Problems of Japanese Competition (1952)

From the March 1952 issue of the Socialist Standard

Since 1945, when Japan decided to cut her losses in the "hot” war by surrendering to the Allies, she has steadily regained the position of workshop of Asia which she held before the war. A turning point in the post-war history of this country of 85 million people was in 1948 when the American Government decided to stop pouring millions of dollars into the vain attempt to bolster up the dying Chiang Kai-shek regime on the mainland of China. Instead the main Far-Eastern investment of the U.S. capitalist class was switched to Japan which, it was hoped, would help to arrest the growth of the Eastern bloc of nations under Russian influence. Last September the Japanese Peace Treaty was signed in San Francisco, and the scene was set for the emergence of Japan, under close American supervision, as a “sovereign” nation determined to find her place in the capitalist sun.

Straggle for Markets
The tremendous increase m the productive powers of the advanced industrial nations (especially of the U.S.) has helped to contract the world’s markets, which would in any case have been the tendency from the slackening of the demand to repair the ravages of war on world capitalism. We are approaching the point when the problems of cut-throat competition and unemployment through “over-production” will return as they did in the 1930’s.

Ever-increasing Japanese competition, not only in textiles but in metal goods, machinery and pottery, has been aggravated by the American-influenced decision of the Japanese Premier Yoshida to recognise Chiang Kai-shek in Formosa instead of the Mao Tse-tung regime on the mainland of China. If, as is more than likely, this has an adverse effect on Japanese trade with China, Japan will have to look elsewhere to sell her exports, and will no doubt cast covetous eyes on the markets in the British Commonwealth.

The inevitability of such problems as these within the present economic system and just how little their character is affected by the individuals who are mistakenly supposed to be in control of events can be seen from the following comment by a writer in the New York Times, Lindesay Parrott:—

  “The Japanese people, after six years of shelter behind a benevolent occupation, were learning that sovereignty soon would confront them with the 'guns or butter’ problem so familiar to other post-war nations, and they did not like the prospect.
   “In the face of hard world facts, Japan had little option other than to follow the path the Premier pointed out” (New York Times, 27-1-52.)

Sweated Labour
So far we have been concerned with questions of trade from the point of view of that class in whose interest trade is carried on. Let us turn to the position of the workers in Japan, who are pushed around like pawns in this grim game. In an article in the Daily Herald entitled “Made In Japan” Dudley Barker gave some interesting facts about their unenviable conditions:—

  “The labour force in Japan numbers nearly 37 million and the average working week is nearly 50 hours. For that the average worker gets a wage of £11 a month— barely enough to keep his family, even at a low standard of living (more than half of it goes in simple food).
  "In the textile trade the position is worse. Textile workers get between £5 and £7 per month (latest available figures) in a country where inflation is raging.” (Daily Herald, 28-1-52.) 

However, there are factors which tend to make profit-making a little more difficult for Japanese capitalists as a whole than they would no doubt like it to be. According to the terms of the San Francisco treaty Japan is to pay reparations, mostly to South-east Asian countries, and, to quote Lindesay Parrott again, “a South-east Asia, seething with resentment against Japan for what the Philippines and Indonesia consider their just due in war damages, would offer the worst possible field for this trade relation, vital to the Japanese economy.”

In the 1930’s Japan obtained most of her imports from Asia, which also absorbed the greater part of her exports. Lost sources of supply and lost markets there will have to be replaced by more costly sources farther afield and by greater exports to markets outside Asia. In addition to the problems directly connected with foreign trade the Japanese capitalist class will have to saddle itself with its own burdens of “defence,” now that their benevolent American protectors have decided to grant them sovereignty. Already mention has been made (New York Herald Tribune, 25-1-52) of a Japanese military force of 150,000 ground troops, 1,500 planes and 308 warships after the peace treaty goes into force.

Another interesting sidelight was thrown on the question by Mr. Anthony Greenwood in the parliamentary debate on the Peace Treaty:—

  “If, as we all hope, the Korean war finishes in the near future, this will mean another difficulty for Japan, because Japan has been prevented from exporting a large amount of textiles to markets where we want to sell our textiles, by the fact that she has been selling them extremely profitably to United Nations Forces fighting in Korea. Indeed, during the past few years Japan has become, ironically enough, the arsenal of democracy.” (Hansard, 26-11-51, col. 943.)

American journalists can thus point to the problems which face the Japanese capitalists, and they can affect a paternal attitude to their masters' comparatively new-found friends.

   “The principal fear expressed by members of Congress is that Japan, once on its own, will trade with Communist China. For the Japanese the problem is admittedly difficult. Though overwhelmingly anti-Communist, they must trade to live; and many of them fear that in South-east Asia competition with the British Commonwealth will be adverse.”

(New York Herald Tribune, 26-1-52, italics ours.) 

It is interesting to compare this attitude to Japan with that expressed by various propagandists on behalf of British capitalists who see in the growth of Japanese competition a serious threat to their profits. The threat of foreign competition is always accompanied by the demand that to meet it workers shall produce more at cheaper cost—harder work and a less riotously high standard of living are the watchwords the working class is exhorted to take up. It does not need much imagination to deduce from the similarity of the disease that the workers of Japan are being given the same sort of medicine as workers here, possibly with some slightly different ingredients necessitated by conditions in that part of the world.

The Grim Future
What are the future prospects for the workers in Britain and Japan, assuming that they continue to give support to the capitalist system? Let us take first the Japanese workers, whose doubling of their industrial output in the last four years has made very little difference to their miserably low standard of living. The following is from an article “ The Revival of Japan ” by D. Duxbury: —

  “The political and economic trend in Japan itself now suggests that some of the benefits of the Occupation in preventing excessive exploitation of labour may soon be lost. Trade Unionists during last year expressed to me their fears that the American attack on Japanese Communists might in suitable conditions be extended to become a witch-hunt reaching for any union leader or simple worker who had the insolence to stand for his rights or resist any worsening of wages or conditions. Present news from Japan confirms that industrialists are waiting for an opportunity to reverse the labour laws passed under American tutelage.”

(World Review, Jan., 1952.)

The rest of his article indicates that this writer is by no means sympathetic to the interests of the working class against those of their masters.

The Way Out?
We have drawn from the writings of others on the nature of the problems, so let us now try to see what solutions they put forward. They are all agreed that the standards of living in Japan and in the East generally must be encouraged to rise. They also agree that there is a huge potential demand for goods there, if only that demand could be made effective, i.e., if only the workers were given sufficient wages to buy back the things they produce. Here, for instance, are Dudley Barker’s views on this question:—

  “Of course the real solution is not to howl as Japan's manufacturing capacity gathers strength again, or quarrel over unfair competition, or fight for markets.
  “It is neither practical nor moral to try to prevent any nation from manufacturing goods. The sensible thing, by a world mutual aid plan, is so to increase the purchasing power of the huge masses of poverty-stricken people that they can absorb all that Japan, or any other nation, can produce as an addition to the world’s wealth.” (World Review, Jan.. 1952.)

This is typical of the approach of those who want to have capitalism without the problems to which it inevitably gives rise. Of course we shouldn’t fight for markets—but then a little knowledge of the world in which he lives should show Mr. Barker that it is in the nature of markets that they are fought for, “ peacefully ” if possible, and by force of arms if necessary.

A world mutual aid plan seems at first consideration to be a splendid idea, but, like all the seemingly practical schemes of reformers, it disregards the “facts of life” of capitalism. Now employers in certain industries may not mind other wages in other industries being higher, but they are in no circumstances in favour of higher wages being paid to their own workers—indeed it would be foolish to expect them to jeopardise their profits by doing so.

So, when we come to consider international trade rivalries, we see that British capitalists (or at any rate that section of them whose interests are affected by Japanese trade) are in favour of higher wages being paid to Japanese workers. But can anyone be naive enough to think that the Japanese employing class is in favour of paying more wages to its own workers than the minimum they can be forced to take?

Socialists contend that the only sort of mutual aid that will do the working class any good is that which spreads socialist knowledge. One of the paradoxes of capitalism is that workers must not only struggle, consciously or unconsciously with their immediate exploiters but they must also, on peril of losing their jobs, help the latter in their struggle with foreign competitors. The S.P.G.B., unlike its opponents who prefer to take an unreal view of the nature of the present economic system, sees no hope of any fundamental change in the pattern of boom, slump, war and preparation for war, so long as the workers of the world refuse to think for themselves and until they decide to have Socialism.

Stan Parker