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Via Workers World News Service
Reprinted from the Jan.25, 1996
issue of Workers World newspaper
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A political change in Japan and a bankruptcy announcement in the United States both point to a sharpened rivalry between the ruling classes of these two imperialist countries.
This rivalry is expressed not only as bitter competition between the giant monopolies and banks headquartered in the two countries, but also in battles between the two governments. In 1941 it led to a major war that killed millions of workers.
Prime Minister Tomiichi Murayama, leader of Japan's Socialist Party, abruptly resigned Jan. 5. His replacement is Ryutaro Hashimoto, a leader of the rightist Liberal- Democratic Party and a politician with a record of resisting U.S. demands.
As trade minister under Murayama, Hashimoto made headlines last year during acrimonious negotiations over demands to open the Japanese auto markets to U.S. corporations. These negotiations went down to the wire while the U.S. side threatened to impose tariffs and limitations on Japanese exports to the United States.
As transportation minister in the 1980s, Hashimoto fought U.S. corporations trying to win a huge construction contract for an airport near Osaska.
Analysts in the big-business media here expect the change will result in a foreign policy in keeping with Japan's status "as a global trade giant ending a half-century of timidity since its defeat in World War II" and "could spell difficulties for the United States, for he has been unusually forceful and feisty in dealing with America." (New York Times, Jan. 6)
United States-Japan negotiations that threaten to be vicious are scheduled to rewrite a computer-chip agreement set to expire in mid-1996. Meanwhile the computer-chip industry is reporting signs of overproduction and price competition.
At the same time U.S. capital has already committed itself to huge increases in capacity.
As if to confirm the competition between U.S. and Japanese capital, Barneys New York, a privately owned, high-priced apparel store, filed Jan. 11 for Chapter 11 bankruptcy. While some of Barneys unsecured creditors in the United States--like many of the fashion houses--can be hurt, the filing is aimed at breaking Barneys' agreement with its Japanese partner, the Isetan Company.
This is especially important because it involves yet another bankruptcy of a U.S. company with heavy Japanese investment. Mitsubishi Bank directly took over the management of the Isetan Company in Japan in 1993 after Isetan got into trouble with its bank lenders and shareholders. Mitsubishi Bank owns Mitsubishi Estate Company, which was involved in the bankruptcy at Rockefeller Center.
Before this partnership, Barneys had only one store in New York. Isetan helped finance the opening of 13 stores in total in the United States. Isetan--itself a major Japanese retailer--opened two in Japan with the Barneys name.
The Isetan Company accused Barneys of presenting fraudulent annual financial statements that had been certified by Barneys accountants since their joint venture began six years ago. Only at a meeting between the top executives of Barneys and Isetan on Nov. 28 and 29 did Barneys management reveal that it had "major financial problems."
Retailing is widely being characterized now by the phrase "over-stored"--which is a public-relations term for what Marxists know as overproduction. What's over-produced in this case are the retail outlets.
Low-priced retailers like Wal-Mart have been hardest hit. Although high-priced stores like Barneys and Tiffanys report their sales are up, Barneys is obviously in trouble, too.
Isetan itself has been subject to the problems of the business cycle and overproduction in Japan. For the fiscal year ending March 1995 Isetan reported sales of $6.1 billion and profits of $21 million. Since 1989, Isetan's investment in Barneys reached $592 million. Analysts estimated losses to Isetan from these investments could reach $236 million, more than 10 times its 1995 profits. (New York Times, Jan. 13)
The Barneys-Isetan conflict is another example of the growing antagonisms between U.S. and Japanese big business that could eventually involve the two governments. This antagonism grows sharper as the global capitalist economic contradictions are exacerbated.
Workers in the United States and Japan will have to be careful not to get drawn into the fight on behalf of their respective oppressors and exploiters. Their interest lies in building working-class solidarity.
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