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Japan: The failure of 'Abenomics'
Building of working class left opposition urgent
Carl Simmons, Kokusai Rentai (CWI in Japan)
Shinzo Abe recently became the longest serving Japanese prime minister in nearly four decades. His Liberal Democratic Party (LDP) government has regained its lead position in the opinion polls despite the huge demonstrations of last summer against new security laws, which a majority of the population clearly opposed.
This temporary stabilisation has been possible largely because of the weakness of the opposition and that the failure of 'Abenomics' has not yet become apparent to the mass of the population. However, behind the facade of political and social stability Japanese capitalism faces an enormous crisis - even before the recent volatility in global equity markets.
Japan's economic growth is pitifully low. What started as "the lost decade" has now become "the lost 20 years". In addition to this slow economic decline, Japan faces a rapid decline in its population.
Rise of China
The sense of crisis and alarm at national decline has been exacerbated by the dramatic rise of China as a major world economic and military power, and rival - fuelling the rise of Abe with his nationalist rhetoric.
It has also changed the LDP. In the past this party was dominated by personal cliques sharing the spoils of office. The party today is dominated by the shadowy and reactionary Nippon Kaigi (Japan Conference) for which Abe acts as an advisor.
While Abe is personally committed to the right wing's ideology and their programme of constitutional revision (remilitarisation and authoritarianism), he is also aware that the mood doesn't presently exist in Japanese society for such a wholesale turning back of the clock.
The passage of the Secrecy Protection Bill, the attempts to silence opposition by bullying the press, and now, the passage of the new security laws have alarmed a segment of society. Most significantly these issues have awakened a layer of youth to political activity.
While constitutional revision may not be the main emphasis of his campaign in July's general election, Abe will attempt to exploit incidents such as the North Korean nuclear test or further incursions by Chinese ships into waters claimed by Japan to promote the idea of constitutional revision.
Failure of 'Abenomics'
The initial effect of the government's policies of 'quantitative easing' (QE) was to boost the profitability of the major corporations.
The already wealthy have gained most. The National Tax Agency reported the number of people whose income is greater than ¥500 million a year ($4.26 million), has risen from 578 in 2010 to 1,515 by 2013.
The gains in company profitability have come mainly from a fall in the value of the yen as a result of Abe's policies. Despite this, Japan is still running a sizeable trade deficit.
But an increase in cash held by major companies will not by itself be enough to maintain the recovery. For that, profits need to be reinvested.
But in the face of a stagnant domestic market and a slowdown in China, the bosses will want to know where the sales are going to come from.
Even if there is a market for the new goods being produced, why should companies make those investments in Japan? The fall in the yen has hardly made a dent in the trend to move production overseas.
Abe's original plan was a target of 2% inflation, which he believed would force businesses and consumers to spend or to see existing cash reserves lose their value.
However, despite three years of QE and a massive expansion of the money supply, inflation has averaged a measly 0.2% since July, well short of the government's target. However, QE has increased government debt to a staggering 226% of GDP.
With the economy narrowly avoiding a second recession in the third quarter of 2015 the present recovery is anything but robust. The decision to introduce a negative interest rate for banks indicates the failure to increase demand in the economy.
Another arrow of Abenomics was supposed to be 'structural reform' - a euphemism for making it easier for employers to fire workers.
The 'lifetime employment system', once seen as a pillar of social stability, has been seriously undermined. Full-time permanent workers made up 85% of the workforce in 1984. This has dropped to just under 60% today.
The increase in irregular workers has brought with it a major increase in poverty. The number of working poor, who earn less than ¥2 million ($17,000) a year, reached a record 11.39 million in 2014 - around one in every six workers.
Abe and his advisors understand the weakness of the present recovery. He is hoping that he can make it through to the Upper House elections next year without another downturn.
The true legacy of Abenomics has been a lacklustre and unimpressive recovery with continuing attacks on workers' living standards.
The most significant factor Abe can count on is the weakness of the opposition. The main opposition party, the Democratic Party of Japan (DPJ), is a lash-up of LDP renegades and former sections of the Social Democratic Party - predominantly from its right wing - supported by the largest and most conservative trade union federation, Rengo.
The DPJ in government from 2009 to 2012 carried out even more orthodox neoliberal policies than Abe.
To its left, but a shadow of its former self, is the Social Democratic Party, the successor of the Japan Socialist Party, once the mass party of Japanese workers. Only a major force in Okinawa, it won't stand candidates in every constituency in the next election.
The Japanese Communist Party (JCP) is the only party on the left capable of attracting sizeable electoral support on a national basis. However, while its support is up, its membership is ageing rapidly.
The JCP is distrusted by many workers and union activists who formerly supported the SDP. And while they may vote for the JCP candidate for lack of an alternative they do not regard it as their party.
The JCP relegates the idea of socialism to the distant future. Its programme states: "A change Japanese society needs at present is a democratic revolution instead of a socialist revolution."
Recently the party has undertaken an important shift in tactics. Previously it had been reluctant to cooperate with any group outside of its own ranks, maintaining its own union federation, and citizen groups under party control. It stood candidates in every constituency, regardless of its support.
However with the rise of right-wing populist forces supporting constitutional revision, such as Hashimoto's Osaka Ishin no Kai and, nationally, Abe, they have reversed this stance. They have not only withdrawn their own candidates, but even, in Osaka at least, supported LDP candidates as the lesser evil.
The call for a broad opposition alliance to stop Abe has gained an echo. It has been endorsed by the youth organisation, Student Emergency Action for Liberal Democracy - which played an important role in the movement against the Secrecy Act and security laws of last summer
However, this strategy will not actually succeed - as shown when tested in the recent Osaka mayoral and gubernatorial (governor) elections.
Instead of a call for cross-class opposition unity, what is needed is a call for an alliance of citizens' groups, combative labour unions and left political parties around a programme of struggle. This should include abolition of the secrecy and security laws, opposition to Abe's plans for constitutional revision, and shutting the US military bases in Okinawa.
It would include opposition to nuclear power and the present energy policy that threatens environmental destruction. It would also demand a minimum wage of ¥1,500 an hour, permanent status for irregular workers and reform of health insurance to ensure 100% coverage.
It would also need to fight for gender equality and against the reactionary attitudes towards women of the LDP and Nihon Kaigi.
Such an alliance, if realised, could lay the basis for a new party of the left. It would pose a real socialist alternative to capitalism, which in the present epoch brings with it restrictions on democratic rights, discrimination, inequality, environmental destruction and war.
In The Socialist 3 February 2016:
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