A Tale of Two Prime Ministers

1 A Difference in Vision

On 19 April 2013, in a speech to the Japan National Press Club, Shinzo Abe set out his vision for the future of the Japanese economy and he outlined part of his personal philosophy, his political policies and his proposed government’s activities which all are aimed at improving the prospects and prosperity of all the Japanese people within the next ten years. You can read that speech at

http://www.kantei.go.jp/foreign/96_abe/statement/201304/19speech_e.html

David Cameron has never set out his vision of Britain’s future in similar precise terms. He has of course voiced the usual platitudes that he is a “modern compassionate conservative” but his political activity and legislative programme are best described as an old-fashioned, callous and more extreme form of Thatcherism. Apart from that self-description, there appears to be no comparable and coherent statement of Cameron’s personal philosophy, nor any such statement about any future political policies or government activity aimed at improving the prosperity of the British people.

That is a great pity because a comparison between the two men is inevitably a contrast between the powerful and active presence of Shinzo Abe, and his detailed political and economic proposals to improve Japan’s economic future, and the absence, inaction on major crises and silence of David Cameron on most of these issues.

Inevitably, Cameron appears to respond to individual issues without the assistance of any overall vision. For example, on the issue of low pay, John Sentamu, the Archbishop of York, has said in an Observer article dated 20 July 2013 entitled “The Scandal of MIllions not Paid Enough to Live On” that Cameron is “offering only platitudes when addressing the problem.” See the report at

http://www.theguardian.com/society/2013/jul/20/john-sentamu-living-wage-scandal

John Sentamu also raises several related issues which will further illustrate the comparison between the two Prime Ministers, as commented upon below. In the following sections, I will use the major headings of the Shinzo Abe speech and some of the relevant points of Sentamu’s article as a framework for comparisons.

2.1 Shinzo Abe’s introduction to his policies

As President of the Liberal Democratic Party, Shinzo Abe became the Japanese Prime Minister for the second time on 16 December 2012. As the Wikipedia entry reads:

“In elections on 16 December 2012, the LDP won 294 seats in the 480 seat lower house of parliament. Following his victory, Abe said “With the strength of my entire cabinet, I will implement bold monetary policy, flexible fiscal policy and a growth strategy that encourages private investment and, with these three policy pillars, achieve results”

“ Abenomics, as his economic policy has been called, consists of fiscal and monetary expansion with a 2% target interest rate.”

See http://en.wikipedia.org/wiki/Shinz%C5%8D_Abe

Shinzo Abe began his speech by telling the story of Ino Tadataka, who from the age of 55 (at a time when Japanese life expectancy was 50) travelled all over Japan, covering over 40,000 km, and producing excellent maps. Shinzo Abe draws the life-lesson from Tadataka’s example, that

“No matter how difficult a challenge may seem, it is always possible to overcome it provided you have a strong will never to give up.There is no such thing as “too late” to take action.”

Shinzo Abe’s growth strategy encompasses both monetary and fiscal policy as summarised above and outlined below. Mr Abe mentioned several issues – the urgent need to deal with the disaster area around the Fukushima nuclear reactor by creating a Reconstruction Agency and removing the hindrances to reconstruction; prolonged deflation, which the target of 2% inflation, agreed by the Bank of Japan and the Government, should remedy; education in crisis, which specific actions could help remedy; damaged Japanese diplomacy, which has been improved by visits establishing better international relations; and the provocations from North Korea, which would be best dealt with within the wider international context by a unified message to North Korea from the USA, the Republic of Korea, China and Russia.

2.2 Higher pay for workers – from Shinzo Abe’s introduction

Shinzo Abe has the national objective of paying Japanese workers as much as possible.

As he says:

“With the passage of the supplementary budget, flexible fiscal policy is also now moving into the stage of execution. In order to enable the fruits of these endeavors to reach the people as quickly as possible, I myself have made direct requests to industrial circles that they raise workers’ pay by the greatest amount possible. The tax system also supports companies that return profits to their employees.

In this year’s spring labour offensive, a number of companies decided to raise employees’ remuneration, including statements that bonuses would be paid in full.”

By contrast, David Cameron’s policy is not only to reduce the benefits of the unemployed but also to keep low the earnings of the employed by maintaining the indefensible minimum wage legislation and through higher taxation. Cameron has not asked the CBI to try to persuade British Companies to pay a living wage, and the idea that he might ever do so, given his known attitudes, seems unlikely.

As John Sentamu, Archbishop of York, pointed out in his Observer article:

“The scale of low pay in Britain is a national scandal. Come pay day, nearly five million people in this country won’t have been paid at a rate high enough to live on. Just think about that. Nearly five million people give their time, their skills and their energy to perform jobs – many of which we all depend on – but don’t get paid enough by their employers to even get by. That means not enough money to heat their homes, or feed their families, or plan for a rainy day.”

The Coalition government, who have directly attacked the welfare of the unemployed, the disabled and the poor, have neither a policy nor any programme to improve the prosperity of British workers.

2.3 Shinzo Abe’s three Three Key Words – challenges, openness, innovation

Shinzo Abe proposes a 2% inflation target for the BoJ, along with a 2% interest rate on credit, so the Japanese can continue their historical policy of trying to set the interest rate equal to the inflation rate (which is the economic condition for the maximisation of real wealth by making borrowed money a counterpart of real resources – see section 8 of

http://londonprogressivejournal.com/article/view/1497/shimomuran-economics-the-nodebt-investment-credit-creation-path-to-more-rapid-economic-growth ).

Shinzo Abe’s Japan of the future will have “Abundant capital, directed to growth areas, removing funding obstacles”

The Coalition government, by contrast, has cut the public works capital programme in nearly all areas. The cuts in local authority budgets and in quango budgets have so far been very severe. Now, in the run-up to the next election, the Coalition Government are desperately trying to produce a private and public sector building boom so as to improve their chances of being re-elected. This is working to a limited extent in the housing construction sector but not in the public sector. The staff that once implemented the higher investment public sector programmes (for example in the “Schools and colleges for the Future” programmes) are no longer there in sufficient numbers to implement any major buildings growth programme. The newly promised public sector higher funds are only an increase until the date of the next election, after which the temporary rise in capital funding falls down a cliff again. And the funds must be spent in-year, which can never be guaranteed for capital projects. All in all, the government’s lately found enthusiasm for a quick electoral fix through more public building projects cannot work because, like so many Coalition activities, it is very amateurish, and their budget cuts have damaged the previously-existing implementation process.

And in my view, the cuts have been too deep and the damage to so many families has been too great, for any capital funds “sticking plaster” to reverse their standing at the polls.

The British Coalition Government have no intention of adopting the Abe policies – no policy of providing abundant capital, directing it to growth areas in the economy, and removing funding obstacles. And the current British Government have no understanding whatsoever of wealth creation using the Shimomuran investment credit economics within which Shinzo Abe’s policies are framed.

2.4 Shinzo Abe – “Activate all Japanese Human Resources, Especially Women”

Shinzo Abe said: ‘”Women participating actively in society” is something that tends to be mentioned in the context of social policy. However, I see it quite differently. I view it as forming the central core of my Growth Policy.

I firmly believe that enabling women’s latent high degree of ability to blossom fully will be a driving force that puts Japan, which has had the feeling of being caught in an impasse, on a growth track once more.”

The Cameron Coalition Government has no such policy – quite the contrary.

So the greater participation of all human resources and a proper and more equal role for women is a central plank of Shinzo Abe’s policy, as opposed to the undermining of women’s independence through the low-pay-policies of the Coalition government, and the absence of any UK political programme to give women the social and economic positions their talents justify.

Shinzo Abe also sees the need for greater innovation and intellectual property.

Cameron doesn’t see the need for either, and even if he did, he would be disinclined to do anything about it.

Shinzo Abe intends to assist international stability through international visits and economic diplomacy – through playing a full part in the Trans-Pacific Policy of co-operation with the USA, and through meetings with Russia and Middle East governments, especially the UAE.

Cameron’s major focus is on the possible withdrawal of the UK from the great project of a United Europe, and the possible dissolution of the United Kingdom, largely brought about by the Scottish response to Thatcher’s use of Scotland as a early test bed for the Poll tax and privatisation policies. As the commentators on “Not the Nine O’Clock News” have remarked, there are more pandas in Scotland than Conservative MPs.

The Coalition Government behaves more like an elected dictatorship than an elected government. Policies developed in the darkness of Smith Square by the Conservative Party are then sprung upon the electorate as government policy despite the absence of any commitment to that policy during the election.

The Coalition-enforced privatisation of the NHS, despite Cameron’s promise that the NHS would be “Safe in his hands”, is but one example of that.

On nearly all the Coalition issues – the bedroom tax, the attacks on the living standards of the poor and disabled, and the real-terms cuts in unemployment allowances – the Coalition government is victimising the groups which it believes to be largely labour supporters. That is extremely divisive, compared to Shinzo Abe’s commitment to involve all Japanese people in his growth plans.

2.5 Shinzo Abe’s Policy that Growth Industries Are To Be Created from a “Society of Good Health and Longevity”

These proposals include a major focus on healthcare and medical technology, the creation of “Medical Excellence, Japan”, with 110bn Yen for IPS Cell Research, investment in Automated Cell Sheet Technology, the formation of innovation-accelerating research clusters and structures, and the copying of the US NIH structures in Japan.

Shinzo Abe quotes the Illustrative example of a letter from a disabled girl:

“The other day, I received a letter from a girl who graduated from elementary school this year. She was born with an intractable illness by which her small intestine fails to function and she has not had a typical meal since she was very young. She has had surgery eight times already.

Her letter closed with the following line, expressing her expectations for IPS cell research:

“If a treatment can be found, then the future will be extremely bright. And I would love to be able to eat anything I like.”

‘It is also the responsibility and the role of politics to listen carefully and respond to wee voices such as hers, as she tries to live life with hope and a positive attitude.”

Cameron doesn’t seem to listen to anyone except the other members of his Eton-dominated Cabinet. If this young lady were in the United Kingdom, she might perhaps have been denied or delayed treatment on cost grounds, and the Atos review might perhaps even have assessed her as a work-shy shirker, suitable for work. Shinzo Abe continues:

“In particular, as someone who recovered from an intractable illness to once again become Prime Minister, I have a responsibility that can also be called my “destiny,” to advance policies that take into account the perspective of people suffering from intractable illnesses.

“As soon as the “Japanese version of the NIH” is established, I wish to move straight into accelerating research on intractable illnesses as a national project. By doing so, I will work to create a society in which even people suffering from intractable illnesses at present can have hope for the future.

“This is what a “society of good health and longevity” should be like. I will move forward in this endeavor as one of the pillars of my Growth Strategy that will lead to new industries.”

Cameron’s Coalition Government have no comparable policy.

2.6 Shinzo Abe wants “Participation by all”

In Section 4 (entitled A Growth Strategy That Enjoys Participation by All ) of Shinzo Abe’s speech, Abe refers to Dr Osamu Shimomura as follows:

“Dr.

Osamu Shimomura, who set forth the theory of the “income doubling plan” during Japan’s period of high growth, said in a paper entitled “The Possibilities and Conditions for Economic Growth” that growth policy is the creation of “conditions that will bring into play to the greatest extent possible the capabilities actually held by the Japanese people.”

“Dr.

Shimomura pointed out that 45 million persons in the labour force had “few opportunities to demonstrate” their creative abilities “even though they have extremely high levels of latent ability” and explained that the Japanese economy would be able to grow only if these “opportunities” were provided properly.”

I consider Dr. Shimomura’s words to have universal value even now.”

In order to bring about higher Japanese growth, Mr Abe proposes “The movement of labour without unemployment” and ” Better funding for higher skills re-training” and he further comments:

“It will be necessary to enhance workers’ competencies in order to meet the needs of growth industries. We will considerably increase subsidies to support the movement of labour. These will help corporations that accept workers to cover the costs of training that are incurred.”

No such programmes exist in the UK. The linkage which once existed in identifying industrial training needs and providing these was destroyed by the abolition of the Learning and Skills Council and the RDAs. Their replacement by Local Enterprise Partnerships may have saved a little money but the knowledge and experience lost in that process will take years, possibly decades, to recover.

With the destruction of the Regional Development Agencies ( RDAs) as the potential engines supporting regional economic growth, the responsibility for economic development has been centralised on the national government of Britain – a responsibility which the Coalition is woefully ill-equipped to deliver.

2.7 The creation of internationally competitive young people

Mr Abe proposes more Asian Exchange students, along with an emphasis on the learning of English so that different Asian nationalities can talk to one another in English, and he proposes a retimed, re-scheduled job application schedule within the year, to help place returning overseas-studying Japanese on an even recruitment basis with domestic Japanese in job competition.

2.8 A Japan in which women shine versus a Britain in which many women are trapped in low-paid jobs which pay less than a living wage

Again, Shinzo Abe sets out his objectives in detail – for 30% of Japanese leaders to be female, for the improvement of childcare availability via the “Yokohama Method” (of company-run nurseries) and for better funding for childcare company start-ups.

By way of contrast, John Sentamu comments on the Cameron-led Coalition’s continuation of legally-set very low pay (below the cost of living) in Britain for women, who disproportionately occupy the lower-paid jobs:

“The consequences for so many people and their families are devastating. Women, as the majority of low-paid workers in this country, are hit particularly hard.

Low pay threatens the great strides that have been made in gender equality in recent decades because it undermines women’s economic independence. This is a huge loss for them and for society as a whole.”

Again Shinzo Abe offers a vision of a better Japan in which women have better jobs and improved access to Child Care: Cameron’s platitudes only offer a worse future for Britain’s women, as inflation erodes their already low pay and as the statutory minimum income per hour is deliberately set to increase by less than the rate of inflation.

2.9 Concluding comparisons on Shinzo Abe’s speech

Finally in the closing Section 7 of his speech, Shinzo Abe quotes Shimomura again:

“I would like to close my remarks with a different quotation from Dr. Shimomura, whom I spoke about earlier.

This statement can be found in the preface to his 1960 research paper entitled, “Fundamental Issues in Growth Policies.” It is a powerful message from Dr. Shimomura to Japan as it was about to begin its full-scale period of high economic growth.

“It is our own choices and determination and our creative endeavours in the present that will determine our fate ten years from now. What will develop this potential and bring it into realisation is not the unenterprising and passive principle of ‘conceding anything to avoid confrontation,’ but rather an ambitious and creative robustness. This is a time for us to move forward with confidence, convinced of the creative abilities of the Japanese people.”

I believe in the abilities of the Japanese people. The Japanese economy will grow robustly once more through the strength of the Japanese people. Grounded in this belief, I will formulate a Growth Strategy of a nature altogether different from what has come before and execute it resolutely.”

Cameron of course, like the previous Conservative leader he most admires, Mrs Thatcher, has no programme at all for improving the lot of the majority of the British people.

3 Concluding Comments on the Abe-Cameron Comparison

Shinzo Abe has a personal philosophy of the inclusion of all the Japanese people in his growth plan, and he is ruling Japan in the interests of all its people. Cameron has no similar philosophy of social and economic inclusiveness and he is ruling the UK in the interests of the already rich and privileged, as his reduction in the tax rate for individuals earning over £150,000 demonstrates.

Cameron offers the UK more of the same failed Thatcherist policies of pointless privatisations, more death to private companies through enabling the seedbed of future British prosperity to be acquired by foreign-based companies funded by the more competent financial-industrial systems in Asia and the EU.

It’s all going to work for Japan. Shinzo Abe is very able and focused on doing almost everything necessary to ensure a better future for all the Japanese people. The Japanese Government, led by Shinzo Abe, is a first class government, acting competently to deal with present emergencies, providing the credit-created investment monies to improve Japan’s future, and improving the lot of all the Japanese people, while taking no divisive or damaging actions to the current welfare of the Japanese. Shinzo Abe clearly knows what he is doing and where Japan is going.

Cameron has no comparable programme for the improvement of the UK. His cabinet is socially upper class but intellectually defective: a broken government. I do wish Cameron was even minimally competent and not quite so pathetically inadequate by comparison. The Conservative Party under Cameron have turned into a kind of British Republican Party, isolationist and xenophobic, pretty well unelectable except through frightening the electorate by using the idea that any incoming Labour Government might be worse. But the performance of this Cameron-led Coalition Government is so appalling that such a case is very difficult to make.

If the Cameron-led Coalition Government of the UK completely suspended all of its “chase-the-depression-down” economic measures, the economy would actually improve. Instead, failing to deal competently with current emergencies, failing to arrange investment development monies and failing to improve the funding of company investment in the UK, worsening the lot of the British people through an unnecessary fiscal squeeze, and creating great uncertainty and potential division in the UK and the EU – zero out of four – the Coalition has no plan for improvement. The continued existence and activity of the Coalition Government actually worsens the operation of the British economy and the future wealth and welfare of the British people. Things will get better when they are no longer in power. The austerity programme which is the central plank of all their policies was completely unjustified in the past and is totally unnecessary for Britain’s future. As Kenneth Kenkichi Kurihara has put it

“If, therefore, greater investment can be financed partly by credits, there is no need for that ‘abstinence’ which the classical economists considered necessary for economic progress, any more than there is for that ‘austerity’ which some present day underdeveloped countries impose on already under-consuming populations at the constant peril of social unrest. Nor is it difficult, in such credit-creating circumstances, to agree with Keynes’ observation that investment and consumption should be regarded as complementary rather than competitive.”

Kenneth K Kurihara, Applied Dynamic Economics, 1963, George Allen and Unwin, Ltd p60.

4 Conclusions

Shinzo Abe understands Shimomuran economics and he has declared his intention that Japan will once again practice investment credit creation on a massive scale to bring about another era of much higher growth based upon the involvement of all the Japanese people and their innovative talents especially in the key emerging technologies in the health sector. He knows exactly what he is doing, he has considered his policy options in great detail and he is offering inspiring leadership as well as a detailed programme for the achievement of his objectives. Japan is fortunate to have such a great leader in this time of troubles.

The Cameron-led Coalition Government have no idea whatsoever about how to produce a better future for the British people. They do not understand how wealth creation works and the positive role that banks can have in a modern economy.

The only idea they do practise is to sacrifice national prosperity in order to achieve fiscal rectitude. They don’t understand that such an approach is completely invalidated by Shimomuran economics, and they would all be much more at home with the failed policies of the 1930s than in the 21st century. Cameron offers no positive vision of the future to the British people except for the dismal prospect of another plateful of Thatcherism and unending rounds of welfare cuts. His cabinet are equally broken. The people of Britain deserve much better than this bunch of Eton-led, out-of-touch, callous and inept clowns.

What a painful comparison, between the highly intelligent, great unifying Japanese Prime Minister Shinzo Abe, acting in the interests of all the Japanese people, and the broken government of the broken Prime Minister Cameron, who has had no experience of a real job, and who fell from Conservative Office into becoming the British Prime Minister without any positive idea about how to lead the British people out of the credit-crunch depression but instead is making things worse for most of the British people.

© George Tait Edwards 2013

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This post was written by George Tait Edwards