FOREIGN AFFAIRS: by Peter WestmoreNews Weekly
Japan's new PM rejects 'market fundamentalism'
, September 19, 2009
The landslide victory of the Democratic Party of Japan in the recent general election has swept the Liberal Democratic Party into opposition, in the most significant change in government in Japan since the LDP was formed in the early 1950s.
The Liberal Democratic Party (LDP) had effectively ruled Japan for almost 55 years.
However, the combined effect of being in office too long, too close a relationship with big business and the bureaucracy, and the impact of the global economic recession, swept away the pro-American LDP.
The key figure in the new government is the incoming Prime Minister, Yukio Hatoyama, the grandson of a former Prime Minister and son of a former LDP foreign minister.
He graduated from the University of Tokyo, then studied at Stanford University in California to get a PhD in managerial engineering.
After graduation, he held academic posts, becoming an assistant professor at Senhu University, a humanities, law and economics graduate school in Tokyo.
Prime Minister Hatoyama was first elected to Japan's Lower House as a Liberal Democrat in 1986, but resigned seven years later, in protest against the lack of political reform in the LDP.
The party he established became part of a coalition which briefly ruled Japan in 1993, but it collapsed and the LDP soon returned to power.
In the late 1990s, he co-founded the Democratic Party of Japan through the merging of several opposition parties, and has therefore had lengthy experience both in government and in opposition.
In the recent election, the Democratic Party won a clear majority in the Lower House, but will depend on a coalition in the Upper House to get legislation through the Diet (parliament).
The party's victory had much to do with voters' anger against the LDP over its handling of the economic slump and the rising unemployment rate.
Although Japan is a major exporter, the government runs chronic deficits, now totalling 200 per cent of GDP, and the Democratic Party has promised to spend more.
To address the crisis of Japan's declining fertility rate, the Democratic Party has promised a generous child allowance. It has also promised to make secondary education free and university scholarships more plentiful.
For the elderly, it has promised to increase the pension to about $700 a month, and the unemployed will be paid about $1,000 a month while retraining.
The problem for the government is that unemployment has risen sharply during the global financial crisis, and employees have suffered a massive decline in income over the past year. According to official figures, wages fell by over 7 per cent in the year to June.
Yukio Hatoyama blames American-style free market fundamentalism for the financial crisis.
In a recent article entitled "My political philosophy", published in the September issue of the Japanese monthly, Voice
, he wrote, "In the post-Cold War period, Japan has been continually buffeted by the winds of market fundamentalism in a US-led movement that is more usually called globalisation.
"Freedom is supposed to be the highest of all values, but in the fundamentalist pursuit of capitalism people are treated not as an end but as a means. Consequently, human dignity has been lost.
"The recent financial crisis and its aftermath have once again forced us to take note of this reality. How can we put an end to unrestrained market fundamentalism and financial capitalism that are void of morals or moderation in order to protect the finances and livelihoods of our citizens? That is the issue we are now facing."
The new Prime Minister added: "If we look back on the changes in Japanese society that have occurred since the end of the Cold War, I believe it is no exaggeration to say that the global economy has damaged traditional economic activities and destroyed local communities.
"Our responsibility as politicians is to refocus our attention on those non-economic values that have been thrown aside by the march of globalism. We must work on policies that regenerate the ties that bring people together, that take greater account of nature and the environment, that rebuild welfare and medical systems, that provide better education and child-rearing support, and that address wealth disparities.
"This is required in order to create an environment in which each individual citizen is able to pursue happiness."Refocusing priorities
The challenges he faces are formidable, not least that China is emerging as the greatest power in Asia, where he wants to refocus Japan's priorities.
He concluded, "I believe that integration and collective security in the Asia-Pacific region is the path we should follow. ... It is also the appropriate path for protecting Japan's political and economic independence and pursuing our national interest from our position between two of the world's great powers, the United States and China."