INFORMATION SOCIETY (part3)
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5. TANSITION OF CAPITALISM
5-1 Outline of overall history
Medieval feudalism had the structure that was based on the feudal lords-serf relationship and covered with the Roman church. When its era had been coming to the end, commodity production had become active,the weight of the product distribution beyond the area of the feudal lords had become large,and noticeable occlusion of the feudal lords(=aristocratic layer) had appeared, further in the wake of the Crusades the feudal lords(=aristocratic layer) had exhausted and absolute monarchy had appeared.
In the absolute monarchy late following situation has been brought.National wealth is considered to be amount of gold and precious metals, so that, the mercantilist policies that increase the national wealth to secure the trade balance by the lower pricing of agricultural products and the protective policy of the industry and commerce is taken.While, against mercantilist, farmers protection policy based on the physiocrats in which advocated that only agricultural production is able to grow the value and commerce and industry is not value-creative only performing the processing and exchange of value object is raised.
After that, the commodity distribution had been further developed, and through the Manufacturing stage further increased in commodity production by the machine production system provided by the industrial revolution. At the same time,the labor force had become merchandise by formation of free labor released from the land in large quantities. As a result a free competitive capitalist stage had become, in which goods production becomes key industry along with the labor general becomes "value" and the funds to be subjected to the goods production become "capital",.
During from the end of the 19th century to the first and second World War, a joint-stock corporation system is formed with enormous increasing of the capital due to heavy and chemical industrialization of commodity production, following formation of financial and securities market, and further the exclusive financial capital which is consisted of trust and concern of which bank is the core dominate each national economy.Thus, the stage of monopoly capitalism (= classic imperialism stage ) in which national economies contend for the world's resources and markets each other is carried out.
After the Second World War, along with the former colony to independent politically, it becomes the era of East-West confrontation between the socialist countries around the Soviet Union and the West countries of the capitalist system centered on the United States.As for the West countries,under a state,referred to as "Pax Americana",of the overwhelming economic and military dominance of the United states, the new colonialism in which the former colonial countries is dependent on the economic domination system of the developed countries centered on the United states is deployed.While,there is a need to alleviate the labor conflict because of the East-West confrontation,so that Keynesian policies by which the state control the economy has been adopted.Thus,the state monopoly capitalism stage in which both of growth economy and welfare economics are carried out has become.
Since 1970, a limit or impasse of Keynesian policy is revealed,and economic policy is converted into a neo-liberal policy.In addition collapse of the Soviet Union in 1991 lead to foaming the global market,and with it combined the development of IT technology that can be advanced information processing, then global financial capitalism was formed.
5-2 Era of classical imperialism
In the overall structural change of capitalism mentioned above,now investigate by tracing back to the era of classical imperialism that is directly related to the specific understanding of the current situation.After the first World War, the gold standard that had collapsed has resurrected,and then the economy was revived. In the 1920s, greeted the boom that seemed to also as "eternal prosperity",but in the United States the agricultural recession had brought by the overproduction of agricultural products,and also on the other production has fallen into overproduction. Though,in that state the speculative fever increased, and on Wall Street, stock prices had been rising as so as bubble feeling. After then in 1929 it was happened the big stock market crash. Then the financial system was forced to stop by laissez-faire policy taken on the bankruptcy of failed bank, and further depression was propagated to the European countries by withdrawal of capital from Europe along with it. Thus the global Great Depression with a peak from 1932 to 1933 years was caused. In the recovery process from the Great Depression, each country of the Great Powers rushed towards the division of the world market by a forced expansion of demand due to an armaments race and formation of the economic zone, and it was caused the second World War of 1939-1945 years and consequently brought the end of era of the Great Powers imperialism.
The situation that in this way generates the Great Depression and in its reconstruction process rushed towards the second World War is indication that the inconsistency of the gold standard was beyond the breaking point. In addition, in 1936 during this period, "the general theory of employment, interest and money" of Keynes that becomes the theoretical support of the economic policies of the next era was published.
5-3 Era of East-West confrontation and the Keynesian policy
In 1944 during the Second World War, in order to resolve the inconsistency of the gold standard the Bretton Woods agreement was concluded. Then by the IMF system,fixed exchange rate system and the dollar standard backed up with the gold were enforced,and stable reconstruction and development of the world economy around the United States was desired.
After the Second World War, the most important factor which is to define the political and economic relationship between the world was the East-West conflict in which Eastern countries of the socialist system centered on the Soviet Union and Western countries of the capitalist system centered on the United States confronted each other. In western countries, in order to maintain the capitalist system, it is imperative to prevent the occurrence of depression and mass unemployment, so the adoption of Keynesian policies that can realize it was as inevitable.
The 1950s, in all industries the United States has been overwhelmed, funds due to the trade surplus, has been circulated to other countries by economic aid and military spending and private investment, which is representative to the Marshall Plan. Although in 1960 OPEC is organized that a significant impact on the world economy later, it was not possible to overcome the downturn in crude oil prices due to excessive supply at that time.
The 1960s, in the United States wages per person was higher than in other countries, so that the multinational commercialization was progressed and conglomerate boom to form a conglomerate of diversified management takes place, but basically domestic manufacturing work was the center of the economic structure. In addition, Japan was by the "income doubling plan" of the Ikeda Cabinet to enter the high economic growth path based on Keynesian policy, the Japanese economy was dramatically developed. As a result, later that, the Japan-US trade friction was raised against Japanese products, started from the cotton product to the more advanced industrial products in accordance with the development of the Japanese economy.
This era is the era of state monopoly capitalism, as seen in the theory of neoclassical synthesis represented by the "modern capitalism" written by John Strachey and the writings by Samuelson, in which the state (government) operate and maintain the economy and society rather than the market economy of the laissez-faire. it is the golden age of the economy by the Keynesian policy.
5-4 Era of stagflation
However, President Nixon in 1971 declared the exchange stop of gold and the dollar, it had occurred so-called Nixon shock. This was done for $ defense against large quantities have been flowing out by a budget deficit and trade deficit because of the war expenditure of the Vietnam War. But as a result that the dollar as a key currency has lost the support of the gold, the exchange system of dollar is to be shifted to a floating exchange rate system. It was tried to return to a fixed exchange rate system at the Smithsonian agreement, but had collapsed immediately. Here, the meaning of the Nixon shock is that the money embodied the value is completely away from the gold ie goods and become a indicator of the value that is consisted of information, and value is changed under informatization. In 1944, at the time abandoned the gold standard and adopted dollar-gold standard, it can be said that it was already inevitable that this happens.
In Japan, it was coped with causing a recession due to a strong yen rate in the floating exchange rate system by the handouts of the currency. It can be said that Economic expansion route by "the Japanese Archipelago remodeling Plan" of 1972, Tanaka Cabinet,is intended to suppress the strong yen rate by the inflation trend with the fueled economy.
In the these condition, in 1973,the OPEC triggered the 4th Middle East War declared that raise at once to more than five times in the 11,12 dollars / barrel of crude oil from $ 2 / barrel, as a result generated the first oil crisis in which worldwide inflation under the recession,that is stagflation,was led due to the cost increase by a jump in imported crude oil prices.It is prerequisite for making possible such unilateral price increases of crude oil that OPEC countries has grown by holding the dollar in the 1970s to have the power by shareholding made to price increases by $ 1 each year in the Riyadh agreement at becoming supply and demand of crude oil in balance and as abovementioned monetary value has been informatized away from the goods by gold-dollar exchange stop.
Stagflation thus generated was, unlike the recession due to excessive production, synergism of cost inflation and effective demand reduction due to the huge funds transfer to OPEC countries, essentially Keynes policy didn't cope with it. Nevertheless,it took the policy tightening fiscal and monetary against inflation and deterioration of the current balance,so that promoted the deepening of the recession even more. In Japan "Japanese archipelago remodeling boom" has plummeted. In 1975, Summit of five advanced countries to deal jointly to calm the inflation and improve the international balance of payments due to the oil crisis has been started. Actually taken the measures were monetary easing by lowering the official discount rate and the tax cuts that does not hesitate even fiscal deficit and fiscal stimulus, but resulted without contributing to drop of unemployment rate and improvement in operating rate, in the acceleration of the domestic inflation (frenzy prices).
It should be noted that the funds transferred in OPEC countries, the part (high absorber's) of which is to improve the effective demand to reflux in developed countries as the import price of OPEC countries,also the other part (low-absorber's) of which is provided as a short-term funds of private banks, it was lent as long-term loans to developing countries,it was returned to the developed countries as the import bill of developing countries,and it had improved gradually effective demand and gradually picked up the economy of developed countries, while resulted in a cumulative debt of the developing countries.
In 1978, inflation was accelerated pair with the second oil crisis caused by the Iranian Revolution, it was resulted in a currency crisis in the weak countries of the economic base, occurred pound crisis, and dollar defense measures have been taken. As a result, each country had to suffer from the trilemma of the unemployment,the current account deficit and inflation. Japan, as well as took 6 trillion yen economic stimulus package aiming at 7% growth in the budget deficit, further at the Bonn Summit complied the extreme strong the yen of 170 yen / dollar from 300 yen / dollar. However, it has absorbed by efforts such as the improvement of corporate productivity and the depreciation of the yen until 200 yen / dollar after then(up to 1985).
5-5 The era of neo-liberalism, monetarism
From 1979 onward,major countries (the United States of Reagan, the United Kingdom of Thatcher, Germany of Kohl, French of Mitterrand, Japan of Suzuki&Nakasone) in order to cope with stagflation gave up the Keynesian policy as the scan pending policy, and adopted a policy by the supply-side economics school to improve the economic efficiency by deregulation and free competition, or by the rational expectations school of radical market fundamentalism .
In addition, until 1980 the US manufacturing industry has lost its competitiveness against Japan and Germany, while in Japan for high wages by the appreciation of the yen,from 1980 onward,it has proceeded strongly with multinational commercialization, labor-saving, the software industry growth. In 1981, the United States of Reagan executed the monetarism policy, the so-called "Reaganomics",which consists of following items, ①while performing a financial reduction to suppress the growth rate of federal spending even under recession, ② performing a substantial tax cut, ③ performing deregulation, ④ conducting money supply growth rate to keep real growth rate. This is planning ways to improving the economic efficiency by small government, free competition due to deregulation,and the dynamism of the business activities due to tax cuts, whereas Keynesian policy was brought the giant of government, bureaucracy immobilization,and a proliferation of popular up spending. In addition, in 1982 the elimination of banking regulation since the New Deal policy has been carried out. Owing to these policy, the international debt crisis that was triggered by the interest rate rise in the US has occurred.
In the UK in 1983, Thatcher was re-elected, the conversion to the neo-liberal policy has been re-confirmed. This symbolizes that while Keynesian policy was not able to extinguish the financiers (financial institution) who is a non-production and a rentier, in reverse the Keynesian was to end by the international financial group. Keynesian policy is intended to control the international movement of private capital, but the new liberalism is one that fully liberalize the movement of international financial funds. Therefor the fact that selecting a new liberalism is giving priority to the international balance of payments and the exchange rate than employment in order to the stability of the fiscal and financial. Namely, it means that in an open economic system the balance of payments and the exchange rate problem are priority than full employment policy, and full employment policy is blocked even under recession. And, neo-liberal policies has brought a situation in which huge international group of private banks reign over the world and occurs debt crisis in developing countries. On the other hand, during this period these policies also dramatically increased exports to Europe and the United States from Japan,and the United States became a debtor nation.
For this situation in 1985 G5 was held at the Plaza, it was agreed to make a strong yen and weak dollar, and was induced 90 to 80 yen / dollar as appreciation of the yen. US trade friction by the excess of imports was caused by the fact that whereas Japan is the export-driven type the United States is a multinational company type, and the US of debt country was acceptable by absorbing the US deficit bonds by the high savings rate in japan, thus these fact was reciprocal. In 1986, finally financial deregulation (the Big Bang) was carried out in the UK, neo-liberal monetary policy was full-scale deployment. In Japan the bubble was rapidly expanded by the results of interest rate cut in order to fix the profit margins against the interest rate cut in the United States. Furthermore bubble is accelerated by the low interest rate policy over the subsequent New York stock market crash of October 1987 (Black Monday) 1 year after a half , yet the meantime a stable state of prices is maintained by the appreciation of the yen.
In May 1989, against the bubble overheating,official discount rate was raised up to 6%, in the late of the same year stock prices hit at the ceiling, in 1990 land prices plummeted after hitting the ceiling, and the bubble collapsed. Further, at 1990 August the Iraq War was caused, and it was carried out a policy of restraint against the inflation due to the War resulting acceleration of the recession after the collapse of the bubble economy.
The above-mentioned more of about 10 years was a turning point from Keynesian policy to the neoliberal policy in the world. But for only in Japan it was maintained the boom obtaining trade surplus even on the strong yen by excessive export competitiveness due to the economic structure of the export-led, and it was a era of inflating the bubble that had to pay its attached to the next era.
5-6 Era of global financial capitalism
When the Soviet Union collapsed in 1991, the global market was formed and the era of global financial capitalism was sweeping the world. Global financial capitalism was established by the complex of the establishment of the global market,the information network of IT technology to transmit information to cover the world in an instant, neo-liberalism policies to arrange the environment of free competition by the free movement of funds and relaxation of market control, and a financial engineering typified by leveraged management. The United States lead deployment of this global financial capitalism by combining a multinational group of companies that are deployed around the world, the financial industry of the East Coast after 1981 years of Reaganomics,and the West coast of the information and communication industry. The United Kingdom are also riding on this flow by the financial Big bang of 1986. Whereby the United States was in the economic rise over 1993 to 2008, and the UK was also in the economic rise in14 years.
However, during that time, in 1992 the European currency crisis was caused by the asymmetry between Germany and other European countries, in 1997 the Asian currency crisis was induced by the rise of the US dollar, in 1999 the global financial crisis was occurred. Like this,crises imposing great sacrifices to financially weak countries were repeatedly caused. On the other hand, globalization acts to promote regional integration, European integration was progressing steadily,so as the European single currency Euro was founded in 1999.
Thus,in this age of the global financial capitalism, while globalization associated with the information technology had a positive function of promoting the integration of the region and promoting strongly the global coordination of each region, it is a reality that huge financial capital such as institutional investors and speculative group such as investment banks had combined and carried out the speculative activities in the global market, as a result often generated a financial currency crisis forcing a harsh toll on developing countries, and at a interval generated a worldwide financial crisis followed a global recession.
In fact, there is a state that gasoline until recently soared by speculation, now, because of the derivative instruments incorporated the residential sub-prime loans in the United States, financial crisis propagates worldwide originated in Lehman Brothers bankrupt in 2008, and the worldwide danger of financial collapse is caused with reduced demand in short order, result in a global recession. The government that has already had a huge budget deficit for antidepression measures is fallen into the situation that have no choice but to give relief to financial institutions and the prop up of economy by further debt. Then, now is a situation that has to endure patiently until the recovery of the economy while pay sacrifice.
5-1 Outline of overall history
Medieval feudalism had the structure that was based on the feudal lords-serf relationship and covered with the Roman church. When its era had been coming to the end, commodity production had become active,the weight of the product distribution beyond the area of the feudal lords had become large,and noticeable occlusion of the feudal lords(=aristocratic layer) had appeared, further in the wake of the Crusades the feudal lords(=aristocratic layer) had exhausted and absolute monarchy had appeared.
In the absolute monarchy late following situation has been brought.National wealth is considered to be amount of gold and precious metals, so that, the mercantilist policies that increase the national wealth to secure the trade balance by the lower pricing of agricultural products and the protective policy of the industry and commerce is taken.While, against mercantilist, farmers protection policy based on the physiocrats in which advocated that only agricultural production is able to grow the value and commerce and industry is not value-creative only performing the processing and exchange of value object is raised.
After that, the commodity distribution had been further developed, and through the Manufacturing stage further increased in commodity production by the machine production system provided by the industrial revolution. At the same time,the labor force had become merchandise by formation of free labor released from the land in large quantities. As a result a free competitive capitalist stage had become, in which goods production becomes key industry along with the labor general becomes "value" and the funds to be subjected to the goods production become "capital",.
During from the end of the 19th century to the first and second World War, a joint-stock corporation system is formed with enormous increasing of the capital due to heavy and chemical industrialization of commodity production, following formation of financial and securities market, and further the exclusive financial capital which is consisted of trust and concern of which bank is the core dominate each national economy.Thus, the stage of monopoly capitalism (= classic imperialism stage ) in which national economies contend for the world's resources and markets each other is carried out.
After the Second World War, along with the former colony to independent politically, it becomes the era of East-West confrontation between the socialist countries around the Soviet Union and the West countries of the capitalist system centered on the United States.As for the West countries,under a state,referred to as "Pax Americana",of the overwhelming economic and military dominance of the United states, the new colonialism in which the former colonial countries is dependent on the economic domination system of the developed countries centered on the United states is deployed.While,there is a need to alleviate the labor conflict because of the East-West confrontation,so that Keynesian policies by which the state control the economy has been adopted.Thus,the state monopoly capitalism stage in which both of growth economy and welfare economics are carried out has become.
Since 1970, a limit or impasse of Keynesian policy is revealed,and economic policy is converted into a neo-liberal policy.In addition collapse of the Soviet Union in 1991 lead to foaming the global market,and with it combined the development of IT technology that can be advanced information processing, then global financial capitalism was formed.
5-2 Era of classical imperialism
In the overall structural change of capitalism mentioned above,now investigate by tracing back to the era of classical imperialism that is directly related to the specific understanding of the current situation.After the first World War, the gold standard that had collapsed has resurrected,and then the economy was revived. In the 1920s, greeted the boom that seemed to also as "eternal prosperity",but in the United States the agricultural recession had brought by the overproduction of agricultural products,and also on the other production has fallen into overproduction. Though,in that state the speculative fever increased, and on Wall Street, stock prices had been rising as so as bubble feeling. After then in 1929 it was happened the big stock market crash. Then the financial system was forced to stop by laissez-faire policy taken on the bankruptcy of failed bank, and further depression was propagated to the European countries by withdrawal of capital from Europe along with it. Thus the global Great Depression with a peak from 1932 to 1933 years was caused. In the recovery process from the Great Depression, each country of the Great Powers rushed towards the division of the world market by a forced expansion of demand due to an armaments race and formation of the economic zone, and it was caused the second World War of 1939-1945 years and consequently brought the end of era of the Great Powers imperialism.
The situation that in this way generates the Great Depression and in its reconstruction process rushed towards the second World War is indication that the inconsistency of the gold standard was beyond the breaking point. In addition, in 1936 during this period, "the general theory of employment, interest and money" of Keynes that becomes the theoretical support of the economic policies of the next era was published.
5-3 Era of East-West confrontation and the Keynesian policy
In 1944 during the Second World War, in order to resolve the inconsistency of the gold standard the Bretton Woods agreement was concluded. Then by the IMF system,fixed exchange rate system and the dollar standard backed up with the gold were enforced,and stable reconstruction and development of the world economy around the United States was desired.
After the Second World War, the most important factor which is to define the political and economic relationship between the world was the East-West conflict in which Eastern countries of the socialist system centered on the Soviet Union and Western countries of the capitalist system centered on the United States confronted each other. In western countries, in order to maintain the capitalist system, it is imperative to prevent the occurrence of depression and mass unemployment, so the adoption of Keynesian policies that can realize it was as inevitable.
The 1950s, in all industries the United States has been overwhelmed, funds due to the trade surplus, has been circulated to other countries by economic aid and military spending and private investment, which is representative to the Marshall Plan. Although in 1960 OPEC is organized that a significant impact on the world economy later, it was not possible to overcome the downturn in crude oil prices due to excessive supply at that time.
The 1960s, in the United States wages per person was higher than in other countries, so that the multinational commercialization was progressed and conglomerate boom to form a conglomerate of diversified management takes place, but basically domestic manufacturing work was the center of the economic structure. In addition, Japan was by the "income doubling plan" of the Ikeda Cabinet to enter the high economic growth path based on Keynesian policy, the Japanese economy was dramatically developed. As a result, later that, the Japan-US trade friction was raised against Japanese products, started from the cotton product to the more advanced industrial products in accordance with the development of the Japanese economy.
This era is the era of state monopoly capitalism, as seen in the theory of neoclassical synthesis represented by the "modern capitalism" written by John Strachey and the writings by Samuelson, in which the state (government) operate and maintain the economy and society rather than the market economy of the laissez-faire. it is the golden age of the economy by the Keynesian policy.
5-4 Era of stagflation
However, President Nixon in 1971 declared the exchange stop of gold and the dollar, it had occurred so-called Nixon shock. This was done for $ defense against large quantities have been flowing out by a budget deficit and trade deficit because of the war expenditure of the Vietnam War. But as a result that the dollar as a key currency has lost the support of the gold, the exchange system of dollar is to be shifted to a floating exchange rate system. It was tried to return to a fixed exchange rate system at the Smithsonian agreement, but had collapsed immediately. Here, the meaning of the Nixon shock is that the money embodied the value is completely away from the gold ie goods and become a indicator of the value that is consisted of information, and value is changed under informatization. In 1944, at the time abandoned the gold standard and adopted dollar-gold standard, it can be said that it was already inevitable that this happens.
In Japan, it was coped with causing a recession due to a strong yen rate in the floating exchange rate system by the handouts of the currency. It can be said that Economic expansion route by "the Japanese Archipelago remodeling Plan" of 1972, Tanaka Cabinet,is intended to suppress the strong yen rate by the inflation trend with the fueled economy.
In the these condition, in 1973,the OPEC triggered the 4th Middle East War declared that raise at once to more than five times in the 11,12 dollars / barrel of crude oil from $ 2 / barrel, as a result generated the first oil crisis in which worldwide inflation under the recession,that is stagflation,was led due to the cost increase by a jump in imported crude oil prices.It is prerequisite for making possible such unilateral price increases of crude oil that OPEC countries has grown by holding the dollar in the 1970s to have the power by shareholding made to price increases by $ 1 each year in the Riyadh agreement at becoming supply and demand of crude oil in balance and as abovementioned monetary value has been informatized away from the goods by gold-dollar exchange stop.
Stagflation thus generated was, unlike the recession due to excessive production, synergism of cost inflation and effective demand reduction due to the huge funds transfer to OPEC countries, essentially Keynes policy didn't cope with it. Nevertheless,it took the policy tightening fiscal and monetary against inflation and deterioration of the current balance,so that promoted the deepening of the recession even more. In Japan "Japanese archipelago remodeling boom" has plummeted. In 1975, Summit of five advanced countries to deal jointly to calm the inflation and improve the international balance of payments due to the oil crisis has been started. Actually taken the measures were monetary easing by lowering the official discount rate and the tax cuts that does not hesitate even fiscal deficit and fiscal stimulus, but resulted without contributing to drop of unemployment rate and improvement in operating rate, in the acceleration of the domestic inflation (frenzy prices).
It should be noted that the funds transferred in OPEC countries, the part (high absorber's) of which is to improve the effective demand to reflux in developed countries as the import price of OPEC countries,also the other part (low-absorber's) of which is provided as a short-term funds of private banks, it was lent as long-term loans to developing countries,it was returned to the developed countries as the import bill of developing countries,and it had improved gradually effective demand and gradually picked up the economy of developed countries, while resulted in a cumulative debt of the developing countries.
In 1978, inflation was accelerated pair with the second oil crisis caused by the Iranian Revolution, it was resulted in a currency crisis in the weak countries of the economic base, occurred pound crisis, and dollar defense measures have been taken. As a result, each country had to suffer from the trilemma of the unemployment,the current account deficit and inflation. Japan, as well as took 6 trillion yen economic stimulus package aiming at 7% growth in the budget deficit, further at the Bonn Summit complied the extreme strong the yen of 170 yen / dollar from 300 yen / dollar. However, it has absorbed by efforts such as the improvement of corporate productivity and the depreciation of the yen until 200 yen / dollar after then(up to 1985).
5-5 The era of neo-liberalism, monetarism
From 1979 onward,major countries (the United States of Reagan, the United Kingdom of Thatcher, Germany of Kohl, French of Mitterrand, Japan of Suzuki&Nakasone) in order to cope with stagflation gave up the Keynesian policy as the scan pending policy, and adopted a policy by the supply-side economics school to improve the economic efficiency by deregulation and free competition, or by the rational expectations school of radical market fundamentalism .
In addition, until 1980 the US manufacturing industry has lost its competitiveness against Japan and Germany, while in Japan for high wages by the appreciation of the yen,from 1980 onward,it has proceeded strongly with multinational commercialization, labor-saving, the software industry growth. In 1981, the United States of Reagan executed the monetarism policy, the so-called "Reaganomics",which consists of following items, ①while performing a financial reduction to suppress the growth rate of federal spending even under recession, ② performing a substantial tax cut, ③ performing deregulation, ④ conducting money supply growth rate to keep real growth rate. This is planning ways to improving the economic efficiency by small government, free competition due to deregulation,and the dynamism of the business activities due to tax cuts, whereas Keynesian policy was brought the giant of government, bureaucracy immobilization,and a proliferation of popular up spending. In addition, in 1982 the elimination of banking regulation since the New Deal policy has been carried out. Owing to these policy, the international debt crisis that was triggered by the interest rate rise in the US has occurred.
In the UK in 1983, Thatcher was re-elected, the conversion to the neo-liberal policy has been re-confirmed. This symbolizes that while Keynesian policy was not able to extinguish the financiers (financial institution) who is a non-production and a rentier, in reverse the Keynesian was to end by the international financial group. Keynesian policy is intended to control the international movement of private capital, but the new liberalism is one that fully liberalize the movement of international financial funds. Therefor the fact that selecting a new liberalism is giving priority to the international balance of payments and the exchange rate than employment in order to the stability of the fiscal and financial. Namely, it means that in an open economic system the balance of payments and the exchange rate problem are priority than full employment policy, and full employment policy is blocked even under recession. And, neo-liberal policies has brought a situation in which huge international group of private banks reign over the world and occurs debt crisis in developing countries. On the other hand, during this period these policies also dramatically increased exports to Europe and the United States from Japan,and the United States became a debtor nation.
For this situation in 1985 G5 was held at the Plaza, it was agreed to make a strong yen and weak dollar, and was induced 90 to 80 yen / dollar as appreciation of the yen. US trade friction by the excess of imports was caused by the fact that whereas Japan is the export-driven type the United States is a multinational company type, and the US of debt country was acceptable by absorbing the US deficit bonds by the high savings rate in japan, thus these fact was reciprocal. In 1986, finally financial deregulation (the Big Bang) was carried out in the UK, neo-liberal monetary policy was full-scale deployment. In Japan the bubble was rapidly expanded by the results of interest rate cut in order to fix the profit margins against the interest rate cut in the United States. Furthermore bubble is accelerated by the low interest rate policy over the subsequent New York stock market crash of October 1987 (Black Monday) 1 year after a half , yet the meantime a stable state of prices is maintained by the appreciation of the yen.
In May 1989, against the bubble overheating,official discount rate was raised up to 6%, in the late of the same year stock prices hit at the ceiling, in 1990 land prices plummeted after hitting the ceiling, and the bubble collapsed. Further, at 1990 August the Iraq War was caused, and it was carried out a policy of restraint against the inflation due to the War resulting acceleration of the recession after the collapse of the bubble economy.
The above-mentioned more of about 10 years was a turning point from Keynesian policy to the neoliberal policy in the world. But for only in Japan it was maintained the boom obtaining trade surplus even on the strong yen by excessive export competitiveness due to the economic structure of the export-led, and it was a era of inflating the bubble that had to pay its attached to the next era.
5-6 Era of global financial capitalism
When the Soviet Union collapsed in 1991, the global market was formed and the era of global financial capitalism was sweeping the world. Global financial capitalism was established by the complex of the establishment of the global market,the information network of IT technology to transmit information to cover the world in an instant, neo-liberalism policies to arrange the environment of free competition by the free movement of funds and relaxation of market control, and a financial engineering typified by leveraged management. The United States lead deployment of this global financial capitalism by combining a multinational group of companies that are deployed around the world, the financial industry of the East Coast after 1981 years of Reaganomics,and the West coast of the information and communication industry. The United Kingdom are also riding on this flow by the financial Big bang of 1986. Whereby the United States was in the economic rise over 1993 to 2008, and the UK was also in the economic rise in14 years.
However, during that time, in 1992 the European currency crisis was caused by the asymmetry between Germany and other European countries, in 1997 the Asian currency crisis was induced by the rise of the US dollar, in 1999 the global financial crisis was occurred. Like this,crises imposing great sacrifices to financially weak countries were repeatedly caused. On the other hand, globalization acts to promote regional integration, European integration was progressing steadily,so as the European single currency Euro was founded in 1999.
Thus,in this age of the global financial capitalism, while globalization associated with the information technology had a positive function of promoting the integration of the region and promoting strongly the global coordination of each region, it is a reality that huge financial capital such as institutional investors and speculative group such as investment banks had combined and carried out the speculative activities in the global market, as a result often generated a financial currency crisis forcing a harsh toll on developing countries, and at a interval generated a worldwide financial crisis followed a global recession.
In fact, there is a state that gasoline until recently soared by speculation, now, because of the derivative instruments incorporated the residential sub-prime loans in the United States, financial crisis propagates worldwide originated in Lehman Brothers bankrupt in 2008, and the worldwide danger of financial collapse is caused with reduced demand in short order, result in a global recession. The government that has already had a huge budget deficit for antidepression measures is fallen into the situation that have no choice but to give relief to financial institutions and the prop up of economy by further debt. Then, now is a situation that has to endure patiently until the recovery of the economy while pay sacrifice.