The Roles of Nationalism in Neoliberalisation The Case of Neoliberalisation and Nationalism in Recent Japan
Thesis DisciplinePolitical Science
Degree GrantorUniversity of Canterbury
Degree NameMaster of Arts
As Karl Polanyi explained in his famous book, The Great Transformation, freeing economic life from social and political controls was tried and promoted firstly in England in the mid-nineteenth century by constructing the free market that operated independently of social needs. This new type of economy allowed prices of all goods, including money, land and labour, to be changeable without regard to their effects on society. The creation of the free market was achieved by demolishing previous markets, which were embedded in society with many kinds of regulations. Today, what transnational organisations, including the World Trade Organisation, the International Monetary Fund and the Organisation for Economic Cooperation and Development, are trying to achieve seems to have many similarities with the great transformation in the mid-nineteenth century. In the early 20th century the laissez-faire economy was challenged by a series of world incidents, including World War I, the Great Depression and World War II. In the post-war period, the Western world adopted the so-called Keynesian compromise, in which the foreign currency exchange rate was fixed to the US dollar, and the state intervened to keep a clear division of domestic and international economy and to maintain the welfare of society, while international trade, especially financial trade, was limited.1 The situation gradually changed from the mid 1970s when the fixed currency exchange was lifted, and the velocity of change accelerated during the 1980s. Known as neoliberalisation, various markets, including the financial market, had been liberalized, and post-war Keynesian welfare states were dismantled in a number of nation-states. In the 1990s, neoliberalisation became a global phenomenon with the emergence of international and regional institutions, including the World Trade Organisation (WTO), the World Bank, the North America Free Trade Area (NAFTA) and the European Union (EU), playing an important role in neoliberal economic reforms and structural adjustments in not only developed countries, but also in undeveloped and developing countries. Almost all nation-states in the world became part of the process of neoliberalisation, and therefore neoliberalisation is often used interchangeably with globalisation. Similar to the laissez-faire economy in the period of 19th century, current ongoing neoliberalisation transformed our society by causing a number of social issues and problems. The unprecedented volume of global financial trade created great uncertainty in a highly interdependent international economy, and made our domestic daily life more and more volatile through the connection to the international economy. Unequal development in the global north and south became increasingly 1 Robert Gilpin, The Political Economy of International Relations (New Jersey, 1987), pp. 131-2. 7 noticeable, and inside nation-states the social gap has been increasing. Moreover, the erosion of other social spheres by expanding the sphere of economy prompts ordinary people into the world of mass consumption and induces consumerism and atomism while excluding them from the important political and economic decision-making processes. The same period saw a revival of nationalism. Nationalism can be seen as a countermovement against current ongoing globalisation, like Islamic fundamentalism, but the revitalisation of nationalism also can be seen in the developed north during the process of neoliberalisation, like cultural nationalism in the US under Reagan administration. Encountering and seeing neoliberalisation and the revival of nationalism simultaneously, we face to a theoretical paradox that neoliberalism and nationalism appear to be in conflict with each other, in the sense that while neoliberalism’s ideology is methodologically and normatively individualist, nationalism is premised on collectivist interests and sentiments. Yet politically, and particular in recent Japanese politics, they seem to be compatible and even mutually reinforcing. To explore and elucidate this apparently contradictory relationship, this thesis presents an analysis of neoliberalisation and the roles of nationalism in neoliberalisation in the developing north, using the case of Japan.