A Hard Look At The Crisis In Japan And Its Political Economy

Japan has reputation of operating under a strong predisposition to consensus. This article describes the economic and political chaos in Japan today. At a very general level, there is political disenchantment in Japan with politics as usual. This has led to a populist revolt that is similar to that of the tea party in the US. There is also a movement away from the consensus that led Japan in the direction of a version of capitalism more similar to that of the Washington Consensus. That is, privatization and liberalization of the economy. The nuclear crisis in Japan is at the root of disenchantment with government, but it has also created a major economic problem. Japan had 30 nuclear power plants before the disaster; today only one is operating and there is a strong popular sentiment against the use of nuclear energy. Since Japan has no domestic source of energy, it must import energy, the price of electric power is on the rise. Many fear that rising energy prices will cause domestic manufacturing to migrate to countries with lower energy prices. The potential loss of manufacturing exports, and the need to import energy, may put an end to Japan's trade surplus. Its no wonder, given these problems in Japan, that consensus is on the wane.