From the article of 'Petrel'
No.663 / January 25, 1998

Please send us your opinion and the impression about this article without reservation.

INSISTENCE

Is it a reasonable policy for business condition?

Discussing the editorial of Japanese Economic Newspaper again.



An argument how we should recover bad business condition is prosperous during appearing even ruptures of urban banks. Among them we want to introduce the representative of popularized opinions. Japanese Economic Newspaper ( November 16th ) listed the editorial of the title called " government should shape the reasonable policy for the recovery of business condition. ". Until now we discussed about a fundamental opinion of this mass media many times. But we discuss again because they discuss it in various shapesand various points of view. It is worth to understand deeply and solve the current economical problem.

The base of their insistence is the following. Lighting the regulation and increasing taxes which was one of Hashimoto's policies is contradictory each other. Even though the government alleviate the regulation, lighting the regulation associated with increasing taxes kills an effect of it. So they recommend to light the regulation and to reduce the tax of 9 trillions on the other hands. Lighting the regulation is one of Hashimoto's policies. Lighting the regulation connected with magnificent tax reduction activate the private enterprise and influence to recover the business condition. These thinkings were proved through the experiences of USA and England. They insist like these. Especially they are eager to reduce the corporation tax to activate the enterprise activity. This content discloses whether Japanese Economic Newspaper represents any class or not.

A source of revenue is the problem. Now Japan is in financial trouble. The big tax reduction is impossible. Anybody know this fact. They say easily as follows; the budget for a public enterprise should be cut down.The budget for a public enterprise increased extremely during this recession. But how business condition had been looking up. The fact that this method was not effective would be clearly shown. Money should be spent for tax reduction, not for the public enterprise. If this method is not effective, the "red-ink" public government loan should be adopted. Mr.Hashimoto's policy in which he plans to reduce "red-ink"government loan is harmful to economic state and this is one of the reason of recession. They insist like this and insist that Mr.Hashimoto's economic policy lack consistency.

But the thinking for the recovery of business condition is not consistent with denying the publication of government loan and the expansion of the public enterprise. There should be a conflict between denying constructive government loan and acknowledging the "red-ink" government loan. They say that the public enterprise dose not contribute and tax reduction dose contribute to the recovery of the business condition. There is also a conflict in these opinions. Why they can affirm that tax reduction for consumption increase the demand though public enterprise dose not increase the demand? They say that the effect of the magnificent budget for the public enterprise since 1990's is unable to be confirmed. And tax reduction might show the same result. We can confirm the only conclusion that the current recession and management crisis can not be solved easily through a big public enterprise and 9 trillions tax reduction.

The optimistic insistence in Japan Economic Newspaper is as follows; It is necessary for the improvement of market economy and business condition through the private enterprise having the initiative to alleviate the regulation and reduce tax magnificently. If private enterprise can get a lot of money through tax reduction, economic activity in market can improve naturally. But there would be many methods to offer a lot of money for the private enterprise except for tax reduction. The expansion of the public enterprise through government loan is one of methods. Credit expansion also can bring the same effect. Their opinions are incompatible.

Money has been offering by various methods. But economic activity merely became atrophic and smaller.The essential problem is more radical. There is the accumulation to excess and overproduction in capitalism. This is the reason why this conflict disturbe the improvement of economic condition.

There is only a methodological difference between the opinion in Japan Economic Newspaper and the other opinions. Basically both opinions are not opposite and not inconsistent. The only difference is as follows; the former is trying to produce the profit rate of capital directly. The latter is trying to make the demand and the market for the capitral through the expansion of public enterprise and contribute the profit of capital.

The thinking of dissolution of the capitalistic conflict through alleviation of regulation, tax reduction and accomplishment of economically free competition is utterly ridiculous. This is the dogma of new-liberalism.

Actually the conflict in capitalism grow more and reach the limit of the inconsistency. This situation might become fierce a panic and recession.This might accomplish the law of the struggle for existence and expand the crisis of enterprise and unemployment of workers.

The thinking that Keynes principal is wrong and new-liberalism is right is in fashion. But worker must break not only Keynes principle but also new-liberalism. Especially worker must break new-liberalism. In this thinking tax reduction is good, but public enterprise is bad for the economical improvement. And constructive government loan is good, but "red-ink" government loan is bad. But these opinions show that thinking of new-liberalism is the evidence of logical and practical failure.