Creeping Socialism (PART 2) - Values are What Man's Economic Activity is All About

Tuesday, February 24 2009 @ 11:29 AM JST

Contributed by: Y.Yamamoto


Westerners still blindly believe in the
myth that the hogwash disseminated by
such dumbs as Mao Zedong or Joseph
Stalin has something to do with Marxism.
Presumably this ignorance has made the
hotbed for Obama's cheap socialism.

Many books have been written on why and how Japan's bubble economy burst in the early 1990s. Now a myriad of words are being spent on the meltdown of financial markets in Wall Street and the global depression it allegedly triggered, to explain why and how the most recent bubble bust.

However, we are learning practically nothing from these lectures because it's an utter truism that any bubble is doomed to burst sooner or later. There is no such thing as a sustainable bubble.

The real question, therefore, is why and how the bubble had to form, to begin with.

Professional pundits who tend to scratch the surface would readily answer this question by attributing the current crisis solely to the greed prevailing in the financial market in Wall Street or anywhere else. But I think they are oversimplifying the issue.

My American Heritage Dictionary defines greed as "a rapacious desire for more than one needs or deserves." But do we know a person who doesn't have greed as it is defined there?

Actually the core problem lies in man's desire, rapacious or not. But desire for what? We all have desire for many worldly things, including money of course. The materialist way of thinking is also centered around desire, but it cannot really explain the driving force of man's economic activity because materialists tend to get around the value issues. Although we are all drowned in the endless chain of means, the ultimate object of our desire is the purpose of life, which is sometimes referred to as "values."

I know that the Americans and Americanized people are not good at abstract thinking because they have an allergy to philosophy. But I don't think we can get around the question of what man's values are in the face of the ongoing crisis.

To make it even more difficult for these people to identify the real issues, they also have an allergy to Marxism. American Marxist Leo Huberman (1903-1968) used to lament that all his compatriots knew about Marxism was that it was a horrible thing. Maybe they were, and still are, mixing up the German political economist with such dumbs as Mao Zedong and Joseph Stalin.

But I think I must cite some important thought on the value-creating chain from Marx's writing because he is the first, and perhaps the only, thinker to have shed light on the basics of man's economic activity in the industrialized world. So-called socialists see virtue in production, or labor, while they always use the word consumption with a negative connotation. At least they think consumption is a necessary evil. Marx's way of thinking is 180-degrees different from such a puerile asceticism.

In 1857 he wrote:

"Production is thus at the same time consumption, and consumption is at the same time production…. Production leads to consumption, for which it provides the material; consumption without production would have no object. But consumption also leads to production by providing for its products, the subject for whom they are products. The product only attains its final consummation in consumption. A railway on which no one travels, which is therefore not used up, not consumed, is potentially but not actually a railway. Without production, there is no consumption, but without consumption, there is no production, either….”

To paraphrase these roundabout sentences, the consumer of someone else's creation gives an added value (a “finishing touch” in Marx's words) to the product before he changes roles from receiver to sender and passes it on to the next link in the value-creating chain. Each time the product changes hands, a new value is realized - but only when the receiver actually consumes it in a productive way.

We can learn from him that a bubble forms when the value-creating chain becomes disrupted and that even after its initial burst, it will re-form itself over and over as long as people's sense of values remain unrestored.

Japan's bubble formed in the 1970s through the 1980s is a good example.

According to Ben Hills, author of Princess Masako - Prisoner of the Chrysanthemum Throne, the vast estate owned by Japan's imperial family in the heart of Tokyo was "worth more than [the entire nation of] Canada at the height of Japan's Roaring Eighties bubble." Gordon G. Chang makes a different comparison in his Nuclear Showdown: "[It] was valued at more than all the real estate in California."

The astounding figures, as such, were not necessarily problematic. I have nothing, whatsoever, against wealthy people living in such a stately place. What was really outrageous about Japan's Imperial Palace is the fact that the demigod, who drove his 3 million subjects to death for the absurd cause of preserving Japan's polity centered in the Imperial Institution, was living his empty life there, along with his immediate kin and servants, after artfully evading his war responsibility four decades earlier. Marx might have said: "Until the palace has dwellers who really deserve it, it's not a palace." The real problem lay in the fact that what does not deserve to be called a palace was valued as much as Canada or California.

The first wave of Japan's bubble burst when real estate prices plummeted. There was literally nothing left after the bust. This couldn't have happened in any other country. Ever since the bust, the people have started developing a striking resemblance to the particular zombie who is exquisitely defined by the Constitution as the Symbol of National Unity.

The Japanese government kept claiming all along that the country had been getting back on the right track citing the ¥46.7 trillion measures to bailout financial institutions as the main reason. But the 12.7% negative growth of GDP in the last quarter of 2008 indicated that the country was one of the hardest-hit among industrialized nations in the wake of the current crisis. This is a telling evidence that Japan's value system had remained unfixed and as a result the country is still extremely susceptible to financial difficulties, homegrown or not.

Another evidence is the fact that even after the first bust, Japanese consumers continued their buying spree with an unsatiable appetite for top-brand luxuary goods such as Louis Vuitton handbags. According to a 2004 survey conducted by Merrill Lynch, Japan sale for highend marketers peaked at U.S.$16 billion in 1996. After that, the sales somewhat slowed down, but in 2003 the Japanese people were still buying luxuary products worth U.S.$ 10.8 billion, accounting for 40% of their worldwide sales.

The astounding figure for 1996 was 7 times Mongolia's GDP for 2005. I don' know politically correct words to describe these people who bought that much of pricey junk even after the burst of the bubble.

Even after the second bust, wealthier Japanese keep looking around insatiably for false values while an increasing number of the poor are going homeless, jobless, seeking refuge at internet cafes, or killing themselves. Last week Nokia, Finnish cellphone maker, announced a plan to open a highend handset outlet in central tokyo in anticipation of a smash hit. A report has it the retail price of the most luxury cellphone to be sold there is ¥6 million ($64,000) apiece.

Japan has never been a capitalist or socialist state in the sense these words are construed in the West. The entire nation has been cartelized and unionized from tip to toe since a long time ago. And yet, the same thing can happen in the U.S. or a European nation, if the country hesitates to address the real issue with the lost sense of values among its people.

Creeping socialism will fatally undermine the foundation of a country by quickly eating into its people's hearts and minds. To put it bluntly, cheap socialism like Obama's is likely to lead America to a catastrophe.


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