Table Speech

Economics of Human Recovery

July 13th,2005

Head of the Tokyo University Post Graduate School Economics Department and that of the Economic Research Section
Professor Naohiko Jinno

The long lasting economic depression has also plunged our country into a social crisis. More than half of our people now believe that our most important goal is to create a safe and secure society. The first reason for this is the increase in juvenile crime, and the second is the growth of abnormal crimes. The reason for this, I believe, is due to a break down of our community, and this is due to our being at a turning point in history.

At such a time in history, the Pope issues a Rerum Novarum, which means ‘new’ or ‘reform’. The last Pope Johannes Paulo issued one in 1991, and he consulted with Honorary Professor Hirobumi Uzawa regarding its contents.
Professor Uzawa suggested that as a subtitle the sentence ‘The evils of Socialism and the fantasies of Capitalism’ be used.

Johannes Paulo was from Poland, which suffered from the inhuman suppression of socialism, and then being released from that suffered from unbridled competition and market control resulting in a very unfortunate condition. This was the reason for Professor Uzawa’s suggestion to the Pope.

In order to know when we have reached a turning point in history, we should see when the Pope issues a Rerum Novarum. In the past, Pope Leo 将 issued one a century ago in 1891. The World suffered a Great Depression which started in 1873, and his Rerum Novarum was subtitled “The damage of capitalism and the fantasy of socialism”.

Pope Johannes Paulo has left behind a message, “What we must search for is an economic system which will rise above capitalism and socialism to uphold human dignity and free the soul”.

What is important in this time of great social change to create a new social economy cross the pass with hope and optimism - which is what they are saying in Sweden.

Since the Meiji Restoration (1878) many foreigners have visited Japan. They have said that the Japanese have modesty, they are gentle and that the are leisurely. Another point they made is that they cannot understand why Japanese children laugh so much.

But after the mid 50’s we have last all this and entered a different world. We seem to be trying to cross history’s pass with pessimism and hopelessness. Japan’s wealth increased, and she led the U.S. in per capital national income in 1985.

The Americans forced their national standards on the Japanese, and made us spend huge sums on social engineering projects. Competition, relaxation of rules and privatization became the rule causing the bubble to arise.

But the Scandinavian countries were successful during those times. When the bubble burst in 1993, and the Japanese Government finances were running a minus of 1.3%, Sweden was minus 12.3%. The European nations believed that the basis of their intelligence industries was finance, and in order to balance their budgets they created the Euro and set a target of reducing their national deficit to less than 3% by 1997.

In 1999, the first year of what we call the lost decade, our deficit was 7.8 of our GDP while Sweden’s was 1.1% which has since then been running in the black.
The belt tightening caused strikes to occur as unemployment rose and in France in 1997, unemployment rose to 12.5%. In Japan, it was 3.5% in 1997 but rose to 4.3% in 1998.

In Sweden, the government pledged that it would have the unemployment rate by 2000 and kept its word by making it 3.7% that year.

Sweden has succeeded in both restructuring its finances and business whereas in Japan we have failed in both. During 1997 and 1998 Sweden was able to double her intelligence industries, thus changing the structure of her industries in general. They were also able to increase taxes by 5% for the rich in order to pay for the welfare of the others. Government spending was also changed, with expenditures being increased for education and environment. More money is also being spent to improve the education infra-structure. And fourthly, more is being spent for welfare. Due to this policy the birth rate has rapidly gone up in Sweden.

Before his birthday, I was able to introduce a Swedish middle school textbook to our Crown Prince. He was so moved by it that he later read it aloud to a group of reporters. Titled “Children” it relates about the family, the community, mutual understanding and togetherness. It also calls for understanding of restrictions, aid, welfare and our economy. I believe that thus we should study education which will shape our people of the future.