On August 26th, Yukio Hatoyama, President of the Democratic Party of Japan (DPJ), then the main opposition party to the long-reigning Liberal Democratic Party (LDP), wrote an editorial for the New York Times on a new path for Japan. In the August 30th lower house election, Hatoyama and his party won a landslide victory that gave Japan its first significant regime change since the post-World War II US occupation. Hatoyama and his party took power on September 16th on a largely anti-bureaucracy, anti-globalization, anti-corporate platform that stresses decreased economic reliance on the United States and increased diplomatic and economic ties with China.
It’s only been a few days since the DPJ took power, and it’s a holiday week in Japan, but so far, the new administration has made public announcements favoring a market-based, strong yen as a safe-haven for dollar-wary investors– thereby angering Japan’s influential manufacturing-export industry, alienated big banks by making it easier for small-businesses to receive and pay back loans, and has significantly reduced the sum earmarked by the LDP for future corporate bailouts. All three of these measures are strikingly capitalist, from an administration largely elected on pro-labor, anti-capitalist rhetoric. These meaures reveal a correct understanding of the recent financial crisis not as a failure of capitalism, but as the effect of a breakdown in corporate welfare and artificial markets fostered under the neoconservative Bush Administration, the shockingly pro-big business Clinton and Obama Administrations, and their Japanese clients in the LDP. In Hatoyama’s New York Times editorial, he speaks of a “US-led…fundamentalist pursuit of capitalism (whereby)…human dignity is lost”. It’s easy to portray this as political pandering, because, despite how the word has been twisted by politicians and propagandists in recent years, capitalism is at heart a system that is based on the dignity of the individual to make his or her own economic decisions. One would hope that Hatoyama’s use of the term capitalism belies its true meaning in favor of the corporate oligarchy it now represents. Hatoyama alludes to the French Enlightenment ideal of fraternity as a guide for future Japanese economic policy as opposed to the “current globalized (American-style) brand of capitalism”, and seems to possess the correct understanding that modern mainstream Monetarist (The Fed) and Managerial (neoconservative) styles of economic thought fail to incorporate environmental issues or social costs into their models and policies. While Gordon Chang suggests in Forbes that the DPJ would have have Japan become an economic client state of China in the same way that the LDP pursued an economic client-state relationship with the United States, it is clear from Hatoyama’s editorial and a general public dislike and distrust of the Chinese government that this is not the case. On the contrary, Hatoyama posits Japan as a nation caught between the corporate and military ambitions of the United States and China and stresses that “the Japan-U.S. security pact will continue to be the cornerstone of Japanese diplomatic policy, (as this reduces) the miltary threat posed by…China”. Hatoyama seeks regional integration and stability through resolving long-standing territorial disputes, liberalizing trade, and an eventual Asian currency union on the EU model. He stresses the importance of combating what he sees as nationalism taking hold as globalization becomes less and less appetizing to the world’s peoples. While other countries, most notably the United States, misrepresent the financial crisis as a failure of free-market capitalism as opposed to the collapse of several government champions and the ensuing ripple-effect, Hatoyama’s Japan refuses to throw the baby out with the bathwater. Instead of moving towards protectionism and trying to solve macroeconomic problems with more corporate bailouts and managerialism, the DPJ’s policies have been a fresh breeze of classical liberalism in an era dominated by decadent bureaucracies, insurmountable barriers-to-entry, faux-oligopolistic, heavily regulated industry (air travel, agriculture, insurance), and environmental neglect, both in Japan and elsewhere. The Liberal Democratic Party ruled Japan from the end of the US occupation until last Wednesday and largely pursued a “second-banana” policy under the shadow of US military-corporate-government imperialism. Hatoyama’s New York Times editorial is titled “A New Path for Japan” and his Democratic Party of Japan seems to be taking that new, independent path as a friendly, open nation, disengaged from warfare, politcally neutral, and both capitalist and liberal, in those words’s true, original, untwisted meanings.