Capital as Will and Imagination
Schumpeter’s Guide to the Postwar Japanese Miracle
Publication Year: 2013
With this book, Mark Metzler continues his investigation into the economic history of twentieth-century Japan that he began in Lever of Empire. In Capital as Will and Imagination, he focuses on the successful stabilization of Japanese capitalism after the Second World War. How did a defeated and heavily damaged nation manage reconstruction so rapidly? What economic beliefs resulted in the "miracle" years of high-speed economic growth? Metzler argues that the inflationary creation of credit was key to Japan's postwar success-and its eventual demise due to its instability over the long term.
To prove his case, Metzler explores heterodox ideas about economic life , in particular Joseph Schumpeter's realization that inflation is intrinsic to capitalist development. Schumpeter's ideas, widely ignored within standard American neoclassical economic theory, were shaped by his experience of Austria's reconstruction after 1918. They were highly influential in Japan, and Metzler traces their impact in the period from the Allied Occupation, starting in 1945, through the Income Doubling Plan of 1960. Japan after defeat, Metzler argues, illustrates the critical importance of inflationary credit creation for increased production.
Published by: Cornell University Press
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Title Page, Copyright Page
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List of Tables
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The collective enterprises of language and thought are life movements of which we all partake, and we perceive only glimmers of the sources of all we are given. Here I can acknowledge only the most visible help, starting with an appreciation of the fi eld I’ve been working in. Economic historians lament that economic his-tory in the United States has fallen between the two stools of academic history ...
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Note on Terms and Conventions
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References to other parts of the book are by section number, in the format Names of Japa nese people are given in the Japa nese order (family name fi rst), except in bibliographic citations for English- language works in which they were When rendered into the Latin alphabet, Japa nese words are pronounced “¥” in the text means Japa nese yen. “$” means U.S. dollars. Billion means 1,000 ...
Introduction: Inflation and Its Productions
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This book investigates the fi nancial fountainhead of modern capitalist develop-ment: infl ationary credit creation. For empirical material, it uses the experience of Japan in the fi fteen years after World War II, from the period of postwar re-covery to the onset of “High- Speed Growth” in the second half of the 1950s. Japan’s High- Speed Growth itself was a hypercapitalist type of industrial devel-...
1. The Revolution in Prices
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The war was fi nanced as an enterprise through the purchase of goods It’s been called Japan’s infl ation, but from my standpoint the infl ation of whichever country is much the same, as war fi nance is largely Finance was never a limiting factor in the expansion of the war The twentieth century was the most infl ationary century in history. This distinc-...
2. Dramatis Personae
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After World War II, the thought leaders of the generation who directed eco-nomic reconstruction and stabilization looked back refl exively to the problems that had followed World War I, which they had witnessed in their youth. In Ja-pan, several infl uential members of this generation had absorbed these lessons in postwar Germany itself. The experience of the defeated countries of central Eu-...
3. What Is Capital?
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Capital is nothing but the lever by which the entrepreneur subjects to his own control the concrete goods which he needs, nothing but a means of diverting the factors of production to new uses, or of creation → carry ing out of new combinations, represents the fi nancial aspect of Japa nese economic development since the latter part of ...
4. Flows and Stores
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Capitalism . . . is still, to coin a word, revenual. . . . The wealth of the community is its revenue, which, in the last analysis, is a revenue of energy available for the purposes of life. . . . It is impossible to save Why is it that such high savings could be produced from such a low standard of living? Such a high savings rate doesn’t arise out of that ...
5. Japanese Capitalism under Occupation
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Let us assume that an insular nation, which has an active trade with full development in our sense, is cut off from the outside world by an enemy fl eet. Imports and exports alike are obstructed, the price and value system is shattered, obligations cannot be kept, the anchor It was like a kind of experiment on a living body, the various pro-...
6. Inflation as Capital
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Was the postwar infl ation caused by shortages or by overspending? This is the way the question was often posed; and even after the fact, the production- oriented Ministry of International Trade and Industry (MITI) and the funding- oriented Ministry of Finance tended to come down on opposite sides of it. In a retrospective survey of Japan’s postwar economy written in 1956, the chief of ...
7. Interlude (Deflation)
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...“Total war” under modern conditions calls for a concentration of suspends the normal operation of capitalist pro cesses. In doing so it develops, on the one hand, economic structures and situations and, on the other, new social organs and positions of power which them into existence. They have to be liquidated, if at all, by a series ...
8. The State-Bank Complex
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Although in terms of ideology Japa nese society underwent a drastic re orientation after the end of the war, the economic system— particularly the institutional system for fi nancial control— was retained essentially intact. The result was . . . an acute gap between controlled the fl ow of capital, strongly infl uencing the industrial ...
9. The Turning Point
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If all produced means of production were ever to disappear, indeed if all goods, with the exception of the most necessary subsistence goods, disappeared for a certain time period, and only the natural possibilities and the or ga ni za tion of the economy remained— the disaster would not be as big as one might believe. If the leaders were ...
10. High-Speed Growth: The Schumpeterian Boom
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The “postwar” is already over. We are now facing a new situation. Growth through recovery is over. Future growth will be sustained by modernization. . . . The present urgent necessity is to begin a new nation building, riding the world wave of technological innovation.Why is it that industrial and commercial change is not continuously ...
11. High-Speed Growth: Indication and Flow
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In 1963, fl ush with the spectacular overfulfi llment of the Income Doubling Plan, Prime Minister Ikeda’s economic adviser Shimomura Osamu declared that when he heard commentators persist in describing Japan as a “lesser- developed country,” with its “dual structure” (e.g., Arisawa) and its “low wages” and “income gaps” (e.g., Nakayama), it reminded him of Hans Christian Andersen’s story The Ugly ...
12. Conclusions: Credere and Debere
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How is a Debt created? By the mutual consent of two minds. . . . When two persons have agreed to create a Debt— whence does it come? Is it extracted from the materials of the globe? No! it is a valuable product, created out of the Absolute Nothing, by the mere In no other case is it diffi cult to distinguish between an object and a ...
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Page Count: 312
Publication Year: 2013
Series Title: Cornell studies in money