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Dogs and Demons :: Керр Алекс
Страница: 61 из 270She took her bondholdings to other banks,which were glad to lend her more billions because she had such blue-chip collateral.
This system flies in the face of Western economic theory, but it worked brilliantly in Japan for the first years after World War II, allowing Japan to pull itself up by its own bootstraps. Karel van Wolferen calls the system «credit ordering,» and it is important to remember that it really did achieve great success, turning Japan in a few decades into the world's second-largest industrial power. Since then the South Koreans have copied Japan's credit ordering and so to a greater or lesser extent have most of the so-called Asian Tigers.
This new paradigm of capitalism once appeared to have triumphed over old-fashioned Western values such as the law of supply and demand. There was just one little flaw. As Nigel Holloway and Robert Zielinski wrote back in 1991, «The competitive advantages that Japanese companies gain from their stock market depend on a single factor: share prices must go up.» The Ministry of Finance patched together an intricate machine to support this market: stocks that yielded no dividends, real estate that produced no cash flow, debts that companies never needed to repay, and balance sheets that legally hid losses and liabilities. In this market, no Japanese company could ever go wrong. It was the envy of the developed world.
It was a powerhouse, but it also was a Ponzi scheme. Ponzi schemes work well as long as money keeps flowing in; when the flow stops or slows down, trouble ensues. During the period of high growth that lasted until the late 1980s, Japan's financial system seemed invincible. The economy grew at an annual rate of 4 to 6 percent for so long that everyone took it for granted that this would continue indefinitely. When, in the early 1990s, it slowed to 1 percent or less, the system began to fall apart.
The aim of the contraption the Ministry of Finance had rigged up for Japan's financial world was peace or, rather, stasis. No bank could ever fail; no investor could ever lose by playing the stock market. Everywhere, cartels and monopolies ruled, guided by the firm hand of bureaucrats. This desire for peace, for no surprises, is such a strong factor in traditional Japanese culture that the Law of No Surprises comes first in my personal Ten Laws of Japanese Life. There is no better paradigm for this than the tea ceremony, where detailed rules determine in advance every slight turn of the wrist, the placement of every object, and virtually every spoken word. No society has ever gone to such extreme lengths to rein in spontaneity.
This system flies in the face of Western economic theory, but it worked brilliantly in Japan for the first years after World War II, allowing Japan to pull itself up by its own bootstraps. Karel van Wolferen calls the system «credit ordering,» and it is important to remember that it really did achieve great success, turning Japan in a few decades into the world's second-largest industrial power. Since then the South Koreans have copied Japan's credit ordering and so to a greater or lesser extent have most of the so-called Asian Tigers.
This new paradigm of capitalism once appeared to have triumphed over old-fashioned Western values such as the law of supply and demand. There was just one little flaw. As Nigel Holloway and Robert Zielinski wrote back in 1991, «The competitive advantages that Japanese companies gain from their stock market depend on a single factor: share prices must go up.» The Ministry of Finance patched together an intricate machine to support this market: stocks that yielded no dividends, real estate that produced no cash flow, debts that companies never needed to repay, and balance sheets that legally hid losses and liabilities. In this market, no Japanese company could ever go wrong. It was the envy of the developed world.
It was a powerhouse, but it also was a Ponzi scheme. Ponzi schemes work well as long as money keeps flowing in; when the flow stops or slows down, trouble ensues. During the period of high growth that lasted until the late 1980s, Japan's financial system seemed invincible. The economy grew at an annual rate of 4 to 6 percent for so long that everyone took it for granted that this would continue indefinitely. When, in the early 1990s, it slowed to 1 percent or less, the system began to fall apart.
The aim of the contraption the Ministry of Finance had rigged up for Japan's financial world was peace or, rather, stasis. No bank could ever fail; no investor could ever lose by playing the stock market. Everywhere, cartels and monopolies ruled, guided by the firm hand of bureaucrats. This desire for peace, for no surprises, is such a strong factor in traditional Japanese culture that the Law of No Surprises comes first in my personal Ten Laws of Japanese Life. There is no better paradigm for this than the tea ceremony, where detailed rules determine in advance every slight turn of the wrist, the placement of every object, and virtually every spoken word. No society has ever gone to such extreme lengths to rein in spontaneity.