I LOVE JAPAN. Kazuhiro Arai

Summing up, I have mentioned that neoliberalism is harmful because of the following reasons: (1) It considers only partial efficiency. It does not consider the efficiency of whole society. (2) In particular it does not discuss organization efficiency since the production functions are exogenously given, even though firms are its object of analysis. (3) Hence, it claims that the economy is efficient however lazy or untrustworthy the individuals are. (4) Similarly, it does not consider how family members can become happy. (5) Even the markets in the real economy are very likely to be inefficient because complete contracts are impossible due to astronomically high transaction costs. (6) It does not consider many factors that make the consumer happy such as her good human relations with others, her kindness to others, or the happiness of her descendants. (7) Therefore policies based on neoliberalism tend to generate inefficient firms (organizations), households, communities,...

There is also a pathological aspect in the very concept of market efficiency in neoclassical economics. Consider an economy where all people are lazy. They are poor since their productivity is low. However, this economy is efficient in the sense of neoclassical economics if those people act from self-interest. The same is true of an economy where all people are untrustworthy and cooperation is hard to be achieved. These pathologies arise because efficiency is considered under the assumption that the production functions are exogenously given. However low the productivity is, the economy is efficient in neoclassical economics so far as each individual acts from self-interest! As mentioned, market efficiency in neoclassical economics requires complete contracts, but they are impossible in almost all transactions in the real economy because of high transaction costs. For instance, complete contracts between employer and employee would entail astronomical costs and be virtually impossib...

Neoclassical economics has firms and households but does not consider their efficiency. Its object of analysis is market efficiency only. What a narrow worldview it is! Relying on neoliberalism, therefore, implies regarding the world as made up of only markets. Our society is made up not only of markets but also of households, firms (organizations), schools, hospitals, governments, communities, social & natural environments, and so forth. Neoclassical economics, however, has a systematic theory only about markets. It can teach in its own way how one should behave in markets but it cannot do so for households, firms (organizations), schools, hospitals, governments, communities, or environments since it has no theories about these. Therefore, neoclassical economics considers only partial efficiency, i.e. the efficiency of the markets only. We need to consider, however, total efficiency, i.e. the efficiency of whole society including households, firms (organizations), schools,...

               Neoliberalism is the most influential ideology in today’s world. It relies theoretically on neoclassical economics, which has the following proposition: If all individuals act from self-interest, the resource allocation of the economy will be efficient. This is called the first proposition of welfare economics. Here I would like to show that it has many theoretical defects. Most people in the world are obsessed with a harmful ideology.               Each firm in neoclassical economics is simply an exogenously given production function, which relates the amounts of inputs to the amount of output. If something is exogenously given in economics, it does not discuss how that has become the present form. Thus neoclassical economics does not analyze how production efficiency is achieved through innovations in organization structure, human relations, physical capital, and ...

              I would like to compare Japanese culture with Anglo-American culture and ask for your evaluation.               In the battle of Singapore in the Second World War the British commander Arthur Percival surrendered to the Japanese commander Tomoyuki Yamashita. Winston Churchill described it as the worst disaster in British military history. Percival must have experienced deep humiliation. After the war Yamashita was put to death by hanging (not by shooting) in a prison uniform. Percival was invited by Douglas MacArthur and attended the execution.               There is a similar story concerning the killing of Osama Bin Laden. Each member of the American SOF that made a surprise attack on his hiding place in Pakistan had a camera on his helmet to video the full details of his death. President Barack Obama, S...