Japan, Refutation of Neoliberalism (2005) | Hacker News Reader

Japan, Refutation of Neoliberalism (2005)

paecon.net

24 pointsIsaacL7 comments

>This is a formidable set of potential liars, equipped with money, technical expertise, transnational reach and state power. The Japanese government is centralized, elitist, and quite capable of fudging statistics if it wants, particularly since there are few Westerners who understand Japanese accounting. National accounting is notoriously susceptible to creative accounting anyway, as the world learned at the time of the Asian Crisis of 1998. So the assumption that the standard published figures about Japan’s economy are true is dubious at best.

I'm very skeptical of any theory which requires me, from the outset, to assume that all the published statistics are deliberate lies.

There are quite a few other bright red flags here. For example:

- the author claims that the growth of net exports is incompatible with a stagnating economy, because the economy is "export-centered." In 2012, Japanese exports were worth around $800 billion; Japanese GDP was almost $6 trillion. I don't find it particularly unbelievable that 15% of the economy can do better than the other 85%.

- the author claims that "although a declining Japanese economy would imply a declining yen, the reverse has been the case." This is one of those things that drives economists crazy. Non-economists associate "strong" currency with economic "strength" essentially because it feels right. But there is no reason to expect this relationship in reality. The USD became 30% more valuable between 1930 and 1932--that was not an indicator of economic strength. Inflation expectations for the USD fell dramatically during and after the financial crisis--that was not an indicator of economic strength. (In fact, the persistently low rate of inflation in Japan is a sign of low aggregate demand.)

Wallerstein's explanation of the overall greater advantages of a strong currency: (http://dollarsandsense.org/blog/2009/05/the-sinking-dollar-w...)

As an interesting book end, read the Economist's coverage of "Abenomics"

[1] http://www.economist.com/news/business/21575825-things-are-l...

[2] http://www.economist.com/news/briefing/21578052-shinzo-abe-s...

[3] http://www.economist.com/news/leaders/21579464-third-arrow-r...

True, but all economic claims should be taken with skepticism. That includes official stats. (As well as claims which fit our own preconceptions.)

Simply look at the various official unemployment measures, and their underlying meanings. They may each be more or less "true", but interpreting them correctly in context is crucial. (For example, when the BLS emphasizes unemployment stats which don't count people who gave up hope of finding work, people are misled into using them.)

Governments and corporations are interested actors. Their assertions feed back into their results. That filters down into their secular priesthoods of academics and PR flacks. People who believe them often find themselves flat-footed when reality rears its head, their mental models failing them.

I feel that his point is more valid than you might think. Japanese society really does place a very high priority on saving face. It perturbs even their language itself. I wouldn't consider it as a deliberate lie but you should not interpret everything a Japanese person says literally. The idea that a company or most Japanese companies would employ similar manipulations of statistics or company press is entirely believable and is almost certainly the case.

Very interesting, I'd love to hear an update on the author's views several years after he's penned that.

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