Ha-Joon Chang on the Japanese Solution to Information-Sharing between Government and Business

Ha-Joon Chang Pic

Ha-Joon Chang also discusses in his book, 23 Things They Don’t Tell You About Capitalism, the Japanese solution about the tactics the Japanese have adopted to the problem of sharing information between the government and business. It’s in the chapter ‘Thing 12 Governments Can Pick Winners’. In this chapter, he explodes the myth that governments cannot run industries successfully by showing just how many extremely profitable and efficient industries have been set up by the state. Like the Korean steel mill. This was set up in the late 1950s and 1960s, when the only thing Korea exported was food, mainly fish, and cheap clothing, and when the country generally was one of the poorest in the world. Its first boss was an army general with extremely limited business experience. It looked to be such a risky venture, that the head of the IMF or World Bank refused to lend Korea money, and advised other potential investors not to do so. So no-one did. Korea now has the fourth largest steel industry in the world.

Chang states that the Neo-Libs could argue that Korea is somehow the exception to the rule, and that his countryfolk are somehow more intelligent than everyone else. He says while he finds this flattering as a Korean, it ain’t true, and lists the various other countries that have had similar successes with the state running of industry. He then goes on to tackle the underlying assumption behind the Neoliberal dismissal of governments’ ability to manage industry. They argue that government departments simply don’t have enough information to manage industry well. He argues that in fact, they do, and that quite often it is far better than those of the industrialists themselves. And he states that governments also draw on managers from industry for their information.

This is now part of the problem in Britain and America. It is now longer the case that industry supplies the government with information. In all too many cases, it guides government to its own advantage, and dominates government. The fact that the political parties’ conferences is sponsored by private industries, all seeking to get a cut of state action, is part of this. So the way the big accountancy firms sent their executives to assist the political parties in preparing their policies on taxation, which has led to the creation of the massive tax loopholes and offshore accounts, which have allowed people like Dodgy Dave Cameron to avoid paying his due whack of tax.

The way the Japanese have attempted to solve the problem is through ‘deliberative councils’. These are formal meetings between government officials and businessmen, which are covered by the media and have observers from academia.

I think this is an excellent idea. We desperately need to clear out the corporate corruption of parliament and the political system, so that government legislates for the people, and not to maximise the profits of the rich few at the expense of the rest of us. At the same time, information and experience from industry should be available to government. And that information, and the influence that it gives, should not be hidden, but be genuinely open and transparent.

At the moment, it certainly is not, despite Dave Cameron’s mendacious bill on lobbying. This is actually designed to do the opposite. His lobbying bill stops charities and trade unions from lobbying, while allowing the big corporate lobbyists to go on as normal. And as far as I’m aware, none of the newspapers regularly report on the influence of private enterprise on the parties. The only reports of it I can remember reading are those in Private Eye. This must change, and soon, in order to curtail the corporate corruption of British politics.

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