Читать книгу The Chrysanthemum and the Eagle - Ryuzo Sato - Страница 10

The Supremacy of the Dollar. Structural Impediments Initiative talks or “containing Japan”—call it what you will—both are indicative of a desperate fight for the preeminence of the U.S. economy. Why has America, a country whose overwhelming postwar power and affluence led it to assume the roles of the world’s banker and policeman, seen its formidable lead in world economic affairs slowly slip away? The answer is inherent in the very nature of the postwar monetary system, the International Monetary Fund (IMF), which was advantageous to the United States in the short run, but not in the long run.

Because the American dollar is the key global currency, other countries have to export to earn foreign currency (dollars) and then use those dollars to buy (import) the things they need. After the war, for example, Japan wanted to import because it had no natural resources, but it needed dollars to do so. It launched an export drive to earn those dollars and, finally, at the end of the 1970s, around the time of the second oil crisis, it achieved a balance between imports and exports. Or, to put it another way, enough profits on sales had built up in the country’s coffers so that it could buy whatever it wanted.

On the other hand, because the dollar has been the key currency used by the free world throughout the postwar period and is accepted both at home and abroad, America alone can import whatever it wants without having to export first. With some exaggeration one might even say that as long as the United States prints dollars, it has the right to buy anything in the world. Even without the money readily at hand it can buy on credit. That is one of the advantages of controlling the key currency.

This situation will continue as long as America maintains its grip on world leadership. But when, as now, American competitiveness is declining, controlling the key currency becomes a disadvantage. What was beneficial in the short run becomes a handicap over the long run. The flip side to the short-term advantage of being able to buy anything you want without making any export effort is that two big bills eventually come due—a long-term deterioration of international competitiveness and an ingrained habit of import consumption.

Thus, lurking in the background of the debate about containing Japan are these systemic factors of short-term advantages and long-term disadvantages. This raises the question of whether it might be a good idea to change the system, but in point of fact there is no currency at present that is capable of replacing the dollar as the key currency. And even if there were, the United States would not accept such a course of action. Suppose, for example, that the yen grew even stronger and Japan invested huge sums of money in the IMF, thus eclipsing the U.S. contribution and winning a stronger say for itself. America would be upset. Even if the United States has declined in real strength, it is not likely to give up its prerogatives of world leadership. That is not the way superpowers behave.

If some worldwide upheaval or major cataclysm occurred, the situation would be different. The dollar replaced the pound as the key currency when world leadership shifted from Britain to the United States after two world wars. For leadership to be transferred during peacetime as the result of deliberations is inconceivable.

The Fragility of Economic Power. In July 1944, at the height of World War II, the foundations for today’s International Monetary Fund system were laid at an international conference held in the town of Bretton Woods, New Hampshire. This conference to define the workings of the world economy in the postwar period was attended by representatives of the Allied countries, including John Maynard Keynes of Great Britain and Harry D. White of the United States. The conference would not only establish a monetary system, it would also determine whether the pound or the dollar would have primacy in the postwar world. By this time the Allied countries could read the signs of German and Japanese defeat and had begun to take steps accordingly.

Keynes’s concept was that the IMF should act as a clearinghouse, coordinating and maintaining a balance so that no particular country would become too weak or too strong. This, of course, was a desperate attempt to preserve British authority and save the pound. White’s plan was to place America at the center and subordinate all the other countries around it like satellites. It tied the dollar to the gold standard and created a fixed exchange rate for all other currencies. Despite Keynes’s strong opposition to White’s plan, there was no contest between the ascending dollar and the setting sun of the British pound. Keynes’s arguments fell on deaf ears. The key currency shifted from the pound to the dollar, and world leadership shifted from Great Britain to the United States.

The present IMF system thus came about in part through American steamrolling, and America is unlikely to give up control of the IMF unless it is forced to do so. The IMF was created at a time when America accounted for 52 percent of the world’s Gross National Product (GNP) and two-thirds of the world’s gold supply. That America with a mere 3 percent of the world’s population had so much wealth is amazing. That period was indeed an unprecedented golden age for the United States, which was able to do whatever it pleased.

Despite Keynes’s desperate efforts at Bretton Woods, the outcome was inevitable. Britain no longer had the political, economic, or military clout to prevent the dollar from replacing the pound as the key currency. Though it has declined since those heady days, the United States remains a great power. Replacing America today with second-place Japan or Germany would leave much to be desired. But even if these countries were absolute equals with the United States, the transfer of leadership as the result of discussion is inconceivable. History teaches that there has to be some dramatic upheaval for world leadership to shift.

We therefore cannot expect any change in the IMF system until America becomes much weaker and the number-two powers much stronger—and much stronger not only in terms of their economic capabilities. In order to attain superpower status a country also needs physical, that is, military, strength. Economic power is too fragile to respond in emergency situations. In the 1980s Japan went on a shopping spree, buying up America and investing elsewhere overseas. If the laws changed or a war broke out in any of those foreign countries, however, Japan’s foreign investments would be frozen or confiscated and that would be the end of that.

At present Japan does not even have the power to protect Japanese corporations that have set up businesses overseas. Take the case of the Iran Japan Petrochemical Company, a joint venture between Iran and members of the Mitsui group. Its plans to build a petrochemical company in southern Iran were interrupted first by the Khomeini revolution and then by the Iran-Iraq war, resulting in the loss of millions of dollars. If Japan had had military capabilities, the results might have been different. Japanese oil tankers sailing into the Persian Gulf would not have had to seek American protection during the Iran-Iraq war. At the very least, there would have been no outcry in the United States about Japan’s getting a free ride militarily. More recently during the Gulf War, I repeatedly heard Americans ask why the lives of American young people should be sacrificed to give Japan access to the oil it needs so that it can go on making money. Despite having contributed $13 billion to the war effort, Japan had little say, diplomatically speaking, in the postwar settlement. Most Japanese sense that Japanese diplomacy carries little weight. Does any country look to the prime minister of Japan for leadership? Though it may pride itself on being an economic superpower, Japan is still frustrated by its relative powerlessness on the world scene.

To turn the argument around, it could be said that Japan, which has so little political or military strength, has come to have too much economic power. Having written this, I should hasten to say that I am not a Japanese nationalist or a hawk who wants to see Japan rearm. As a realist I am merely pointing out the obvious. Shintaro Ishihara’s statement that Japan might call on Russia to defend it if America tried to contain Japan is nonsense. In such an event, Russian demands are unlikely to stop at microchips. To put it bluntly, as far as most Japanese are concerned, Russia is not the country that they are most likely to trust. The realistic view is that it would be far better for Japan to listen to America’s complaints than to join hands with the country that stole Japan’s Northern Territories at the end of World War II.

Excessive Exports versus Excessive Imports. In order for the dollar to function as the key currency, America must reconsider its special right to cheap imports and exercise restraint. If it is going to be the world’s leader, it must act like a leader and show more self-control. This means becoming more internationally competitive and achieving a trade balance through an export effort or through a further devaluation of the dollar. Competitiveness can be achieved by letting the dollar fall even further, but there is an inherent contradiction in a constantly declining dollar. A key currency that falls unchecked makes no sense as a key currency. Thus, as long as the dollar is the key currency, it must not be allowed to fall indefinitely.

After the Plaza Accord, the dollar plummeted and by 1988 it had reached an exchange rate of 120 yen. At the time some predicted that the dollar might drop even further to the 100-yen or 80-yen level. (At the time this book went to press, the exchange rate was fluctuating between 125 and 104 yen to the dollar.) Although logically speaking it is not strange for the value of the dollar to go down, as a key currency it should not do so. It cannot depreciate so much that it loses its meaning as the key currency. So, in fact, America had no alternative but to become more competitive and increase exports. Since it is impossible to regain over night something that has been lost over a period of years, the real agenda behind the SII trade talks was to get Japan to import more American goods and to get the United States to import less from Japan.

This put Japan in a peculiar position. Because exports had exceeded imports for some time, Japan had excess reserves that enabled it to import whatever it wanted. It was no longer necessary, as it once had been, to export in order to import. Thus, just as America continues to import even though it can no longer afford to do so, Japan continued to export even though it no longer needed to do so.* This exporting for the sake of exporting is illogical, economically speaking. The more Japan exports, the stronger the yen grows and the more unprofitable exporting becomes. It would make far better sense to spend the money at home. But no effort whatsoever was made to apply the brakes to Japan’s export drive. The more Japan exported, the more money came in so that it became even harder to say “stop.” What corporation would be willing to cut back exports and reduce tangible profits for the intangible good of the state? The worst aspect of all this is that Japanese society looks up to businessmen as its heroes, and everyone—both inside and outside government—listens to their views. The Recruit scandal and, more recently, the revelation of payments made to leading Diet members by Sagawa Kyubin, a parcel-delivery company, have given a glimpse of how pervasive the practice of influence buying is in Japan, and how deeply politicians are in the pay of business.

* Japan’s economic growth has reduced the already low level of Japanese imports still further. As imports decline and exports increase (or even remain the same), the trade surplus continues to grow.

America faces a similar dilemma. The fact that the dollar, as the key currency, cannot fall below a certain point, makes it even more difficult to say “stop importing.” Paradoxically, what has happened in both Japan and the United States as far as business is concerned is entirely rational economic behavior, and we can only assume that the present situation will continue as long as the IMF system remains unchanged.

Made in Japan—Breaking Down the Exchange Myth. As I mentioned earlier, when the value of the dollar declined by half and the yen doubled, Japanese corporations ended up making exactly the same profits as before. That was odd enough, but the 1985 currency realignment caused another strange phenomenon to occur. American exports to Japan ought, in theory, to have sold for half their former price (provided that demand elasticities were close to unity). This did not happen. At the very least, the curious sight of Japanese bringing back armloads of European goods that they had bought in the United States ought to have disappeared, but the crowds of Japanese shoppers in airport duty-free shops did not diminish at all. In other words, the benefits from the yen’s sharp rise against the dollar were not adequately passed on to Japanese consumers. Nor did prices for Japanese goods rise sharply in the United States. Since the value of the dollar was half what it used to be, the prices of Japanese goods ought to have been double what they once were, but that was not the case.

In fact, between 1985 and 1989 the prices of Japanese exports to the United States rose only about 8 to 10 percent despite the fact that the yen had doubled in value. How was that possible? There are two lines of thought on this matter. The first view is that Japanese businesses did not take much of a profit on their exports, that they made their money by setting a high price domestically and holding down export prices to a level where they at least did not sustain a loss. The other view is that, to ride out the strong yen, Japan focused its efforts on restructuring and technological innovation. As a result, costs came down so substantially that there was no need to raise prices.

Although the cheap dollar seemed to offer the United States the perfect opportunity to expand its exports to Japan, it was unable to do so. Why? There are two lines of thought on this question as well. One is that America’s export effort was inadequate; the other is that the Japanese market has so many barriers that no matter how hard America tries it cannot get in.

All of these views are probably true. The price of Japanese goods certainly did not double. That is because Japanese business took the loss, and also because they steadily reduced costs and thereby increased their ability to resist the effects of a strong yen. The fact that American exports to Japan did not noticeably increase is due both to the failings of America’s own export efforts and to Japan’s reluctance to open its market. These overlapping factors formed the background to the Japan-U.S. Structural Impediments Initiative talks.

Yet, while everyone complained that the price of American exports to Japan did not go down in proportion to the yen-dollar exchange rate, even though this proved disadvantageous to the Japanese consumer, everyone blithely accepted the fact that prices for Japanese exports to the United States did not rise much. Properly speaking, the amount of increase or decrease should be symmetrical, and it seems unfair that there was so much hostility to the one and no acknowledgment of the other. After all, if the price of Japanese goods ought to have risen by 100 percent, but Japanese companies kept the increase down to only 8 to 10 percent, they ought to be thanked for their contribution to holding down inflation in the United States. But instead of being grateful, Americans blamed Japan for the fact that U.S. products did not sell for half price in Japan. This is what economics calls asymmetry.

Physical phenomena usually occur symmetrically. If 70 degrees Fahrenheit is the ideal temperature for human beings, then anything higher than 70 degrees is considered hot, anything lower is cold, and discomfort is felt proportionally at the higher or lower temperatures. Although the same ought to hold true for economic phenomena, one extreme was welcomed, the other was decried. That is what makes economics so difficult. It is human nature, of course, to keep silent about something advantageous to one’s own pocket-book. The Japanese, however, should have drawn attention to this situation and stated their case firmly, but they remained strangely inarticulate. If Japanese officials and the mass media had made Japan’s position better known to the American public, the attitude of ordinary Americans might be considerably different. It would certainly be more beneficial to both countries if the Japanese media concentrated their talents and efforts on giving a clear account of Japan’s position rather than producing sensationalist programs like the one mentioned earlier on American racism.

The appreciation of the yen and the devaluation of the dollar after the 1985 Plaza Accord did not have the expected results. The participants now concede that all their tinkering with the exchange rates had almost no effect on imports and exports. Take, for example, the videocassette recorder (VCR). In the beginning neither the Japanese nor the Americans anticipated the size of the market for VCRs. The machines did not sell well at all in the 1970s, but in the early eighties they suddenly became popular, and by 1985 nearly a third of all American households had VCRs, almost all of which were made in Japan. After the Plaza Accord the yen suddenly shot up and the dollar dropped, until ultimately the yen was worth nearly twice what it had been. Logic dictates that the price of Japanese VCRs should have doubled during that period and sales should have dried up. In fact, after 1985 sales of VCRs rose by leaps and bounds, first, because the price did not go up and, second, because American incomes increased greatly after 1985. As a result, Japanese exports of VCRs grew seventeenfold between 1985 and 1990, and by 1989, 75 percent of all American households had a VCR.

One other factor needs to be taken into consideration to account for the failure of the currency realignment to affect sales of VCRs: Japan’s virtual monopoly of the VCR market. A monopoly renders the exchange rate mechanism ineffective because the exchange rate can adjust for surpluses and deficits only when substitute products are available from other countries. At present, export figures for VCRs are declining, an indication that the market is mature and that most purchases now are to replace older models. But a situation quite similar to the one for VCRs in the 1980s is evolving in the market for facsimile machines. As in the case of VCRs, Japanese companies have a virtual monopoly on fax machines.

Although, all things being equal, the currency re-evaluations should theoretically have caused the Japanese share of the VCR market to fall from 33 percent to 15 or 16 percent, just the opposite occurred. As American prosperity led to increased absorbability, economies of scale were brought into play and unit costs came down. Meanwhile, to counter the strong yen, Japanese businesses restructured and put greater emphasis on technological innovation and automation that led to wholesale cost reductions. In short, economies of scale and technological innovation made possible low-cost mass production so that Japanese VCR manufacturers were able to achieve a seventeenfold increase in sales despite the adverse climate resulting from the strong yen.

As a result, the Japanese consumer electronics industry achieved an unrivaled position, nearly a monopoly, flooding world markets with goods labeled “made in Japan.” Japanese goods earned such enormous profits that the question of who was more at fault for this flood tide—those who import or those who export—ceased to have any relevance. Nothing seemed to be able to check the Japanese export juggernaut. Under the circumstances, what other course was open for America except, as Fallows suggests, to consider the new ploy of containment?