Saturday, Oct 25, 2008
The bursting of the Tokyo financial bubble in 1990 brought profound social change
Times: How Japan learnt how to stop worrying and love the recession
After Japan's bubble, the very core of what it meant to be Japanese changed direction decisively, and by no means all for the worse. Views on economic right and wrong swerved left. Belief in the fast buck was replaced with tortoise v hare. Bubble-phobia became the underlying policy of successive Cabinets. Profit was OK, but excess profits became faintly disgusting. Japanese instinctively hoarded cash for a rainy day: financially and philosophically. Household risk aversion now commands cultish devotion: books about living on a fiver a day sell in millions, and TV programmes on the theme are primetime fare. Chains of upmarket second-hand stores suddenly arose for a public no longer obsessed with novelty and pristineness. Japanese companies became the most energy-efficient on Earth.
17 Comments
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1. renting2 said...
Another 'bubble' that burst, which brought about massive social change was the collapse of the USSR. Can you imagine what the average Russian felt as their whole ethos was exposed as a sham, not over decades but over a few days. Now look at what is emerging.
2. drewster said...
@r2,
That wasn't just a bubble, that was the collapse of an entire socio-economic system. Despite dire predictions of the end of capitalism by some people on here, I don't think it'll be nearly as bad as the downfall of the Soviet Union.
3. renting2 said...
drewster - that was sorta what I was trying to say, you put it better.
4. Fjcruiser said...
Let's hope we are not facing the same issues as Japan did in the early 90s. They never really recovered from it. Not only the Nikkei is 5 times lower than it was in 1989, house prices have never recovered and it took the banks an average of 13 years to get rid of their toxic assets (ok it took them 6 years to realize they had a problem!). And now, guess what after 5 years of growth, Japan is back to square one or worse. We cannot even call it boom and bust, but bust and more bust.
The problem is our governments are in total denial about the extent of the problems.Let's hope it does not take them 6 years before acting.
5. japanese uncle said...
Over a third of Japanese workers are now part-time and at least as many are employed on short-term contracts; the old days of decent guaranteed humble employment are gone for good.
Bill Corr, Dhahran, Saudi Arabia
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Being an interesting article, it wants the description of the aspect as voiced in the view above. Standard of living of the majority in Japan is equivalent to that in the 1960's, I guess, while a tiny fraction with enormous wealth is living like kings. Absolutely dispicable!
6. theboltonfury said...
an interesting article. Shame the Japanese are far more socially advanced than much of our country
can't see it working here
7. This comment has been removed as it was found to be in breach of our Blog Policies.
8. jimmy_joe said...
@drewster
Capitalism won't end because it is the natural order of things. Whatever society we have in future will have aspects of capitalism because people like to make a profit, and of socialism, because people don't like to make a loss.
A state-oriented system is more durable in a total societal collapse than a free market one because it has less incentive in shutting itself down:
Closing the 'Collapse Gap': the USSR was better prepared for collapse than the US
http://www.energybulletin.net/node/23259
9. last_days_of_disco said...
@jimmy_joe
The USSR collapse was terrible. To say they were better prepared is just plain nonsense. The bent over a barrel, all their tech was
stolen, their weapons went off to Africa, they lost chunk after chunk of their dominion in the chaos. State secrets were plundered. Yeltzin was a drunk, its testimony to one thing and one thing only, the Russians are tough. And now they are angry and tough and much better organized. Putin secured the KGB, restablished communications with the existing officers and the rest is history.
England will do ok because the elite can assert control and all the mechanisms exist to ensure that happens. France and Holland are going to go up in flames. Germany should be ok. America is a worry, whichever way the election goes, there is going to be trouble.
10. last_days_of_disco said...
The thing that slays me about this article, is that the Times has been ramping property for years, now they run an article about
how we need to learn to love being fleeced. Thanks guys!
11. mountain goat said...
Disco - why Holland? Holland is a relatively rich country because of their Golden Age before Brit Empire took over. Their central bank still has twice the gold reserves of the UK for example, that is 8x more gold per capita than the UK.
12. sold 2 rent 1 said...
It is not just capitalism that is going up in smoke, but western civilisation.
Why? Because we live on a finite planet and both rely on exponential functions to remain stable.
We need to move to a world where we have ZERO growth in population, consumption, and money.
Capitalism has been excellent for the last 300 years, but now it is time for something new whether you like it or not.
13. last_days_of_disco said...
France has an enormous social problems, so does Holland (they have had numerous assassinations, including a couple of really public figures). Economic disaster, which will sweep away all the economies of the world and plunge *everyone* into recession/depression (including Holland) is going to test the optimistic social cohesion theories of the good times.
Suddenly you wake up to a balkanized population and no money to pay the piper (although I must admit the gold may help, but having 8x more than us is still not that much). Nasty. Holland is still exposed though. France too, the culture shock is palpable. UK is facing a big test too.
14. Matrix_rules said...
Hi gents,
I’m from former USSR, now-proud Canadian.
Let me tell you, imho capitalism/socialism – doesn’t really matter, corruption and hypocrisy are real problems. People may live happy lives in both types of society.
PS Sorry for poor English
15. paul said...
I'm in Tokyo now, and I can tell you it looks an awful lot more financially stable than the UK ever was. They are remarkably modest about the fact that the rest of the world has bascially made the same mistake as they did over a decade ago.
"Every single credit led expansion in history has been followed with financial catastrophe. Without fail."
Not sure who said that - might have been Nadeem Walayat on Market Oracle, but Japan learned it a long time ago, the rest of the world is relearning it, and it's still true.
16. Orwell said...
I wonder what David Smith would say now?
17. Fjcruiser said...
France will probably fare better as because the state machine is very controling and powerful, chinese style.UK is in a far more vulnerable position, still looking for a quick profit (look at the way banks are reposessing). Ultimately, when there is a crisis, you need an autocratic state to stop the plundering of the economy by vultures and the likes acting for their personal enrichment.