Photo by KOBAYASHISUNOBU Presented by SOTOCOTO
Dr. Ryall Watson was listening to the reports coming in one after another to describe the miserable economic state of Japan, once called "a land of rising Yen". It was not long ago that the Japanese system seemed to be leading the world's economy, functioning like a precision machine under its mask of mysterious traditions. What was it that had messed up the system? Were the circumstances desperate beyond reparation? Flooded with all these questions, Dr. Watson, a sumo-loving, world-renowned life scientist, one day visited the Diet Hall to discuss the future of this puzzling land with Prof. Shin-ichiro Kurimoto--one of his old friends in Japan and an economic anthropologist-turned member of the House of Representatives.
|Dr. Watson: Would you please tell me
how your country has been faring recently? Is it still in a torrential rain?
Kurimoto: There is no doubt that business is suffering; but the general economy as a whole is in an even worse state. You could call it 'nearly dead.' I mean, Japanese economy has lost its independence to such a degree that our government unconditionally turns its face at the word of command from the United States, particularly since Obuchi took the rein of the administration. I think our country used to maintain at least 'some' pride and independence in the past, even at times when it appeared to outsiders that Japan hardly raised any objection to what Americans told us to do.
Dr. Watson: Could you tell me specifically what happened to your country, then?
Kurimoto: As you may be well aware, the Japanese financial system, which had long been operating under the tight control of the Ministry of Finance and the Bank of Japan, finally collapsed last fall. Then, they succumbed to the United States' coercion to sell off the *Long-Term Credit Bank for almost nothing, leaving us in no position to recover our huge tax money that had been injected into the LTCB. It was a very important turning point.
Dr. Watson: That was why you left the Liberal Democratic Party supporting such a betraying prime minister, wasn't it?
Dr. Watson: I am quite curious to know what it was that turned an economic giant once having a prudently managed system like Japan into such a weakling that is unable to voice nays against the United States.
Kurimoto: This may sound surprising to you, but the Japanese economy was not being managed with the utmost caution as you may think. Most of the times, our therapy was a Kamikaze-style patchwork. During the bubble economy in the 80s, the financial institutions were so exhilarated that they kept making loans indiscriminately, knowing that most of such loans would be bad assets in the future. Following the burst of the bubble, every measure they took to mend the situation turned out to be a failure. In stead of restoring the financial confusion, they decided to put off the fundamental solution of their problems. Then the worse came worst. That's where our economy stands.
Dr. Watson: Wasn't Japan blessed with any influential business leader or powerful politician, like Mr. Greenspan of the FRB, who could take an initiative in preventing the financial slide?
Kurimoto: I don't think that Mr. Greenspan is able to wield much effective influence over the American economy as a whole. What he could do is not much more than a lip-service maneuvering of the market. Of course, there is no one in Japan comparable even with a mini-Greenspan. When it comes to the financial and stock markets, the problem is far more fundamental and even fatal. In short, there is too much, far too much money circulating out there. I would like to invite your attention to the fact that it takes 2,000 trillion yen to buy up all the stocks of the world, while the money circulating around the world at any one moment amounts to 5,000 trillion yen.
Dr. Watson: More than twice as much, wow!
Kurimoto: It takes only 400 trillion yen if you are to purchase all stocks enlisted on the Japanese markets. And the stocks enlisted on the American markets are worth about twice as much. In any case, there is too much money in the world, and no one on earth can control its erratic behaviors. Such a financial system is destined to collapse, I am afraid.
Dr. Watson: If that is the case, I wonder what the leading countries of the world are going to do about it.
Kurimoto: I anticipate that, in not-too-distant a future, the United States will be putting more pressures on us to use more money. They have been complaining for some time that we are saving too much in the banks. But recently the Japanese people's perception towards banks has changed considerably. They have realized that the banks may not be the kind of trustworthy institutions that they can safely vest their money in. An increasing number of Japanese now think that they will be better off if they purchase something or invest in something, rather than saving up. However, our spending pattern may look still too modest to the eyes of the Americans. And that's exactly where they will poke us.
Dr. Watson: Parents used to teach their children to spend only half of their income and save the rest. It looks like such a teaching has been relegated to an esoteric or even wicked philosophy in the current style of American economy.
Kurimoto: That is correct. Their financial dogma seems to dictate, "Spend 90% of what you earn, save only 5 or 10%, and be happy!"
Dr. Watson: Mr. Kurimoto, do you believe that that piece of financial advice also holds true for the Japanese at the present time?
Kurimoto: I believe so. But you'd better save in dollars, not in yen, since the latter has not yet been established as a key currency capable of maintaining a relative stability at times of crises, like the dollar which, on the other hand, has fairly reliable track records.
Dr. Watson: Speaking of the American economy, I wonder why it manages to get around a major collapse despite all kinds of alarming signals, such as its ever rising stock prices and individuals' assets that seem to be inflating forever. But it appears to me that the growth of those assets is only backed by credits and virtual money. In other words, it is only a nominal gain, and there's no fundamental guarantee for the lasting security of your swollen assets.
Kurimoto: I agree with you in that the current American Dow index is overvalued. I have a feeling that it will have to come down, in the near future, to around 8,000 points before everybody can feel comfortable. Very few people share bullish views towards the Dow, and a whole lot of others are aware that there must be inherent flaws in their system. The core group of the most powerful American businesses and propertied class, including companies like Microsoft--which are believed to wield considerable influences over the steering of the country--used to support the Republicans up until a while ago. But they now stand behind the Clinton-Gore administration. That support could be short-lived, though, since Gore seems to be running far behind his Republican contender, Bush Junior, in the prelude to the coming presidential election.
Dr. Watson: Do you think that the very shift of the American economy as you have just suggested will have positive impacts on the Japanese economy?
Kurimoto: I think it will, at least for the time being. If the current American bubble economy bursts to some degree, a good part of their money is expected to flight to Japan, because the Americans know that the Japanese market is easier to maneuver to their advantage, compared with the European counterparts. Against the historical perspective, you can tell that Europe has seldom been the most servile market for such American funds. When it comes to defending their own financial markets, the European politicians are far more sensible and protective than their Japanese counterpart, in that the Europeans have at least some workable visions as to what they should do for the coming new era. Many of the present European political leaders have participated in the anti-government movements or gone through drug and other anti-social experiences in their 20s during the 1960s and 70s, and they have changed their life styles ever since. Therefore, those politicians know well, from their first-hand experience, what the real world is like. The Japanese political system, on the other hand, is packed with old-time players, whose pet philosophy is "Stick to the status-quo and conserve the system as is." Being in my early 50s, I am even considered one of the younger members in the Diet! Can you guess how old Mr. Miyazawa, the Minister of Finance, may be? Don't be surprised to hear that he had graduated from that famed University of Tokyo before the war. The government consisting of such antique personnel is no match for its European and American counterparts in efficiency. For example, those guys like Rubin, being energetic and in their prime, must find it a cinch to deal with our old boys in their negotiations. Our system may look modern on the surface, but under the cosmetics we find legacies handed down from the politics of the Tokugawa era.
Dr. Watson: I know what you mean, Mr. Kurimoto, but wasn't it also true that the wisdom of the old of a small society, for example, where things were decided on a communal council convened under a tree or something, had in fact guided the people to a safe path to choose? Don't you think that we might be better off with an aid of old wisdom when we tackle global issues, too?
Kurimoto: Come to think of it, it was certainly a miraculous thing that
our country with so antique a system had managed to rank among the great powers of the
world at least up until the mid-1980s. I admit that our conventional system was NOT all
that bad after all; however, it doesn't seem to be functioning properly any more. Even
though it is operating, I don't think Japan will be able to survive with that system in
these days of global competition.
|The foregoing dialogues seem to suggest
not only a stormy future of Japan but also that the future of the world economy in general
might be taking an ugly turn. What is money to us? And how is the role of money going to
change? Dialogues between the two wise men continue:
|Dr. Watson: Money was originally a
commodity, such as gold or silver, with a value that was established as an exchangeable
equivalent of all other commodities. Then, when money took the form of paper notes at some
point in time, it became nothing but a symbol convertible to a certain amount of gold.
Although they were mere scraps of paper, they had the same value as a prescribed amount of
gold. This system of official negotiable paper notes was backed by public confidence in
the issuing government or bank. Now the money has further changed its form to virtual
money, a mere string of electronic numbers. Most transactions can be settled with credit
cards, requiring no need to use paper notes. I even wonder how often bank clerks catch
sight of paper currency these days.
Kurimoto: There is no doubt that the pervading virtual money is one of the primary causes that have brought about the present economic problems. The decision that mankind made in the 1960s to give up the convertibility between gold and paper notes certainly represented a big turning point. Then, we have lost a brake on a temptation to print money far more than necessary, and here we are flooded with an unprecedented glut of money up to our nose.
Dr. Watson: I am an African, born in Africa and
brought up in Africa. We, Africans, don't trust the countries of the northern hemisphere.
It includes the United States, of course, but Japan and Europe are also included. They
have plundered us of everything. They give us very little for what they have taken. They
have kept a freehand in pricing whatever goods they made from what they took from us. And
we, Africans, cannot live without those goods. This is an elaborately designed and
carefully controlled system.
Kurimoto: No, I don't think it's impossible. Rather, I would even think that the human race may not survive the 21st century unless we manage to install a system like barter. Our world needs a system that doesn't count on money or capital, otherwise we would be doomed. As far as I remember, it was Buckminster-Fuller who advocated such philosophy for the first time in the 1960s. I think it's time for us to set to work in order to bring on a society envisioned back in those days.
Dr. Watson: There's a whole lot of young people in the southern hemisphere who are seriously working on it. I personally know many of them in Brazil, Australia, and South Africa. They share one common view that now is the time to rise to action, to overthrow the existing power structure, and to free themselves from the colonial domination.
Kurimoto: Ummh, I like that. I hear them.
Dr. Watson: They also think that the year 2000 will provide them with a golden opportunity. The Y2K problem, or the millennium bug, that is. The whole world is now getting edgy about this issue. That's exactly the right timing for any drastic change to take place. South Africa happens to be rich in all resources except for oil. So if we can manage to take the initiative in leading the whole Africa as a single unit, that movement will have a great power. Australia has already established itself as a powerful state. Brazil, too, has the potential to grow into a big player. So, if all these southern countries can unite for their common cause, they will be able to stand up to the northern hemisphere. Those young people in the south really believe that the coming year may provide a great chance for them, depending on the way the Y2K bugs come into play.
Kurimoto: I really wish them to rise to action. Unless we do something now, I'm sure the present world system is going to be a total shambles in 10 years or so from now.
Dr. Watson: In the event that the Y2K problem actually takes place, the countries that are less dependent on the 'virtual economy' like those in the southern hemisphere will be less vulnerable. In the high-tech dependent societies, where people's life revolves around things like credit cards, credit, guarantees and transaction records, you would run a risk of losing all your properties into thin air once there occurred a global problem in computers like the millennium bug. Such societies are like sandcastles. They would reveal their extreme vulnerability to the collapse of an economic system fueled by virtual moneys such as paper notes, plastic money or electronic money. Those moneys have no physical reality, it is like an elusive phantom.
Kurimoto: Now may be the time we should get rid of money from our world.
Dr. Watson: My idea is that we might be better off with water, in place of the conventional money.
Dr. Watson: Yes, water! Fresh water. Just imagine a world where water plays the role of money in place of gold, silver and copper. And it will be appreciated by people as the most valuable medium for economic transactions. Water, as a matter of fact, is something that is far more valuable even now than most people may think. The kinds of water that have a real value are hard to come by. They are real pure, clean and beautiful waters, including the water of the deep-sea currents, the deep underground water often found in places like gold mines, or the water conserved in glaciers.
Kurimoto: Amazing. Now I see your point.
Dr. Watson: If my vision becomes reality, countries like Canada will be extremely wealthy states, because they keep great amounts of fresh water within their territory in the forms of underground water and ice. And those countries without such resources will be in a serious trouble. Even now, mineral water fetches good prices in Europe and the United States. In the States, mineral water costs more than the same amount of gasoline. This very situation may represent a start of the prelude to a water-based economy I've been talking about.
Kurimoto: Then, paper notes can survive only as a means to be convertible to fresh water. Isn't that right, Dr. Watson?
Dr. Watson: Do you think Japan can survive in such a world?
Kurimoto: Well, when it comes to fresh water, I guess we will be faring rather well.
Dr. Watson: Hum, my concern is that agriculture, particularly rice paddies, degrades the quality of water.
Kurimoto: But I'm not TOO worried about it, because the agriculture of this country is almost on the verge of collapse. Oh, isn't that a pity? I really wonder what our economy is coming to?
*The Long Term Credit Bank, into which the stingy
Japanese Government threw almost equal sum to the yearly budget for the whole education
,research and culuture.
Translation by Triking
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