basis of the English pound. The English example has further shown that a cheapening of currency has only a brief stimulating effect upon the economy, while Japan’s success is a long-term affair. Her announcement of the possibility of a new devaluation experiment is evidence, at any rate, of the will to administer, if need be, a new shot of adrenalin to Japanese economy; an experiment which England would hardly venture to follow.


Japanese Wages

One of the essential reasons for the low prices of Japanese exports is the Japanese wages. In Japan, the commodity labor power is to be had cheap, even though the Japanese wages, in comparison with those in fascist Germany and fascist Italy fail to reveal that enormous difference which is proclaimed by the European press in the interest of its own entrepreneurs.

The Japanese statistical bureau has computed an average daily wage of 2.53 yen (1 yen is equal to about 50c) 714,600 male, and of 0.95 yen for 729,000 female workers. The Bank of Japan has indicated as average monthly wage of male workers in the metal industry 59.21 yen; in the provisions industry 42.88 yen; in the chemical industry 41.93 yen; in the textile industry 32.05 yen; and for various other branches of industry 44.95 yen. The reported wages for women vary between 23.22 yen in the metal industry and 15.22 yen in the textile industry, and in no case do they amount to as much as 50 percent of the wages for men.

These data, which in themselves are quite unreliable, do not permit an exact comparison with wages in Europe. In the first place, according to an article by Oliver Lawrence in The Listener (London), beginning of March 1934, a considerable part of the wage is paid in kind. And secondly, a large number of the women workers, as in the textile industry, is barracked and accordingly has no rent to pay.


Standard of Living

Japanese wages embody a different standard of living from that of the European workers. The city administration of Tokio has established a mean budget for workers, which comes to 54 yen per month. That is more than corresponds to the average income of all categories of workers apart from those of the metal industry. It is no doubt for this reason that the Japanese statisticians have preferred to make the different computation of income on a family basis. In statistics on incomes and expenditures of 1,000 households - statistics which after all are strongly biased - they arrive in this way at an average net workers’ income of 77.97 yen per month, and give to understand that 4.89 yen of this amount is saved.

That is paltry, to say the least, when it is borne in mind that saving in Japan has to take the place of social insurance. For the lowest category of the households considered, which show an income of less than 50 yen, this computation itself is bound to establish a monthly deficit of 4.34 yen. A comparison between the Japanese wage index and the index of retail prices shows that the living conditions of the Japanese workers, in spite of increasing industrialization and mounting exports, is absolutely being worsened. From November 1931 to September 1933 the wage index fell from 89.7 to 84.7, while the retail index rose from 130 to 147.

The devaluation of the yen has had no influence, according to Japanese data, upon the workers’ standard of living, since the prices to be paid for the necessities of life have not changed. A comparison of the wage and price index, however, says the opposite. It remains to be considered that the necessary foodstuffs for the Japanese workers are limited to rice, fish, tea and a bit of alcohol, and that the rice price index has dropped considerably in the course of the year 1933. The extremely modest costs for the restoration of the commodity labor power account for the low wages in Japan. Taking for granted the standard of living prevailing in the East - a standard conditioned by historical and climatic factors - and bearing in mind the other living conditions in Europe, it can be said that the starvation wages of Japan are not essentially different from the starvation wages of large sections of the workers of Europe. European capitalism, however, nevertheless fails to find itself in a position to compete with the Japanese wage level, unless by bringing its whole working population to the level of income and life prevailing among the German farm hands and in the German labor service, where wages have practically been abolished.


Woman and Child Labor

The “rice standard” of the Japanese workers cuts down the Japanese wage fund in a measure which is still unattainable to European capitalism, even with equal or even greater relative impoverishment of its workers. The great prevalence of woman and child labor, which makes the attainment of the existence minimum dependent on the labor of the whole family, presses the wage level far down in the scale.

In spite of high technical pretensions, the Japanese workers are intensively exploited in the highly rationalized production process. This becomes socially possible as Japanese capitalism has at its disposal a reserve army capable of being enormously expanded. By reason of the great growth of population alone, some 200,000 workers are added to it each year. And on the other side there is the highly impoverished peasantry, which makes up the largest part of the Japanese population: an inexhaustible human reservoir.

This human reservoir lives in pre-capitalistic working and exploiting conditions. Since the Japanese bourgeoisie did not grow up in struggle with the feudal forces in the country districts, but arose through the division of the reigning feudal class, the feudal-agrarian subsoil of Japanese society has been widely maintained. The greatest families of the feudal nobility are at the same time those who carry on the concentrated Japanese industry and are the beneficiaries of a peasant exploitation which amounts practically to serfdom. The feudal dependence of the Japanese peasants is concealed, as in large parts of China, behind rent-in-kind relations. It is customary for the peasant in Japan to turn over 50 percent of his crops as rent to the land owner. Since the highly modern industry and the half-feudal agriculture are bound up with each other in the closest possible manner, Japanese capitalism is a direct beneficiary of the feudal exploitation of the peasants. It pockets such extra profits as fall to imperialist capital from the sucking dry of the pre-capitalist producers in other colonial regions, without being obliged to share with the feudal class and the other innumerable intermediary agents. Though the winnings of the Japanese entrepreneurs are in many cases fabulous (in the artificial silk industry, for example, it was possible to denote yearly profits of 75 percent as the rule), there stands at the disposal of Japanese capital a considerable feudal income, which it is free to employ in the competitive struggle on the international plane.

In this respect, also, it is hardly permissible to speak of a genuine “social dumping”. Japanese capitalism merely makes use of its position - a position attained by the means and methods which otherwise have been applied by imperialist capital to colonial territory.

For the Japanese workers, the old feudal relations have become a further fetter. On the one hand, through the attachment to the land, the care of the unemployed, in spite of extreme impoverishment, becomes “superfluous”. On the other hand, the recruiting and engaging of workers goes on in half-feudal form. Agents of the great enterprises round up in the villages whole ship and train loads of labor volunteers to whom a cash payment is made forthwith when they have bound themselves to work for several years. This business is usually closed with the head of the family; which is to say that a wild form of trade in human beings has developed out of the patriarchal family relations.


Permanent Agrarian Crisis

In Japan, as in general where similar conditions prevail, the position of the peasant grows worse at an extremely rapid rate, for in addition to the yoke of feudal exploitation there was laid upon them also that of capital. At the very beginning of the world economic crisis, in the train of a 20 percent wage cut and through the return of numerous discharged factory workers to the country, the discontent was manifested in strong agrarian uprisings. The partial boom occurring in 1931 failed to bring any satisfactory relief. The prices of important farm products such as rice, beans, tea and raw silk, did not keep pace with the devaluation of the yen. In the course of the year 1933, this development again became critical, and accordingly the Government, in the autumn of 1933, attempted to ease the agrarian situation, but without real success, through extensive purchases of rice. In June 1934 the Japanese agricultural association published alarming reports: it established that 10 to 15 percent of the peasants no longer had any rice supplies for their personal needs, and that the percentage of the famishing in the areas of silkworm culture was still greater. It further became known that the peasants had broken open some of the Government’s rice houses and put these supplies into distribution. The Government is not in a position to remove the causes of the agrarian impoverishment. Any considerable increases in the price of rice would make it impossible to continue maintaining the present wage rates and, with them, the intensified attack on the rivals in the world market. Furthermore, the peasant impoverishment is not to be combatted so much by way of higher prices for rice as through the setting aside of the lease slavery. And the ruling class of Japan will not of its own accord disrupt the basis of its economic power. In view of this fact, there falls to the working peasants of Japan, who make up roughly 54 percent of the Japanese population, a special social significance. The question of beating down the ruling powers of Japan, as in Russia prior to 1917, is not alone a question of the workers’ struggle, but at the same time a peasant question. So long as the ruling class of Japan succeeds in maintaining the feudal-agrarian basis of the country, so long is it not only secured at home, but also enjoys a considerable advantage on the world market.


The Japanese State

Through the close social and family ties uniting the feudal and the capitalistic powers, which are intertwined in closest manner with the State by reason of inherited religion and manners as well as by reason of their interests, the Japanese State has become their ideal instrument both politically and economically. This is proved not only by the policy of imperialist conquests in Eastern Asia, a policy which serves far-flung political and economic aims in the striving for power. This is proved also by the support which the state extends to Japanese exports. Though the state administration is under heavy strain as a result of the military budget, which in the preliminary estimate for 1934-35 embraces no less than 45 percent of all state expenditures, the Japanese state still has considerable means at its disposal for promoting exportation. In the first place, the Japanese shipping firms have adjustable freight rates. When by reason of the freight to a distant market the Japanese commodities would have to be sold dearer than at least five percent under the lowest competing prices, the freight rate is lowered or even, in certain circumstances, directly made inoperative. Any losses of the shipping firms, moreover, are covered by the State through subsidies. It is this system which conceals an actual dumping. This dumping is possible because Japanese industry operates with large earnings. The increasing expenditures of the State are raised, not by way of mounting taxes, but by way of increasing loans. Of more than 2.1 billion yen provided in the new budget, not less than 1 billion are raised through treasury notes while the taxes still bring in less than 700 million yen. Japan’s national debt amounts to 10 billions. It remains to be seen whether the Government will succeed in the long run in keeping up such a financing system, which would be ruinous to any other State, and on the other hand, in spite of all the tensities, succeed in maintaining, even by force, the equilibrium on the agrarian field.

To the methods of transportational dumping belong also those of an indirect state subvention to Japanese industry through state contracts. For armaments, railway constructions, etc., for which the State lets contracts, excess prices are paid by which the entrepreneurs in question are enabled to set low prices on exports. As regards the silk and steel industry, this system has been officially admitted.

On investigating the character of these methods of export subvention through the policy of adjusting transportation costs and through the over-valuation of army and state contracts, one arrives at the following basic fact: Japan’s export power is due to her extraordinarily high capitalist concentration, which is explained by the very manner in which Japanese industrialism arose. A great number of enterprises was founded by the State, and then, when they had become profitable, turned over to private capital - and without exception, into the family possession of the military nobility. Five family concerns, in the hands of the old military nobility, have under them approximately 75 percent of all Japanese industry. This industry, furthermore, is cartellized in the strictest manner, so that there exists in Japan such a direct interlacing of all enterprises among each other, on the one hand, and with the State on the other, as can be met with elsewhere only in Soviet Russia. And that on a profit and private-economy basis. The financing of the State on the one hand, and the financial promotion of export by the State on the other, turns out to be a sort of unified, organized action of Japanese capitalism.

This impression is still further strengthened on considering that the whole export system is organized by the State. Not only are the prices, the quantity and the quality of the export products established from a central bureau, but, in addition thereto, the working up of the foreign markets and the conducting of the flow of exports itself is centralized and organized. Japanese capitalism has been incomparably more successful than that of any other country in taking hold, as organized capital, of the state apparatus and as an organized group in going to meet the competing groups of the other countries.



It has not been possible here to present either exhaustive material or a factual and all-sided analysis of Japanese capitalism, but only points to be borne in mind for that purpose. But at any rate it may have become clear that the power of the youthful Japanese capitalism is anchored not alone in the forced application of the general and well-known capitalist-imperialistic methods, but furthermore in the special structure of its exploitation economy.

Japan will certainly not be able to get away from the contradictions of her own development; not only that, but she will not succeed in avoiding either the laws of antagonistic profit economy itself, nor the opposition between modern capitalist production and feudal appropriation in agriculture. But so long as she is in a position to maintain her social stability itself and to assure herself the double basis of her profit economy, so long will she also be in a position to draw from a new crisis the new forces for overcoming it. She is merely at the beginning of a mighty imperialist attack which she is carrying on both by military and economic means against the old capitalist powers. It is probable that she will emerge as victor from the coming conflicts and will become the deciding force of world-capitalist progress generally for the near future – if her way is not barred by the uprising of the international proletariat, or if she is not hurled back by the peasant revolution of Asia.


Last updated on: 5.15.2016