Japan can't get a break. First there's Godzilla. Then Rodan. Mothra shows up. Gamera (Gomora?) puts in an appearance. Not enough? Throw in Garuda, Anguirus, Daimajin, Metron, Fire Rodan, Meganula (not to be confused with Meganulon, the evolved form of Meganula), Gorosaurus, Kamacuras, Gabara, Ebirah, Gigan, Jet-Jaguar, Minilla, Hedorah, Biollante, Moguera, Kumonga, Monster X, Monster X II, Gigantic Flying Rock (really), Fairy Mothra, Orgo, Titanosaurus, Kanegon, Oodako, Manda, Garamon, Dada, Golza, King Ghidorah, the Red King, King Caesar, King Joe (Tokyo seems to be a magnet for monstrous royalty), the rest of the Godzilla clan consisting of Mechagodzilla, Space Godzilla, LittleGodzilla, BabyGodzilla, and Godzilla Junior, and (believe it or not) Varan the Unbelievable.
And just when you thought they'd run out of creatures for their features, in floods a virtual tsunami of monsters evolved from traffic lights, water faucets, tomatoes, umbrellas, and stepladders. Then there's the combo packs: King Kong v. Godzilla, Three Giant Monsters Greatest Battle on Earth, All Monsters Attack, Great Monster War, Earth Destruction Directive: Godzilla Against Gigan, Godzilla: Final Wars . . . and so on. Appropriately, one of the films is titled, Godzilla — Tokyo: S.O.S. A small sample of what Japan has been going through can be seen in this brief newsreel footage.
As the late, great Anna Russell's famous catch phrase had it, "I'm not making this up, you know."
Godzilla is Not the Problem
We don't know if anybody takes these films seriously, except, perhaps the struggling actors who manage to get speaking parts (you try saying "Look! Godzilla!" and sound like you mean it while pointing at a man in a rubber suit). There is, however, a rather monstrous real menace that threatens the globe, and Japan (as appears to be usual) is right in its path. Like all good monster movies, the danger is ultimately our own fault. Also, there's a simple solution to the whole situation, if only we (meaning somebody else) is smart enough to see it.
We refer, of course, to the accelerating implosion of the world's leading economies, notably Japan and the United States. Ostensibly, this is due to Chinese aggressiveness and their ruthless exploitation of the West's own economic weapons. In true communist fashion, the Chinese have been buying the rope with which to hang the last capitalist, and making an enormous profit in selling the rope back to the capitalists.
That is not the real cause of what's going on, however. It is the West's own reliance on bad principles of economics and finance that have caused the problems. We necessarily include Japan, whose economic and financial institutions are based on the western model, in the "western" category. Besides, if Japan's economy goes the way of the dodo, that of the United States, then Europe, will not be far behind . . . followed, ironically, by that of China, but they don't seem to be looking that far ahead.
The ultimate root cause of the seemingly inevitable decline of the West appears to be a combination of three fixed, nearly dogmatic beliefs, as erroneous as they are widespread. These are, 1) New capital formation can only be financed by cutting consumption, accumulating money savings, and then investing. 2) Technology only enhances or supplements labor. Labor remains the primary, ultimately the sole factor of production. Consequently, the only legitimate way for people to gain income is by selling labor. All profits realized by the owners of capital are surplus value stolen from either workers or consumers. 3) The social order is fixed, beyond the control of humanity.
Destroying the Monsters of Despair
These doctrines of hopelessness — which astonishingly few people even question — are, as we have said, utterly false, and are, in fact, far more damaging than the fantasy beasts appearing in cheesy (or tofuy) monster flicks. Although we've covered all of them at some length in previous postings and on the massive amount of material available on the CESJ website and in various publications over the last five or six decades, let's briefly recap what's wrong with the assumptions.
One. New capital formation does not require existing accumulations of savings. It is, in fact, economically and financially harmful to use existing accumulations as the source of financing for new capital, as Dr. Harold G. Moulton demonstrated in his 1935 opus, The Formation of Capital. More than that, Moulton demonstrated that existing accumulations are not the source of the bulk of new capital formation in any event. Most financing for new capital formation has since the end of the 17th century come from the expansion of bank credit.
Two. Labor is not the only or even primary input to production. Technology is an independent factor, as is land in the classical division of inputs. Technology and land are grouped together in Binary Economics under the general heading of "non-human" (i.e., non-labor) factors of production, but this does not change the basic analysis, only the classification. Land (in which category we group everything not crafted by humanity) and technology can produce without any direct labor input at all. Land, of course, is the most obvious, as trees in the wild bear fruit, the forests and plains support game, and the seas are stocked with fish, all without human involvement. Gathering "Nature's bounty" is another issue, but the fact remains that production has taken place without humanity's direction or input. With robotics, technology can also produce marketable goods and services without any direct human input. To argue that God is directly producing the bounty of nature, or human labor is directly producing the output of an automated factory is simply to deny reality.
Three. To assert that the social order is beyond humanity's control is ludicrous. Each particular society, although mandated by humanity's political nature, is a human construct. This makes sense. God made humanity so that we need to eat, but He isn't going to do the cooking or washing up — analogous to institutions, He provides the means, and it's up to us to take advantage of them and tailor them to our particular needs. Being made by humanity, then, the social order can be remade by humanity. What baffles and confuses people is that, society being something specifically social, it is not susceptible to restructuring through individual effort — "It happens all too frequently . . . that individual employers are helpless to ensure justice." (Divini Redemptoris, § 53.) The proper response when the institutions that make up the social order are badly flawed — including our money and credit systems — is to organize and restructure those institutions to conform to nature and once again assist humanity in the process of becoming more fully human.
Saving the Day
Are we, then, to look to a savior, divine, technological, or human, to save us? Where is Light Yagami (although handing over power to that pretend god would be like giving the fox the key to the henhouse), Astro Boy, or even Speed Racer when you need them? (And, if you need the appropriate theme songs, here, here, and here, respectively.) Okay, I realize that Marvel Comics' The Mighty Thor would have been a better and more plausible choice for fictional divine savior — the prototype was, after all, the only real competition "the White Christ" had in Northern Europe for a thousand years, . . . but Thor 1) is not an anime or manga character, and 2) doesn't have a neat theme song. Anyway, what are we to do?
Have no fear. The Lord (and Astro Boy and Speed Racer) helps those who help themselves. Implementing a program of widespread capital ownership in conjunction with some relatively simple tax and monetary reforms would have an almost immediate impact. This "Just Third Way" program, embodied in the Capital Homesteading proposal, would pump an immediate $2 trillion worth of effective demand into the economy over the course of a year without permanent inflation, and without increasing the government deficit. (There would likely be a temporary inflationary effect as current accumulations of savings are spent on consumption, rapidly offset by increased production as the new capital is put to work.)
How? Instead of redistributing effective demand by backing new money with government debt, thereby creating more claims on existing marketable goods and services, the new money would be backed by the present value of future marketable goods and services, as well as the capital assets financed by the new money. The amount of money would increase, yes. So would the present value of future marketable goods and services by the same or greater degree. Consistent with the Quantity Theory of Money, the price level would remain stable. Prices should even decline somewhat after a possible initial but temporary inflation as the economy adjusted to the new source of financing and put existing savings to their proper use.
The bottom line? We must destroy all monsters, especially the monsters of past savings, the labor theory of value, and the idea that humanity is helpless before the institutions we ourselves created.