Going Postal
According to the Financial Times, the fondest dream of Japanese prime minister Junichiro Koizumi has been to privatize Japan’s massive postal service. It is not hard to see why. In a nation where $12.96 trillion represents the total personal assets of the citizenry, the postal service’s holding of $3.24 trillion is a sizeable chunk of cash. The prime minister wants to put that money back into private hands and, presumably back into Japan’s cash-starved economy. The Japanese parliament said no, so now its members are out of a job, at least until September 11, when new elections are slated to be held.
Privatization (constantly referred to as “reform” by a risible press) is still the watchword throughout the developed world, and, though only a bare majority of voters favor Mr Koizumi’s scheme, it will likely go through, either with or without him. For Japan’s capitalist class, there is no alternative; it must satisfy its insatiable thirst for new sources of capital, or perish.
But, what of ordinary people? The postal privatization scheme has all the earmarks of Russian casino capitalism; the public stands to lose not only the three-something trillion, but a lot more if a privatized behemoth like the postal service become insolvent. There is of course widespread cynicism concerning the whole affair. The Japanese postal service has long been a reservoir of patronage and influence-peddling for the well-placed within the country’s Liberal Democrats, Japan’s ruling party practically since the end of World War II.
In the end, the artful practice of privatizing and then looting state-run enterprises will share the fate of its counterparts in eastern Europe, the difference being the amount of time required to do so. During this interregnum, the baleful effects of “reform” may outstrip the sluggish pace of privatization at which the neo-liberals are now forced to march to. This is the growing difference from the earlier era of neoliberal reform. And what can be slowed and diverted can be stopped. And reversed. Already in eastern Europe and Russia there is talk of renationalization, especially in the energy and telecommunications sector. It may be that the forty-year trend of faclitating private wealth and public squalor is slowly–and somewhat painfully–drawing to a close.
The first acts of this drama may be played out in Japan after September 11, and the parliamentary elections. For whatever the result (the Japanese voter, digusted with the shenanigans long associated with Japan Postal, may opt to back Mr Kuizami; the election is simply too close to call right now), privatization will be a long and painful row to hoe. It can only get worse for the reformers in the years ahead.
Perhaps someone should tell them.
Jim F.
August 10, 2005 @ 6:36 pm
In Russia, as I recall, the huge energy corporation, Yukos, was acquired by the state-owned firm, Rosneft. At the time, Putin was quoted as saying that Rosneft was following free-market principles, which I guess shows, that Putin is not without a sense of humor.
Louis Godena
August 11, 2005 @ 11:19 am
There is a definite pattern here. The arguments for privatizing Japan Post echo those employed on behalf of “reforming” social security in the US. The system is large, unwieldly, expensive and liable in the future to catastrophic insolvency. In both cases, the government has borrowed heavily to finance entitlement programs for the rich, effected ill-advised administrative changes, and substantially politicized what originally was slated to be an apolitical social institution. Just go to Asahi.com or the editorial page of Nikkei Weekly and compare what is said there about privatizing Japan’s postal service to what the WSJ says concerning social security “reform”. But, as I remarked in the blog, privatization is merely stop-gap measure; it will save neither the economy nor the careers of those in the ruling parties in the long run. That is the bone that will ultimately choke all such reform schemes. You’re even seeing earlier indications of that in Germany.