Press translations [Japan]. Economic Series 0244, 1946-02-01.

Summary:

Capitalism or Communism?

I. The Basic Causes for the Collapse of JAPAN's Wartime Labor Structure.

Before the war the Japanese factory worker was subjected to intense propaganda, the purpose of which was to compel him to work long hours for low wages. He was told that he, as a worker in the factory, was a member in the family of factory-workers, and that the management's role was that of a firm but just parent. It was his duty therefore, to work for the factory with a true filial spirit and to ask no questions about the low wages or the long hours which were assigned to him. This propaganda was on the whole successful; the Japanese worker was for the most part industrious and obedient, and he served efficiently - and cheaply - in JAPAN' s pre-war economy. Needless to say, JAPAN' s capitalists exploited this apathy to the fullest extent.

With the coding of the war, the capitalists and the military, whose influence in management increased as the war progressed, exploited the worker even more, and gradually succeeded in depriving him of even the few human rights which he had hitherto enjoyed. At last the long-suffering worker began to protest: harried by air raids, lacking food and the other basic necessities, and forced to work long hours under unbearable conditions, it is surprising that he did not protest before he did. His protest took the form of absenteeism and a general let-down in the productive effort. All the government's counter-measures were without avail: military police arrested absentees and military inspectors were placed, in the factories, but absenteeism and the slow-down continued, and had a. definite effect on productive capacity. The Japanese version of capitalism, based on the "family system" and outrageous exploitation appeared near the end of the war to be on the verge of a complete breakdown.

Now the war is over, the capitalists themselves recognize that they cannot go back to the old system, that they must recognize individual rights and pay fair wages if they are to survive at all.

II. Laissez Faire, Capitalsim or Socialism?

JAPAN's present inflation may be traced to a number of basic causes, They are:

• 1.The sudden end of munitions production and the inability of the munitions industry to convert to peace-time production, with the

•   ECONOMIC SERIES: 244 (Continued) ITEM 1 (Continued) resulting unemployment and loss of purchasing power (the capitalists are trying to obtain money compensation from the government for reconversion purposes. It goes without saying that if they receive this compensation, the present inflation will only he aggravated).
• 2.War damages, loss of territories, and the economic blockade, which have brought about shortages in goods and caused high black market prices. The shortages have been increased by transportation difficulties, which make for scarcity in certain areas and comparative abundance in other regions.
• 3.Heavy government expenditures which must be made to meet the interest on war loans, to provide compensation for war industries, and to meet the cost of the Allied occupation.

To meet this crisis in our Nation's economy, laissez faire capitalists argue that first of all, price controls should be relaxed. If these controls were relaxed, they say, many commodities would be thrown into the legal market, black market prices would be reduced, and the inflationary trend would be definitely checked. It should be evident, however, that this and other stop-gap reforms are inadequate to mart the current crisis. The basic cause of inflation is that the necessities of life are simply not being produced - at least not in sufficient quantities. Our primary purpose, then, should be to increase the production of these necessities by every means available. In order to increase this production, the government should, vigorously carry out the following program:

• 1.It should not compensate the capitalists for war expenditures, but instead should re-distribute this wealth in the form of pensions and allowances, etc., among the people.
• 2.It should prevent the capitalists from using their surplus currency to establish and. promote unnecessary industries, and should place all financial institutions in the hands of the government.
• 3.It should plan production and should salvage and utilize all available productive machinery to achieve its goals.

III. The Basic Tenets of Socialism.

There are three basic approaches to the problem of collecturizing the nation's economy. All three may be roughly included under the general heading of socialism. They are:

• 1.The co-operative system: those who advocate this system would organize wide-spread co-operative associations among producers and consumers, and carry out reforms within the general framework of the capitalist system.
• 2.The social democratic system: the Social Democrats organize labor unions, farmer unions, and a proletarian party, and seek to carry out their reforms politically, by gaining a majority in the Diet.
• 3.Communism, which unequivocally sets out to establish a proletarian government.

Among the masses of the Japanese people, in spite of the new political activity which has arisen since the end of the war, there has been little genuine political consciousness. Suppressed by generations of despotic rule, they have no true spirit of revolution, no driving urge to democratize the nation. In the crisis which now

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ECONOMIC SERIES: 244 (Continue)

ITEM 1 (Continued)

faces our country, however, in spite of the general apathy, it is imperative that thp democratic political groans unite there forces and work together for the salvation of the nation; only by such a united effort can the economic chaos which confronts us be averted.

Summary:

By order of General Headquarters on 6 December 1945, every principal company controlled by the ZAIBATSU has been dissolved, and all of their shares have been transferred to the Shares Liquidation Committee a through which shares will be sold to the public. All members of the ZAIBATSU families have been forced to retire from Japanese economics and start anew from individual enterprises. Great though the importance of their existence was, greater still the influence of their retirement upon the economics of JAPAN. This retirement marks the dissolution of JAPAN' S old economic system

This means that JAPAN has taken her first step toward democratizing her economics, and further democratization is the important task assigned to all of us for the future. In the following list of companies under the management of the four great ZAIBATSU, are indicated the amounts of capital of each company and the precentage of shares of this capital held by members of the ZAIBATSU families in control of the particular company:

MITSUI:

MITSUBISHI:

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ECONOMIC SERIES: 244 (Continued)

ITEM 2 (Continued)

SUMITOMO:

YASUDA:

The country is now free from the pressure of the ZAIBATSU but unless we later our attitude toward profit-seeking, there will still be no hope for the economy of JAPAN, especially with enormous payment of reparations due to the Allies.

Therefore, if everyone acts selfishly and abuses our economic freedom, the entire nation will eventually be destroyed. In this connection, we require a certain amount of control in order to make use of our limited resources efficiently, and to facilitate division of business profits more equally among the people to sustain them in their daily lives.

DISTRIBUTION "X"

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