How did we get here? Part one of an examination

Foreword: This diary is the first in a series examining, inter alia, the political economy of the United States. Much of what you read here will be historical, and general in application.  The drive behind these diaries remains an examination of the current political-economic structure and function, and my conclusions about the 2012 elections. Although this article doesn't mention anything about 2012, please feel free to begin to draw conclusions, make note of any areas you dispute, offer critiques, comparisons, contrasts, and above all, references for future inquiry.

I think that we need to know where we have been in order to know where we are. Thus, I am attempting to write a series of diaries that chronicle, to me at least, some of the major events and major people/entities which contributed to the direction, the trajectory of the US, socially, politically, and economically, since we can't separate one trajectory from the other.

We in the USA face a crossroads with the coming election. The polarization of both sides (which I think of as the Right and the Middle, the Left being irrelevant at this time) may be leading to tumultuous times. I think it best to discuss the phenomenon.  As I am not a lawyer, please post legal cases that may pertain, along with links, if they are available.  I welcome comments and criticism.  

I think an examination of Japan will help us (or me at least), examine what happens in the US at present, so this diary concentrates on the Japanese business model, with many simplifications.

Following the Meiji Restoration in Japan, which began in 1868, Japan made many social and political changes. The main part of the change began with the end of the Shogunate--a 250-year period of relative peace during which powerful leaders of Samurai clans, primarily the Shokugara, ran the country as, in effect, regents for the emperor.

The Emperor was `restored' to a place in government by these events, and further,  the former caste system of Japan was eliminated.  The cast system tiers were:

1.    Samurai

2.    Peasants (or farmers)

3.    Artisans

4.    Merchants

5.    others... not really a caste, but an under-category. The imperial household was placed above the caste system, but everyone else below it.

During the restoration, rapid and massive industrialization became one of the main goals of Japanese rulers, if not the primary goal. Land reforms and taxes on farmers depopulated the countryside and created a large body of unemployed--former farmers and also former farm laborers--to work in new factories, coal mines, and steel mills, among other industrial enterprises.

    Workers in industry had few rights, and they lived in squalor, in unsanitary dormitories or cheap housing created by the companies or the interlocking companies for which they worked, the zaibatsu.

Zaibatsus formed from the merchant class, the only class controlling enough capital to do so.  Zaibatsus, refers to the interlocking business and banking conglomerates, often family-controlled, that wielded great power with the Japanese government.  These interlocking, horizontally structured corporations, at first only two, became silent partners with the militaristic and expansionist wing of the Army and Navy. Ultimately  Zaibatsus created the Japanese war machine. The Zaibatsus also encouraged aggressive expansionist policies beginning with their desire for natural resources in Manchuria.  War with China, and later war with the Allied Powers, stemmed from the combination of militarism (and the power of the military in government) with the support of the zaibatsus.

Following WWII, the US Occupation began the task of dismantling the zaibatsus.  However, The Japanese bureaucracy (through which the US ruled) offered silent resistance. By 1948 US policy changes toward Japan (the beginnings of containment policy) ended the dismantling with some minor changes at the top. These changes were for the most part, cosmetic... the dissolution of the family-controlled holding companies which ran the zaibatsus.

However, these entities have returned, albeit in somewhat different forms. Keiretsu, horizontally or vertically linked subsidiaries, with far-reaching interconnections. A Bank formed the head of each Keiretsu.  As a matter of fact, Japanese business law established share cross-holding to discourage foreign investment and to limit competition between the various corporations within the keiretsu. Thus, any one keiretsu has connections to all others through stocks and executive boards.

During Japan's economic "lost decade," mergers occurred among some of the largest banks, a history I won't go into now at this point, plenty of interesting reading along these lines is available.

Recent judicial decisions, particularly the 2010 `Citizens United v. Federal Election Commission,' combined with the slow erosion or slow gutting of The Banking Act of 1933 (Glass-Steagall) and culminating with the 1999 Gramm-Leach-Bliley Act suggest that concentrations of ownership and the inherent risk of corporation welfare versus either individual or state welfare have become a serious issue for the US.

In my next diary, I want to examine the United States as a contrast and comparison to the zaibatsu/keiretsu business model, and to begin examining its effect on politics in the USA.  The influence (or even outright control) of the Japanese government and bureaucracy has been proposed by many authors and researchers.  These same have made some examinations of US `trusts' and the effect of `trust-busting.'

< Time for analysis, with your help, please | Some notes on Health Care reform. >
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    Keep it comin' matey... (5.00 / 0) (#1)
    by kdog on Fri Jun 15, 2012 at 05:30:44 PM EST
    I'll try to keep up.

    F*ckin' "conglomerates"...even the word is ugly.  Con and glom baby.

    How did we get here, and what are we gonna do now?

    Very interesting. Nothing to (5.00 / 0) (#2)
    by oculus on Fri Jun 15, 2012 at 11:48:21 PM EST
    add etc. as I don't know much about this.  I am still listening to the 46 disc audio book of "The Rise and Fall of the Third Reich."  After the Treat of Versaille, Germany lost the Ruhr and it's natural resources and steel mills.  A must in Hitler's plan of conquest.  Plus, the German industrialists needed a war to pump up the economy:  vast inflation, currency devaluation, unemployment.