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c h a p t e r s e v e n The Restructuring of Global Markets and the Future of the Capitalist World-Economy We first summarize our analysis of Japan’s economic ascent and then compare this case to earlier cases of dramatic economic ascent that have transformed global industries and environments. We also analyze Japan’s economic stagnation, as well as the relationship between Japan’s and China’s dramatic rise. We then use our analysis of Japanese and Chinese economic ascent to assess the emerging parameters of the capitalist world-economy in the twenty-first century. Conclusions from Our Analysis of Japan The pattern of state-sector-firm relations that funded and assisted the steel and shipbuilding industries and the MIDAs drove Japan’s internal development in a wide range of industries linked directly and indirectly to these generative sectors. This pattern of state-sector-firm relations provided the foundation for Japan’s rapid economic growth from the 1950s through the 1980s. The Japanese development model of the post–World War II era embodied a dynamic tension between the material processes underlying economic ascent, processes of global economic and political competition, and a constellation of social groups seeking to shape this development model and capture the benefits that resulted. MIDAs, the linchpin and physical manifestation of the Japanese model of capital accumulation, restructured nature, the Japanese economy, and the capitalist worldeconomy . State policies and investments combined with private firms’ strategies and investments to enable the smooth and efficient movement of massive volumes of raw materials to Japan for transformation into industrial products.This coordination manipulated nature, space, topography, and existing economic and social structures in search of private profits. MIDAs represent a clear case of state-sector-firm organiza- Restructuring Global Markets and the Capitalist World-Economy 189 tion of unprecedented scope and cost in response to the increasing scale, geographical scope of sources and markets, and technical complexity of bulk raw materials industries . The cumulatively sequential punctuated evolution of the world economy by the end of the twentieth century made development on this scale imperative in order to resolve the contradiction between economies of scale and diseconomies of space on a truly global scale. In the international arena, the experience gained from accessing coal and iron ore in Australia via long-term contracts with minimal Japanese capital investment laid the foundation for the tremendously successful program for diversifying sources,with capital expenses largely met by exporting states and firms. The Japanese steel firms and the Japanese government, with initial and ongoing support by the existing hegemon , the United States, successfully restructured the world coal and iron ore industries to supply low-cost coal and iron ore to Japan. These strategies transferred the vast bulk of costs and risk to mining firms and state and national governments inAustralia and, later, in Canada, Brazil, South Africa, Indonesia, and even in the United States itself. The new combination of large-scale mines and large-scale transport facilities, while reducing the cost per ton of production and transport, greatly restricted the markets available for these mines’ production. The coordination of Japanese steel firms in negotiating prices for coal and iron ore, the high capital costs of these mines that make sales even at a loss essential in order to service high debt loads,and the construction of dedicated infrastructure by extractive states and firms all combined to give Japanese steel firms tremendous advantages in bargaining over purchase terms. This restructuring and globalization of the world coal and iron ore industries became a fundamental material and economic pillar of Japan’s rise as an industrial power and challenger to U.S. economic hegemony. At the same time that this model of capital accumulation had such salutary effects in Japan, equally dramatic but far more negative consequences for raw materials– exporting regions emerged. Japan’s success in stimulating excess capacity in the now global coal and iron ore industries and the cheap long-distance transport its shipping technology made possible enabled Japanese firms to choose between multiple suppliers of coal and iron. They used their strengthened bargaining position to push down prices, to reduce their equity participation, and in some cases, particularly in Canada and Australia, to reduce the volume of imports to which their long-term contracts had committed them. The cumulative costs and losses to exporting regions and firms totaled many billions of dollars as the price of becoming part of Japan’s raw materials...

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