Progressive capitalism, crisis, and class struggle: Lessons from Japan's production control and democracy movements, 1945-47.

Author:Burkett, Paul

The apparent global triumph of neoliberal capitalism in the 1980s has been followed by renewed economic instability and anti-capitalist protest. While financial crises savage both economic basket cases (Russia, Mexico) and erstwhile economic 'miracle' countries (Japan and East Asia), new worker-community movements have sprung up to resist the marketization of economic and social life. From the Chiapas rebellion in Mexico, to the December 1995 public-sector explosion in France, to the mass actions against the WTO (Seattle, Fall 1999) and the IMF/World Bank (Washington DC, Spring 2000)--just to name a few--workers and communities are increasingly contesting the priority of capitalist profitability and competitiveness. The eruption of these struggles signals that the resistance to capitalist globalization is itself becoming globalized, thereby raising the question 'What next?'

Yet often the best answers progressive economists can come up with involve relatively minor reforms of the system such as transaction taxes in international financial markets; greater openness and formal democracy in the decision-making procedures of the WTO, IMF, and World Bank; or--at the very most--a one-time write-off of Third World debts. For the most part, such programmatic proposals seem designed to make capitalism more equitable, stable, and efficient. That popular disquiet with capitalist institutions might itself contain a potential movement toward alternative, non-capitalist forms of socio-economic organization is rarely considered. In short, the widespread failure of left economists to formulate policy alternatives that directly challenge wage-labor relations and the dominance of 'market forces' (or even to seriously consider the connections between these two core features of capitalism) seems to complement their inability or unwillingness to develop political-economic visions directly informed by popular anti-capitalist struggles. How is this political-intellectual conjuncture to be explained?

We believe a primary cause of this failure is the prior embrace by many center-left and left economists of 'progressive competitiveness' thinking. Responding to the growing power of neoliberalism and the increasingly conservative political climate of the 1970S and 1980s, many left-of-center economists made a fateful decision to begin framing political-economic analyses and policy alternatives in more 'market friendly' terms. The idea was to fight neoliberalism by demonstrating that pro-worker policies could not only be more equitable and socially efficient, but also enhance the competitiveness of a country's enterprises in the global marketplace.

As usefully recounted by George DeMartino (1996), this intervention of left-wing thinkers into 'competitiveness policy' debates had three key features. First, unlike previous 'industrial policy' thinking, with its emphasis on the need to protect workers from market forces, the new progressive competitiveness paradigm argued that labor's work and living conditions could be improved through greater success in the market (even when such success required some prior insulation of firms and their workers from direct market pressures, in order to nurture productive capabilities requiring longer time periods for their development). Second, the industrial policy image of uneasy truce or compromise between capital, labor and the state (countervailing power) was replaced with a vision of direct collaboration between capital and labor as the basis for the development of competitive productive capabilities. Third, in formulating alternatives to neoliberal policies, progressive competitiveness thinkers drew inspiration fro m the purported successes of particular kinds of capitalism in developing more labor-friendly investment and production regimes that were also more competitive than free-market, anti-worker regimes internationally.

In this search for capitalist regimes generating improvements in worker conditions through labor-management cooperation and competitive market successes, many progressive economists were profoundly influenced (and inspired) by the succession of postwar economic 'miracles' in East Asia: first in Japan; then in South Korea, Taiwan, Singapore, and Hong Kong; and most recently in Indonesia, Malaysia, and Thailand. This record convinced them that Japanese-style capitalism, considered as the model and/or as a main engine of the broader East Asian experience, was a superior form of capitalism. Along with the successes of Japan's financial and investment planning systems in facilitating high rates of productive capital accumulation, progressive competitiveness thinkers emphasized the purportedly cooperative, stable, and nurturing qualities of Japan's corporate labor-management regime as the primary factor making Japanese capitalism more equitable, less exploitative, and more efficient and competitive than us-style ne oliberal capitalism. (1)

Elsewhere we have set out a general survey and critique of progressive competitiveness thinking on Japan (Burkett and Hart-Landsberg, 1996; 2000: Chapter 4).The point we want to emphasize here is that 1990s developments put the practitioners of this political-intellectual strategy in an extremely awkward position, which helps explain the above-mentioned partial paralysis of left economists in the face of renewed economic instability and class struggle. To begin with, the collapse of Japan's speculative 'bubble economy' in 1990, followed by a decade of stagnation, severely damaged the credibility of progressive competitiveness interpretations. This credibility was dealt another, perhaps mortal, blow by the crisis that swept through East Asia in 1997-98--a crisis which took most admirers of East Asian capitalism (left and right alike) by surprise. Nonetheless, many progressive economists continue to defend the virtues of the Japanese model and blame the region's economic problems on the destructive effects of u nregulated international market activity. (2) However, while this argument seems to jibe with their focus on reforming global-neoliberal institutions (the WTO, IMF, World Bank, and international financial markets), it represents a subtle but important retreat in their position. Previously, progressive competitiveness thinkers had argued the superiority of Japanese-style capitalism based on its global market successes. Now, they argue that their favored capitalist model requires protection from global market forces. It is not easy to see how such a selective allegiance to global markets can be coherently maintained, and this problem may reflect the utopianism entailed in the use of market competitiveness as a guide to the viability and success of purportedly worker-friendly investment and labor-management systems.

This difficulty is evidenced in the common view among progressive supporters of the Japanese model, to the effect that the best that can be hoped for in the present is a period of muddling through in which at least some of the purportedly progressive elements of the model will hopefully be preserved. (3) Thus, in the midst of worsening global economic instability and crisis, of intensified class struggle and growing international worker solidarity, the best counsel these thinkers can offer is the defense of particular capitalist institutions--a defense not linked to any vision of worker-community centered, anti-capitalist, and global socio-economic transformation. Having failed to adequately root their interpretations of Japanese capitalism in a historical analysis of the country's class relations, including the struggles of Japanese workers in and against these exploitative relations, progressive admirers of the Japanese model have basically painted themselves into a corner of political impotence at a crucia l point in capitalist history.

Our own view of the lessons to be learned from the Japanese and East Asian experiences is quite different. It emphasizes that the economic strategies followed in postwar Japan and East Asia were shaped by exploitative class relations, and that current regional crises are the result of class contradictions and struggles. Rather than wasting energy defending one form of capitalist relations over another, we should be developing new, non-capitalist political-economic visions out of a critical engagement with the struggles of workers and communities in and against all forms of capitalism. In this paper, we seek to contribute to the construction of class-based and worker-community centered political movements and visions by revisiting the struggle to reshape the Japanese political-economy immediately after World War II. (4) Developments during this critical period serve as an important counter to progressive competitiveness interpretations of Japanese capitalism. They also offer strategic insights and lessons for contemporary anti-capitalist struggles.

In the years 1945-47, Japanese workers responded to a severe capital strike by taking direct control over important sectors of production and posing a new vision of worker-community based democracy against the authoritarian institutions of the Japanese state and the limited democratic reforms implemented by the US occupation. This was 'a major challenge to capitalist rule' (Halliday, 1978: 207), a struggle to create a new system based on humane and democratic-socialist principles, and it was repelled only by the combined efforts of the us occupation and the Japanese prewar ruling class. Only on the basis of its suppression were the Japanese government and big businesses able to gradually rebuild, although with some significant modifications, the basic prewar structures of Japanese capitalism (Burkett and Hart-Landsberg, 2000: Chapter 8).

The fact that 'labor and capital fought it out, socialism versus capitalism, during the first nine months of reconstruction' is surely an important reference point in any determination of the essential class...

To continue reading