Referring to a major dialogue between Takeshi Nakano and Ryuichiro Matsubara published in the monthly magazine HANADA, the author argues that newspapers are structurally incapable of conveying the true essence of complex economic issues due to their limited space. Export-led growth suppresses real wages and fails to enrich Japan, while true domestic-demand expansion means channeling Japan’s vast private assets into the Tokyo Stock Exchange. With roughly 70 percent of daily TSE trading dominated by foreign capital, Japan has long been a guaranteed profit market for overseas investors. The author asserts that this structural reality fully explains Japan’s prolonged stagnation and that a thinker of Nakano’s caliber should immediately grasp this point.

To begin with, it is impossible for newspapers to carry editorial pieces of this volume.
2017-01-29.

This month’s issue of the monthly magazine HANADA (840 yen) also contains many essays well worth reading.

It was around the time I first appeared in such discussions that I came to know Mr. Takeshi Nakano. At the same time, I am convinced that he is also one of the very few who truly understands the meaning of my “Turntable of Civilization.”

A dialogue between him and Professor Ryuichiro Matsubara is featured from pages 50 to 71, moreover laid out in three columns.

To begin with, it is impossible for newspapers to publish editorials of such volume.

Therefore, the essence of matters is in fact not conveyed by newspapers. What newspapers convey, at best, is the emotional opinions of their editorial writers, and at worst, their distorted ideologies—it would not be an exaggeration to say so.

While reading their dialogue, I realized in a paradoxical way the correctness of what I had pointed out when I first appeared on this stage.

Capitalism is based on the private ownership of land and is established through finance and the stock market. Among politicians of democratic states founded on capitalism, there is not a single one who governs while ignoring the stock market.

[Omitted in the original text.]

And, quite foolishly, as is written in Professor Matsubara’s books and as I myself have written many times, Japan does not become prosperous through export-led growth. Why is that? As long as one aims to profit from exports, real wages cannot be raised easily, because of fear of losing competitiveness. Moreover, since one must compete with overseas players whose price levels are lower, deflationary pressure continues and wages fail to rise further. Consequently, during these ten to twenty years of extreme export-led growth, real wages have already stopped rising. In other words, Japanese people have been strangling their own necks, [omitted]… In truth, a form of growth that expands domestic demand and gradually reduces the trade surplus would lead to greater prosperity and, as Professor Matsubara just said, would also befit Japan’s stature as a major nation and benefit the world. Despite this, present-day Japan continues endless foolish arguments about trying to lecture Trump on the importance of free trade or persuading him to allow export-led growth to continue.

[Omitted.]

I believe there is one point that Mr. Nakano has overlooked. As is well known, I appeared by arguing that the situation in which 70 percent of daily trading on the Tokyo Stock Exchange—the stock market of Japan, a nation where the Turntable of Civilization is turning—is dominated by foreign capital must be rectified.

What both men refer to as the expansion of domestic demand is, in my view, synonymous with inducing the world’s largest class of private assets held by Japan to be invested in the Tokyo Stock Exchange.

Whenever global markets move into a risk-off phase, the yen is invariably bought as a safe asset, and the Nikkei Average declines.

In other words, for foreign capital, Japan has been a market from which absolute profits could be obtained. The Nikkei Average remained in a long stagnation for over twenty years. It was only with Abenomics that it finally began to rise.

A man of such keen discernment as Mr. Nakano should be able to grasp this instantly from this single point alone.