Could the Bank of Japan run Japanese Economy alone?

Since Nikkei index plummeted in 1990, Japan’s economy entered into long-term declining stage. It was the ending of Japanese post-war prosperity where once its GDP climbed to second largest economy in the world. Most people understood the harsh reality of this debacle. When the economic inertia dragged on without prospects into new century, Japanese intellectuals argued the issue openly for the first time in its modern history.

Absolutely unknown to the general public, this political mechanism was investigated by Yukichi Fukuzawa in 1875 – The Summary of Civilization Theory. He argued with his global research helped by Britain, France, Americans and five other European countries, also by travelling major commercial ports in Eurasia and America. His message was; The principle of modern politics – democracy – should be prominent at state level. Toshihiko Izutsu analysed on this argument from the indispensable philosophical viewpoint. But this East-Asiatic nation still stands economically-immobile under massive policy failures. Rather Japan is politically-bankrupted already. (A British economist predicted: Next shrinking stage will start from 2025.)

On the other hand, today’s Japan has superb studies of comprehensive Eurasian history made by their scholars in social science. So, people should not be too pessimistic. With such progress, Kazuhide Uekusa stood up for the challenge. Analysing the irrational financial practice of Japanese government, he concluded: This was due to Japan’s ancient politics, which he defined as 1600 system (Japan’s long period of irregular isolationism from the rest of the world under Tokugawa Shogunate, which lasted c. 260 years). Under such gravity, Kenji Mizutani cautioned: This downturn trend has serious implications, where Japan should declare the state of emergency to launch a thorough reform for recovery. Junichiro Koizumi’s reform attempt (2003-2006) was to confirm the limit of ordinary Japanese politics.

To sustain in this negative trend, BOJ had to step in – with the policy originally conceived by Japan’s international finance mogul – Korekiyo Takahashi in the Pre-WWII Japan. Shinzo Abe asked BOJ Governor Haruhiko Kuroda to act. However, no one in Japan could perceive the nature of such political reform, defined by them as Third Arrow. The solution is simple but almost impossible to achieve – To establish Japan’s Modern Political Economy. Then, to show China and Koreans that they could also survive by creating Modern East Asia, like anywhere else in the world.