From: jcliu@four-lab4.Berkeley.EDU (James C. Liu)
Newsgroups: soc.culture.japan
Subject: Re: DOES AMERICA SAY YES TO JAPAN? - Off track!!
Date: 5 Jan 1993 03:42:49 GMT
Organization: UC Berkeley Dept. of Nuclear Engineering
NNTP-Posting-Host: four-lab4.berkeley.edu

In article <C0Cz4r.2yM@world.std.com> cmr@world.std.com 
(Charles M Richmond) writes:

  >I think that it is more accurate to say that the Japanese people have been
  >hurt. The move on the part of "Japan" toward economic hegemony first imposes
  >its costs on the Japanese people in order to gain advantage on others. This
  >leads to such seeming contradictions as a disastrous home economy at the same
  >time as record trade imbalances.

Couldn't agree more.  And if you look to the recent past at other 
developing nations like Taiwan, Singapore, Korea, China,etc, they pretty 
much follow similar economic formulas for converting the labour with 
their nations into hard currency.

Undeveloped countries rely on what I call the "solar" conversion
economic cycle.  These countries are mostly agriculturally based nations
which rely on the farmers (or the sun) to grow enough food to feed every 
one.  Some division of labour must exist between the means of food
production and the labour made available for export (or exploit) to/by
other nations.  The government, if it has control over the people, pays
it's labour force with food and then collects hard currency from the
developed nations which have exploited the cheap labour.  The smaller
the percentage of labour needed for agriculture, and higher percentage
of labour available for exploitation, the higher the rate of
foreign capital aquisition.

Semi-developed and developed nations rely on a protected home market, 
internal price fixing, and trade barriers to maintain a net income of 
foreign currency.  Protecting the home market using trade barriers allows
the industries and government (assuming they have control over the 
consumers) to set artificially high prices inside the country.  In 
essence the consumers work for less pay because whatever they make, 
they get screwed when they end up paying extremely high prices which 
go back to the company.  How this helps the companies maintain net 
income of foreign capital is through exports at lower costs (e.g. 
dumping.) Again, there is no such thing as a free lunch.  The country
gains foreign capital assets, but the consumers in that country must
pay higher prices to maintain that.  The higher the differential 
between domestic and export prices the great the efficiency of 
labour exploitation and greater the rate of foreign capital influx.

The danger in maintaining an exploitative-export economy is that if a
nation's best foreign trading partner (in Japan's case, the U.S.) has 
an economic downturn and reduces it's purchases of that nation's goods,
the economic multipliers are very high due to the double effect of
lack of income to help finance the initial capital investmest which
allowed for the exports (which jacks up prices even more), and then
the subsequent lost of disposable income by the consuming population.

Japan is a good example of this exploitative-export economy as Mr. 
Richmond pointed out.

Jaa, James
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