Japanese Communist Party Chair Shii Kazuo on January 4 delivered a speech at the New Year assembly at the JCP head office in Tokyo. Below is the first half of the speech:
Happy New Year to all of you present in this assembly and to everyone watching this New Year Assembly via the communication satellite broadcast system throughout Japan!
We have entered an historic year in which we will engage in a general election, a political battle that will provide a good opportunity for the JCP to emerge victorious if we use all our abilities and energies of the party and the JCP supporters' associations. I would like you to share in the determination to achieve without fail a JCP advance in the election no matter when it will be held, while working to reduce the hardships affecting many people and drive the Liberal Democratic-Komei parties' government into a corner by using the force of speech.
Let me take this opportunity to speak about the prospects for our struggles this year by making clear the present situation of Japan and the rest of the world, as well as the present status of JCP activities.
A general review of the situation in Japan shows that LDP politics has finally reached a real impasse, suggesting the advent of a new historic era in which LDP politics is about to be displaced.
The LDP government after World War II evolved with financial circles and the business sector as its control tower in domestic politics. It has been maintained subservience to the United States, the control tower in Japan's diplomacy. These two control towers are now failing. This is the root cause of the present serious crisis that LDP politics has never experienced before.
Let us look at the first "control tower" in domestic policy, which works in the interests of Japanese business circles and large corporations.
Japan's capitalism is conspicuously "without rules." In addition to this, "neo-liberalism" aiming for large corporations' endless quest for profit in every field has made the entire Japanese economy extremely fragile. This is why the Japanese economy has been seriously affected by the global financial crisis.
The economic downturn in Japan, triggered by the ongoing global financial crisis, takes on a new feature: the Japanese economy is rolling downhill at a surprisingly high speed. This was confirmed by the "mini-Economic Survey of Japan" published by the Cabinet Office late last year. It uses such expressions as "rapidly and increasingly severe economic recession," or "downturn with unprecedented speed".
Why does it happen? I think there are three factors.
The first point I would like to make is that the rules regarding employment for workers to work with dignity have been destroyed.
In the past, an economic downturn would begin with a collapse of the stock market, followed by declines in demand and a shrinking of the jobs market. In the present crisis, when share price dropped in September last year, major companies began to lay off temporary and fixed-term contract workers, causing a job-cut competition. As a result, the employment situation has greatly deteriorated.
It is due to the deregulations through the adverse labor law reforms. The number of contingent workers has rapidly increased, creating a society that allows companies to lay off workers at a rapid pace. This has given rise to a vicious circle of the worsening employment situation and economic slowdown. It will cause distress to the Japanese economy and society in the future as well as dim the prospects of business circles and large corporations.
I want to emphasize that those forces that forced out hard working people who have endured harsh working conditions and put them on the street in this cold weather have no future.
The second point is that Japan's economy has increased its fragility due to the economic policy of heavily depending on foreign markets, in particular the U.S. market.
Under the 'structural reform' policy, increasing the large corporations' international competitiveness was supposed to strengthen the Japanese economy.
As a result, while a handful of large corporations made record high profits, workers' wages have been cut, and full-time workers have been replaced with temporary workers. In addition, tax increases and cutbacks in social services have deteriorated ordinary people's living conditions.
After many years of the distorted policy enabling companies to gain profits in foreign markets at the cost of domestic demand, both the Japanese economy and large corporations have become vulnerable to external shocks. Due to this weakness, the Japanese economy has been seriously affected by the U.S. economic failure as well as the global economic recession. If Japan continues with this policy, its economy will have no future. Japan now needs to change its economic policy into one that is driven by domestic demand.
The third point is that the Japanese stock market has become a market for financial speculation that relies on foreign capital.
Since the financial 'Big-Bang' by the Prime Minister Hahimoto Ryutaro Cabinet in 1996, foreign investors, mainly from the U.S., have come to account for 60-70 percent of the trade at the Tokyo Stock Exchange. Half of them are hedge fund managers. Their only aim is to maximize their profits through short term speculative trading. They are not concerned about the Japanese economic growth and are have no mid- or long-term plans to assist Japanese companies.
In the financial meltdown, hedge fund managers sold their stocks at distressed prices. This caused a stock-market plunge and dealt a serious blow to the Japanese economy and people's living conditions. The speculative market also plays an influential role in enticing large corporations to join the competition with each other to reduce the labor force.
As I mentioned, Japan's economic and market structures that heavily depend on foreign demand and foreign investors are the cause of the extreme vulnerability of the economy that makes the economic downturn steeper than ever, causing throughout the nation, unprecedented hardships.
I must stress that these difficulties represent an unknown to the financial circles and large corporations. When I met with Mr. Shinagawa Masaharu, permanent director of the Japanese Association for Corporate Executives (Keizai Doyukai) at a meeting of coordinators of the National Progressive Forum for Peace, Democracy, and Progress (Kakushinkon) last year, he said, "The financial circles are at a loss and do not know what to do now."
I had the same feeling when I met with executives of the Japan Business Federation (Nippon Keidanren) and major corporations. I said, "Isn't it suicidal for corporations to compete with each other for job cuts in the face of the difficulty caused by the global financial crisis? Isn't it unacceptable for firms to fire workers while increasing dividends to shareholders?" They did not refute my argument. In the face of the devastating consequences of neo-liberalism and subordination to the United States, the financial circles and large corporations are unable to determine what the future will hold.
A sea change has taken place in relations between public opinion and the business and financial circles. In the 1960s and the 1970s, the financial circles and major corporations refused to accept responsibility for the industrial pollution and environmental destruction of their making. They were engrossed in dishonest business ventures involving buying up and hoarding supplies to take advantage of the "oil shock" as the golden opportunity for maximizing their profits. The overly greedy corporate behavior caused alarm and criticism of the social irresponsibility of large corporations spread throughout society.
The Ad Hoc Administrative Reform in the early 1980s changed the social atmosphere. The "reform" policy was commanded by Doko Toshio, the then chairman of Keidanren. A major campaign prevailed Japan, in which large corporations were praised as role models for all workplaces and homes in Japan. Mr. Doko and his wife eating dried sardines as the main dish for dinner were televised, and all people in Japan were told to follow their example. Thus, the financial circles and large corporations succeeded in restoring their place in society. Using their restored power, they then promoted policies in their own interests at the expense of people's living standards.
Now, a change is underway. Social criticism of the socially irresponsible behavior of the financial circles and large corporations is increasing again. Large corporations, which have made huge profits even during the economic recession, amassed enormous internal reserves and generously paid profits to large shareholders. They are now depriving their workers of jobs and housing. Isn't it outrageous that they totally ignore their social responsibility? At the mounting severe criticism, the financial circles and large corporations are now about to lose the social status they had restored with difficulty.
This is the present state of the financial circles and large corporations which have long operated as the control tower for Liberal Democratic Party politics. Now when the world economic crisis is severely exposing the distortion and fragility of the Japanese economy, with their policies going bankrupt, they have lost prospects for the future and are alienated from the public.
The JCP position of confronting head on their outrageous actions is increasingly effective. The JCP call for a shift from dependence on exports to domestic demand as the first course of action has become what all parties, ruling and opposition alike, should agree to.
The JCP programmatic perspective for correcting the present "capitalism without rules" is winning social approval. Let us have confidence in this emerging major change and struggle together to mark a big step forward this year toward an economy abiding by rules.
Now, I would like to examine the other control tower for the LDP government, the United States.
After World War II, the JCP fought against two major hegemonic powers, the former Soviet Union that collapsed 18 years ago and the United States, whose failure became obvious last year.
The Soviet Union's failure was not assurance that the U.S. will be able to maintain its global supremacy for good. It paved the way for the Western countries (other than the U.S.), developing countries, and countries aiming to achieve socialism to free themselves from the spell of the rivalry between the two major hegemonic superpowers. This gave the world hope for change.
With one of the two hegemonic powers gone, the world became free to criticize the United States, the remaining superpower. The new global dynamism that emerged in the aftermath of the collapse of the Soviet Union has helped to isolate the United States. The recent major failure of the U.S. can mark the beginning of a complete failure of U.S. hegemony, both militarily and economically.
The U.S. failure in Iraq dealt a crushing blow to its military hegemony. The Bush administration, which ignored the United Nations Charter in its rush to invade Iraq, is now completely isolated in the world. In the presidential election, American voters said "No" to its war policy. President George W. Bush said that the biggest regret of his presidency was flawed intelligence (that Iraq had weapons of mass destruction). During his tour of Iraq late last year, an angry Iraqi reporter threw his shoes at him.
Although it is too early to predict what the new U.S. administration under President Obama will do, it would be safe to say that the present-day world will not allow the U.S. to easily exert its preemptive strike strategy while ignoring the United Nations.
How about the U.S. hegemony in the economic sphere, which has been behind its prosperity? The present economic situation represents the failure of U.S.-driven "casino capitalism." The policies of financial liberalization and deregulation to the maximum extent have triggered the burst of the economic bubble as a consequence of an extraordinarily swollen amount of speculative money, followed by the destructions of the real economy and people's living standards.
It must be noted that the big bang took place in the United States, the world headquarters of capitalism. As a result of this, capitalism American style lost the trust of the world and is under severe criticism.
Now, bells are ringing for the funeral of the predominance of the U.S. dollar over the world economy. Specifically, the U.S. has made full use of the International Monetary Fund (IMF) and the World Bank in order to push its economic policies of its neo-liberalism and market fundamentalism. By heavily depending on the dollar's supremacy as the key hard currency, the U.S. has continued to lay off its huge current-account deficits to the outside world and at the same time stripped vast assets from all over the world.
The power of the U.S. dollar, however, has been unprecedentedly declining. From the economic outlook, U.S. unilateral hegemonism is also on the verge of collapse.
Last year not only marked the beginning of the end of the remaining hegemonic power. It also saw powerful movements increasing and growing in strength in the quest for a new international order.
Concerning regional communities for peace, I stated at last year's New Year assembly that the Treaty of Amity and Cooperation in South East Asia (TAC) promoted by the Association of Southeast Asian Nations (ASEAN) is increasing the number of participants in the Eurasia Continent. In December 15 last year, the ASEAN, the driving force of this current, put the ASEAN Charter into effect. Working for the establishment of an ASEAN Community in 2015, it has made a further advance.
Right after this event, we got important news from Brazil in December. All 33 nations in the North and South American continents except the U.S. and Canada gathered in Brazil and held the summit meeting of Latin American and Caribbean countries on December 16-17, where they agreed to create a new multilateral organization by February 2010. The summit declaration stated that member states "reiterated their commitment to build a fairer, equitable, and harmonious international order based on international law and the principles of the Charter of the United Nations, including equality of sovereignty of the States, the peaceful resolution of conflicts, the respect to territorial integrity, and non-interference with the internal affairs of other states." The move that started in South America to become truly free from U.S. control and establish a regional community for peace has expanded to Central America and the Caribbean. Spain's major newspaper El Pais wrote in its editorial, "All this is expressed in the message that we are no longer the backyard of any country."
Countries that had been referred to as "the U.S. backyard" for a long time have now proudly declared that they are no longer someone's backyard but that they are key players in world politics.
Furthermore, concerning a framework of the international economy, the U.S.- and developed countries-centered framework has become outdated, and the current call for a new economic order is developing with newly emerging and developing countries. G8 countries cannot properly respond to the worldwide financial crisis that broke out in the U.S., and the financial summit held last year was participated in by 20 countries. This was described by U.N. General Assembly President Miguel d'Escoto Brockmann as the beginning of the "G192" (all U.N. member states included).
As we have seen, the major current in the present world is to seek independence by refusing to follow any major power and deciding their own course without outside interference. In these circumstances, should Japan continue to regard its military alliance with the U.S. as absolute and the U.S.-style capitalism as its model as well as continue its subordination to the U.S. without having any independent diplomatic or economic strategies? Such a way does not bring any bright future prospects.
The failure of the U.S. economic hegemony is also the failure of the associated strategies of the Japanese business circle and large corporations since they were created based on the U.S. economic hegemony. U.S.-style capitalism lifts all restrictions on the movement of capital and leaves everything to market forces, brings money from savings to investments, calls for a creation of finance-based nation, and promotes U.S.-style management that prioritizes dividends to stockholders. Whether or not Japan should continue to follow the path of U.S. capitalism is being called into question even among business leaders, as we are facing the rapid expansion of poverty and social gaps domestically and the failure of "casino-style capitalism" throughout the world.
A major change in Japan's course proposed by the JCP Program ? to break away from the subordination to the U.S. ? is becoming the realistic and imminent task to accomplish. The JCP has consistently called for the abrogation of the Japan-U.S. Security Treaty and establishment of equal and fair relations with the U.S. as well as the creation of a genuinely independent and peaceful Japan making full use of its peace Constitution. Let us hold this banner up even higher. (To be continued)
- Akahata January 6, 2009