Global Turmoil
Capitalist crisis, a socialist alternative
Chapter Eight: Japan and Australasia
In relation to Asia’s crisis, Lee Kuan Yew, head of Singapore, has declared that the Asian region "will not fully recover until Japan recovers". He added the caveat: "Nobody, at present, can say with confidence when that will be." We have dealt earlier with the crisis in Japan from an economic standpoint. The social and political repercussions of this are, however, vital. We said at the beginning of this decade that the most important changes that would be registered politically would be the emergence of the German and Japanese proletariat alongside that of the USA.
This economic crisis has had an unprecedented effect socially. Job security is vanishing, spending is down dramatically, the jobless rate is rising by 300,000 a month; more than in Britain during the worst of the 1992 recession. The ruling party of Japan, the Liberal Democratic Party, suffered dramatically in the earlier part of this decade in the aftermath of the collapse of Stalinism and the beginning of the recession in Japan. However, the move to the right of the former workers’ parties has meant that they have failed to offer a real alternative and, therefore, the LDP has not suffered the fate, for instance, of the former Christian Democrats in Italy. In elections there has been an increased vote for the Communist Party where the masses have registered their opposition to the LDP. Now faced with a serious recession and slump, the LDP suffered serious reverses in elections to the upper house in July.
The spectacular losses suffered by the LDP in elections to the Upper House in July, is a dramatic reflection in the political sphere of the economic crisis of Japanese capitalism. An important feature of this election was the performance of the Japanese Communist Party (JCP) which massively increased its vote from 3.5 million to over 8 million.
Instead of giving voice to the desire for change represented by its increased vote, the JCP leadership has called for a coalition with the Democratic Party. This party is composed of renegades from the LDP and the former right-wing pro-business wing of the Social Democratic Party. The leader of the Democratic Party has called for a Japanese version of the ‘Olive Tree’ to replace the present LDP government.
It cannot be ruled out that an ‘Olive Tree’ type government could take power. There is massive discontent with the LDP and big support for new elections. If such a government comes to power with the CP involved, an unprecedented period of upheaval within the party will develop.
Japan has entered a stormy economic and political period. The depth of the crisis is indicated by an article in the British Sunday Telegraph: "Japan has a savings mountain - but much of it has been moved overseas. Japanese households are obsessed by the collapse in the value of, and income from, their retirement savings. A dollar millionaire in Japan eight years ago now faces retirement on an annual income of barely $2,000 - the result of the slump in equity values and low yields on domestic bonds. Returns on capital are derisory: the long-term interest rate is 1.5 per cent, the yield on the Nikkei is 0.9 per cent. In a scramble to secure higher yields, Japanese households have pushed a colossal $685bn offshore - much of it into US Treasury bonds."
The consciousness of the masses is very confused. It is clear that the self-employed, other sections of the petty bourgeoisie and, probably, some workers in the first instance blame the financial crisis on the ‘bad management’ of the Japanese government. One taxi driver complained to The (British) Guardian: "The ministry of finance is responsible. They should get rid of the bad loans at the banks." However, this will soon change as the recession bites and the masses begin to see the brutal side of Japanese capitalism.
Even Vietnam is on the eve of convulsions. An unprecedented struggle has broken out in the ruling party over which direction the country should take. A clear pro-capitalist trend exists in the majority of the bureaucracy but is being resisted by a section which wants to see the party ‘democratise’, but at the same time declares that, "the market economy was incompatible with a socialist orientation". Given the processes in China and elsewhere, it is unlikely that Vietnam will be able to hold out from the process of a return back to capitalism and the liquidation of the planned economy.
Asia expresses in a very vivid form the Marxist law of ‘combined and uneven development’. We have countries in the grip of extreme underdevelopment in which the tasks of bourgeois democratic revolution have not been carried through. We have, on the other hand, newly industrialised countries, like South Korea, in which most of the tasks of the bourgeois democratic revolution were carried through under the aegis of US imperialism.
Australasian crisis
But at the same time, the fate of Australasia - Australia and New Zealand - is intrinsically linked to developments in Asia. These countries in the post-1945 period, enjoyed some of the highest living standards in the world. Australia is the ‘lucky country’. However, this has not always been so; Australia had one of the highest unemployment rates in the world in the 1930s, being badly affected by the world economic crisis and depression. Now history seems to have turned full circle with both countries witnessing the immediate effects of the crisis.
The collapse in commodity prices has had an effect on Australia with its exports set to fall in 1998 for the first time in 20 years. Once reliant on the British market, the Australian capitalists successfully switched to Asia, particularly to Japan, which is its largest trading partner and takes nearly a third of its exports. Exports grew by 7.2% last year but are due to drop dramatically this year. Commodity exports account for nearly two-thirds of Australia’s total exports, which, in turn, represent about 22% of gross domestic product. Compounding Australia’s problems, the Japanese capitalists have begun to cash in their investments in Australia’s capital markets. The current account deficit is likely to swell to 6.5% of gross domestic product as its exports drop and its currency collapses.
This, in turn, together with the collapse in Japan, has undermined New Zealand and particularly its currency, the dollar. The economy in New Zealand actually contracted by 0.9% in the first quarter with economists warning that the country was "halfway down the road to recession". Asia takes 37% of New Zealand’s exports. Consequently, the right-wing New Zealand government, led by Jenny Shipley, has promised a further savage cut in government spending. This comes months after promising to keep spending up, and increase it somewhat, as the condition for keeping the minority party, New Zealand First, within the government. New Zealand has the highest number of homeless people of any of the ‘advanced industrial countries’.
Even before the Asian crisis began to bite, the employers and the government in Australia began to unload responsibility for the crisis on the shoulders of the working class. The attempt to break the power of the wharfies - the Australian dockers - was part of this. The workers won a marvellous victory, which was sold out by the trade union leadership. Inevitably the employers and government are already extracting revenge.
Into this already heated situation has come the crisis for the Australian bourgeoisie and government provoked by the relative success of Pauline Hanson’s ‘One Nation’ party in Queensland. She has fed on the joblessness and insecurity of the rural and regional population as well as the fear that, under a new law, Aboriginal people will be able to take back some land and farms stolen from them by the colonial plunder of the past. The ruling Liberal National government was prepared to sup with the devil and lean on Hanson in order to undermine its political opponents. However, Hanson’s heady brew of racism, protectionism and virtual autarchy is very risky for Australian capitalism. The spectre of a flood of ‘Asian immigrants’ drowning Australia’s ‘Anglo-Saxon majority’ endangers Australian capitalism’s relations with Asia itself. In the Queensland election in June "business, which knows how important Asia is to the state, prefers a Labor government". This compelled Howard to distance himself from Hanson but not before the Labor Party had won the election in Queensland.
It is the small but significant forces of the CWI who have played a key role in highlighting the policies of One Nation and given a real lead to the labour movement.