Press translations [Japan]. Economic Series 0123, 1946-01-04.

Summary:

Delay in the reconstruction of industry, due to sabotage by capitalists under the direct control of the Government and the great financiers, is creating a large number of unemployed. This mass of unemployed is turning to black marketing. A temporary boom was created by retirement allowances, but this has quickly passed away. Purchasing power of the petty bourgeois has reached its lowest limit. Commodities went beyond the purchasing power of the common man and fell under the control of the richer classes, including minor capitalists, and finally commodities were held by financial capitalists as a means of speculative bargaining.

Circulation of currency has greatly increased. Thus inflation is becoming prevalent and the prices of commodities are rapidly rising. The unemployed, war victims, salaried people, and the lower middle classes will eventually be shut out from the process of capital circulation. They are destined to fall to the position of the proletarian classes. Such new differentiation of social classes is an occurrence of the last quarter of this year.

I. Farm Land Reform

Farm land reform should form the feed of the democratic revolution of JAPAN, uprooting all the semi-feudalistic foundations of Japanese capitalism. But the reform law which passed the Diet is far from being of revolutionary character. First, the law makes the tenant's position unstable. Second, newly created landed-farmers are likely to be reduced to a tenant farmers status again due to the lack of funds for maintaining their newly obtained land. Third, the law does not provide for establishment of farming rights. Fourth, reduction of tenant rents is not attained by the new law. It established a cash-payment system of tenant rents, but the farmer's financial security is not assured against fluctuation of commodity prices by this system alone. Fifth, feudalistic remnants are not entirely uprooted.

The people of today are conscious of their position as a social class and are ready to take advantage of any small chance of reform as a step toward more radical reforms. One of the most important tasks of the common people is to unite and direct this class consciousness in line with the democratic revolution.

The farm land reform will bring forth a new differentiation within the farming class and create a farming proletariat. This farming proletariat, being incapable of sparing food for its own consumption, will always be threatened by starvation, just like the urban working people.

The Government and bourgeoisie are now attempting to set the urban people against the rural farming people by shifting to the latter responsibility for the food crisis. This is, in fact, nothing but an

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outcome of the evil policies the Government and bourgeoisie had employed in their own interests. If the situation continues unchecked, grave consequences will manifest themselves before long. In this case, the people should be warned of the bureaucrats' attempts to recover their lost power by suppressing the people's movement under the excuse of maintenance of peace.

The working people must organize themselves into labor unions, industrially or territorially under national unification. The farming people must also be united and join with the urban working classes in fighting against the forces opposing their common interests. The people, including laborers, farmers, petty bourgeois, and salaried people must unite to fight for the people's control of production and distribution of food and other daily necessities.

II. Unequal Distribution Must Be Rectified.

As pointed out by Supreme Commander for the Allied Powers, food stuffs are not entirely insufficient. They are concentrated in the hands of the richer classes. The limited amounts of distributable foods and other daily necessities should be given preferentially to the non-propertied, working classes.

III. Democratic Character of Reparations.

Reparations will not deal a fatal blow to the reconstruction of the Japanese national economy, as some bourgeois ideologists insist. The group which suffers most because of reparations is the ZAIBATSU and not those who wish to reconstruct industry along democratic lines. In his 17 November interview with the press correspondents, Ambassador PAULEY said that reparations will contribute to the destruction of the ZAIBATSU, who are responsible for the outbreak of the war. On the other hand, SCAP ordered the Government to uproot all feudalistic and despotic suppression of the working classes and to improve working conditions. The people must keep a careful watch to see whether or not the properties of the ZAIBATSU, as included in reparations, will be rightfully delivered.

IV. Property Tax and Wartime Profits Tax.

The same can be said concerning the property tax and the wartime profits tax. Some bourgeois ideologists insist that these taxes, depriving the capitalists of their accumulated capital, will bar the reconstruction of capitalistic industries. But this is not the case. The new taxes do not mean a lack of capital. The capital is to be invested in peaceful industries to raise the living standards of the people by means of a democratic people's government. The Allied Powers expect a democratic government to be established as promptly as possible. The working masses should exert their best efforts for building up such a government, even if only for rebuilding industry. This is the only way to establish JAPAN as an independent state in international relations.

Summary:

With the beginning of the new year we must do our best to get rid of confusion and despondency in our industries and to fulfill the important duty of reconstructing the national economy of a peaceful JAPAN. The aimlessness and despair attendant upon defeat, combined with the shortages of food and coal, greatly retard the progress of industrial revival.

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ITEM 2 (Continued)

Industrial circles, accustomed to bureaucratic control during the war, failed to resume independent operation with the ending of the war. Consequently, unfavorable conditions have appeared, such as capitalist sabotage, increasing numbers of unemployed, mounting inflation, and decline of transport capacity.

This year we must strive persistently and energetically to overcome these unfavorable conditions by restoring and increasing productive capacity. The reconstruction of the Japanese national economy should be made along lines of economic democracy. For this purpose, all deep-seated feudalistic elements in the economic structure, and all the obstacles which have arisen since the war, must be eliminated as promptly as possible. The Government should give up all bureaucratic controls, and the capitalists should establish, independently, the co-ordination of industry.

Second, the food and coal crisis must be overcome. The coal shortage was seriously aggravated in the second half of last year, becoming thereby the greatest factor in the decline in production. Effective measures should be taken for promoting the production not only of coal, but also other essential staple materials.

I. Conversion of War Industry into Peacetime Industry.

No appreciable progress has been made in industrial reconversion due mainly to the fact that the Government's indemnification is still pending for most of the companies engaged in war industries. Therefore, it is advisable for those companies to establish new companies, leaving the old ones untouched, and using the production facilities and materials of the old companies to produce consumer goods.

II. Restoration of Minor Enterprises.

Enterprises on a minor scale will be the industrial form most suitable for future JAPAN. However, it is regrettable that no measure has been taken by the Government for the restoration and encouragement of small enterprises. For this purpose, drastic revisions should be made of the existing Commerce and Industry Organization Law. Financial aid and technical guidance should be given to small enterprises and, at the same time, the unrestricted establishment of enterprises should be prevented.

At present, small enterprizes are worried about the competition of street vendors and co-operative unions. If the situation continues unchecked, these small entrepreneurs will surely become incapable of maintaining their existence.

III. Form of Enterprise Must Be Studied.

Democratization of economy has been realized by dissolution of the ZAIBATSU and the organization of labor unions. Relations between capital and labor have become quite different from those of the old days. Labor's participation in management through collective bargaining under the Labor Union Laws is the most characteristic example. A situation is bound to arise in the future when employees will take over the management of an industry from its owner because he is incapable and unwilling to do his duty.

Whether or not the existing form of private enterprise is suitable for basic industries such as coal mines, iron-foundries, transportation, communications, banking, and electric power, requires further study. In deciding this problem we must consider what kind of form is the most efficient and reasonable in promoting productivity. The immediate establishment of a price policy by the Government, and the establishment of an organization for the independent co-ordination on the part of private entrepreneurs, will surely help industrial circles to get rid of existing confusion.

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