The alternative required for replacing the current dysfunctional world socioeconomics

The current entire world is a full of mess. This should be no longer called the functional order.  This is the disorder perpetuating various social diseases and social exclusion of majority individuals.  In terms of economic, political, and sociological perspectives, this world socioeconomic situation is undoubtedly dysfunctional enough to need an alternative replacing the current socioeconomic structure. Please kindly read the linked articles:

Economic issues:

Domination by Corporatism,The New Totalitarian

http://art-blue-liberalism.blogspot.com/2017/04/domination-by-corporatismthe-new.html

Monopoly of Corporatism Expands in Present Day Capitalism: Average Cost shifts Rightward

http://art-blue-liberalism.blogspot.com/2018/03/monopoly-of-corporatism-expands-in.html 

Let's be sceptical about Corporate Capitalism!

http://art-blue-liberalism.blogspot.com/2022/06/lets-revolt-against-corporate-capitalism.html

The current market economy is monopolised by the elite corporate tycoons. Even though the status-quo claims for the equality of opportunity to compete under meritocratic ethics, the income distribution mechanism has already become too asymmetric to merely rely on the labour market competition. Therefore, some degree of the equality of outcome for all the individual is required to accomplish the equality of opportunity more than ever.

Political issues:

Democracy of the modern world under challenge

http://art-blue-liberalism.blogspot.com/2022/07/democracy-of-modern-world-under.html

The Good Communism: Anarch-Syndicalism

http://art-blue-liberalism.blogspot.com/2022/07/the-good-communism-anarch-syndicalism.html

The Japanese Anarchist Communism

http://art-blue-liberalism.blogspot.com/2022/07/the-japanese-anarchist-communism.html

Crypto currencies based on the Block-chain technology e.g., BItcoin and the P2P networking are like Stirnerism in economy and finance!
http://art-blue-liberalism.blogspot.com/2022/06/crypto-currencies-based-on-block-chain.html

 

The decision making process is centralised more than ever. The nation state government no longer deserve their individual citizens. Not only the authoritarian political structure but also the counterpart called the Liberal-Democracy put priority on the interests of the few number of the politically powerful peers not allowing to reflect the opinion of the majority individuals.  By referring to the P2P (Peer To Peer) system, it might be far more effective to install the spontaneous order based on the multiple interactions of individuals without any centralised structure. The spirit of the participation will encourage these autonomous individuals to voluntarily improve their living standard by taking advantage of the remarkably developed information technology. 

Social issues:

Suicide and Community

http://art-blue-liberalism.blogspot.com/2021/11/suicide-and-community.html

Tolerating Uselessness

http://art-blue-liberalism.blogspot.com/2022/05/tolerating-uselessness.html

Manifesto Spiritual Libertarian - the Libertarian for the coming age of Ying 陰

http://art-blue-liberalism.blogspot.com/2022/06/manifesto-spiritual-libertarian.html

The polarisation between the ruling class and the useless class rises in the society of the entire world. Those who are not "conforming" of producing the enough productivity fulfilling the interests of the ruling class are often socially excluded. As the factors of production demand individuals with conforming skills and talents more and more, more individuals tend to be labelled as "useless". so that their meaning of living is taken away and eventually falling into the state of the Anomie (normlessness). It is the time to rebel against the fixed norms and values imposed by the ruling class to emancipate individuals and their spirit to imagine and eventually form the new alternative liberating the autonomous individuals!

The Possiblility of the Deposit Blockage in Japan

Do you remember that I said "Japan will face the hyper inflation in the future"? Well, this statement is becoming more real than ever nowadays. The actually high inflation which the government and the Bank of Japan (BoJ) seem to manipulate to make the announced inflation rate lower than. 

The high price inflation together with the substantially low central bank interest rate, the Japanese Yen (JPY) value has steadily been plunging since the first quarter of this year 2022 in the Foreign Exchange (FX) market.  This will eventually depreciates the value of the Japanese sovereign bonds (government debts) in the international financial market. 

The major holders of Japanese sovereign bonds are the BoJ and the major private banks in Japan. When the bond value goes down, the portfolio of these Japanese private banks will be depreciated. Combining the poor business performance of Japanese banks with the JPY value plunge, the havoc of their depositors attempting to withdraw their JPY amount from their saving account. 

Following this logics, it is quite plausible that the deposit blockage will be likely to take place. This is why some economists have already forecasted the considerable Japanese economic downfall as well as the reasonably high possibility of these banks blocking these saving account from their money withdrawal.  

Perhaps, they might not block their customers' account but may face bankruptcy, the recapitalisation by government, or furthermore annexations to a bigger private bank. This infers the risk of relying on saving income in the JPY saving account and holding the assets with their value based on JPY in the near future. The real value of JPY is steadily falling so it is wise to start splitting the risk from now on. 

The Cloud Types, the VPC, the public and private subnet, and the DMZ

 

In terms of the on-premises computing environment, the ownership of the physical computer device belongs to the user. However, an antinomy of the on-premises computer is not necessarily the could computing. There are two spectrums: The one determines where the device ownership belongs to, and the other determines where this device actually located in.

The ownership of the rental server belongs to the provider even though it is leased to be located inside the user's property. The clouds are distinguished between the private cloud and the public cloud depending on their ownership: The former belongs to the user whereas the latter belongs to the provider meanwhile both are located on the place distant from where the user is physically at.

The private cloud is established by an individual firm under its own responsibility of its maintenance and security update as well as its own exclusive right of using and modifying it. It also secures its privacy unless it is infiltrated by some wrongdoers with their hacking and virus attack. The disadvantage of owning the private cloud is its cost inefficiency of their maintenance and various updates including the cyber security.

For a relatively small-scale private ownership, the operation inside the on-premises can be achieved with the smaller budget than establishing its own private cloud. The cloud facility requires a bigger scale maintenance and update so that the private cloud may be more suitable for a huge organisation to handle. Nevertheless, even for a huge organisation, it will be more cost efficient to outsource the cloud service to the cloud provide specialising in the cloud computing provision.

On the other hand, even for a small-scale usage, the public cloud is useful because the user does not need to be responsible for the whole physical machinery maintenance unlike the private cloud. The user can simply subscribe the service instead of purchasing the entire package of software and device. Furthermore, instead of incurring the capital investment expenditure, the user can include the usage cost as the variable operation cost so that it is efficient by means of their administration accounting and tax payment. 

To take an advantage of the cloud computing, the public cloud is more likely to be cost efficient than the others due to its scale merit and its capacity. The major public cloud providers in the world are Amazon Web Service (AWS) (33% market share in 1Q2022), Microsoft (MS) Azure (22%), and Google Cloud Platform (GCP) (10%). These providers specialise in the cloud computing provision including specialised customer-support, maintenance, security update, product improvement, and the new product instalment. 

To use the public cloud service, the user selects which region to use. Then, this user is offered to use one or the multiple Availability Zone (AZ). Inside one AZ, the user determines the number of subnets to use where each subnet size is determined by a block of the IP address size determined by the CIDR (Classless Inter-Domain Routing) notation.

While using the public cloud, there is a service securing the privacy and the security of the server instances and the other services as though the user were using them inside her/his own private cloud network in an AZ. This is called the Virtual Private Cloud (VPC). Each subnet can be allocated inside the VPC while these subnets are usually categorised into the two types: the private subnet and the public subnet.

Instead of risking all the subnets facing both the infiltration risk and the overflowing access, it should allocate some subnets specialising in filtering these accesses as well as analysing their characteristics and traffic volume. Therefore, there needs a buffer demilitarised zone (DMZ) between the inbound accesses from outside the VPC and the private subnets inside the VPC so that the public subnet is allocated there between the gateway of the VPC and the private subnets. The public subnet and the Firewalls such as the Network Access Control List of AWS stand there to form the DMZ as the front-line defending the architecture behind. 

Placing only one network Firewall eases the infiltration of the intruders as well as the sudden access traffic overflow undermining the entire architecture configured inside the public cloud. The first line Firewall is set in front of the public subnet. The second line Firewall is set between this public subnet and each private subnet. The DMZ is the zone between two Firewalls where the public subnet bisecting these two Firewalls.

In AWS for example, there are the Load Balancers (LBs) with different task for each different duty. These LBs are in chage of equalising the divided traffic volume to each of the server instance to prevent them from receiving the excess volume undermining their performance. The Application Load Balancer (ALB) is often placed in the public subset distributing the access traffics to lead them to each destination connected to the private subnet areas. The Network Load Balancer (NLB) is often placed in the private subnet distributing the access traffics to lead them to each server instance depending on the traffic volume of these accesses to each instance. 

Because these LBs do their multitasking of not only balancing the traffic volume to each instance but also the health check of each instance to detect whether or not is capable to receive the access.  Therefore, the division of labour among these LBs becomes necessary to protect the entire architecture inside this network from the asymmetric or malfunctioning access traffic to this network.

In conclusion, it seems to be the trend of shifting the ownership of the computing system. Big organisations such as not only major private corporations but also government institutes have also started being more reliant on the public cloud. Small enterprises also take an advantage of this trend: By switching their main computing environment to the public cloud, they no longer need to deal with preparing for the spare, the physical devices, the cost payment for them, and the uncertainty of the future cost and benefit estimates. This is because the outsourcing of the autoscaling capacity as well as the physical and security maintenance to the specialist provider solve these issue. Hence, it is predicted that the public cloud provision will be popular more and more as the time passes.

Networking, Protocols, and Domain Name Service (DNS)

 

The letter "HTTP" found on the URL (Uniform Resource Locator) while surfing the internet is the abbreviation of the Hyper Text Transfer Protocol. There is a term "IP address" required for the internet access, and the IP is short for the Internet Protocol. These are the protocol of transferring data via the network connection: the IP is for the internet layer and the HTTP is for the application layer. There are also the other various networking protocols. The layer structure description here mainly follows the OSI Reference Model.

 

The protocols for the application layer are not only the HTTP but also the FTP for the data transfer to the file server, the POP3 for E-mail, and SSL/TLS for the data transfer with encryption for example. The AWS network architecture provides the ostensible sample. The Application Load Balancer (ALB) deals with the internet-facing side of the traffic with the HTTP to the public subnet directly connected to the internet to distribute the traffic access volume to those inside the public subnet. The Network Load Balancer (NLB) deals with the internal side of the traffic with the SSL/TLS to distribute the traffic access volume coming from those in the public subnet to those inside the private subnet. 

 

The SSL/TLS is the protocol also used for the transport layer connecting between the application layer (via the session layer and the presentation layer) and the network layer. The network layer represents the inside network of the on-premises environment connecting the physical layer via the data link layer. The network layer requires its protocol for its data transfer among these physical devices by linking their data together. The network layer is the gateway to outside the on-premises via either the internet connection or the Direct Connect via the transport layer, and this requires the protocol too.

 

 

As shown in the the URL, the HTTP is followed by the domain such as "art-blue-liberalism.blogspot.com".  This is addressing the website with the name which humans are accustomed with while computers are not. Computers understand and process various tasks by means of numbers so they address the website by the number such as the IP address. 

 

Therefore, the networking needs the domain name service (DNS) resolving a name to numbers.  The DNS resolves the domain name such as "art-blue-liberalism.blogspot.com" to the IP address such as 192.0.2.1 in IPv4, and 2001:db8:0:1234:0:567:8:1 in IPv6 (Ref. Wikipedia).

 

There is the DNS allocated in order to transform to manage the domains and the IP addresses among these access connections.  It is similar to the phone book while looking for a telephone number by searching the name of a person or an organisation in the index.

 

The DNS server checks its own cache memory to find an IP address for the domain name when it receives the query. If not found there, then, this query is sent to the root servers, the root of the DNS hierarchy, which are operated by a number of the organization and evenly allocated in the world. But, instead of directly providing the DNS server with the IP address, the root server requests the Top Domain Server (TDS) to instruct the DNS server to find how and where to look for the IP address matching with the queried domain name.

 

Is Monetarism/Neoliberalism bad? Not at all!

Neoliberalism and its mainstream macroeconomic theory Monetarism are not bad theories like these old-fashioned Socialist and the other Left-wingers condemn at all! These theories teach very important socioeconomic lessons for all the individuals to live as long as the monetary economy where individuals use fiat-money for their intermediary of exchange in their daily life thrives to exist. 

Those who are against Neoliberalism tend to blame these theories as the severe survivalist Capitalist political theories leading the majority individuals to deprivation. However, it is the same nonsense as blaming Marxism and the other socialist theories for the disastrous mistakes of the United Soviet Socialist Republic (USSR). Both Marxism and Neoliberalism contain the non-negligible elements to study the political affairs and the human history. 

- The monetary policy channel instead of the fiscal policy

Focusing on Monetarism as he major base macroeconomic policy of Neoliberalism, the key element of this theory is analysing the nature of the fiat-money flowing into economy as the intermediary of exchange. In the long run, the money value is neutral to the other substances distributed in the world. By contrast, it regards that the change in the money supply volume affects the economic activities and productivity level in the short-medium run. 

Monetarism regards highly of the value of the fiat-money supplied by the central bank which should be supported by its credibility and its market demand. Therefore, it is sensitive to adjust the money supply level to the aggregate production level of this economy in order to avoid the value depreciation. 

It encourages the private sector based economy functioned by the spontaneous order of individual economic agents voluntarily deciding the aggregate production volume according to their needs and wants on spot. It discourages the excess reliance on the fiscal policy cutting tax and increasing the government expenditure while incurring national debts leaving their responsibility of repayment with the inevitably increasing future taxation and cutting the future government expenditure in the long run. Instead, it tackles with the temporary economic downturn by temporary pumping the extra money supply filling the temporary emerging negative output gap. 

- High-Powered Money as the antidote against the deflationary recession

In order to enable the fiat-money to stimulate economy, the velocity power of this money supply which is its value and credibility in both domestic and international market, is required. When individual economic agents appreciate its value and credibility, they find its extra supply as valuable and trustable to use as their intermediary of exchange in both domestic and international market. They may either spend for their exchange or save in their banks using the extra money from their saving account as the extra investment resource for increasing their profit. This is called High-Powered Money theory. 

According to Monetarism, the deflation inducing the recession, the negative output gap, is caused by an error of scaling the optimum market aggregate production level or a false information delivered to economic agents. Thus, the deflationary recession is caused by the stuck money circulation which means the money supply level is not balanced with the aggregate productivity level. In this scenario, the money supply as the High-Powered Money can be increased to directly inject it to economy to equalise it to match with the aggregate productivity level. 

- Killing inflation is more important!

On the other hand, Monetarism regards of Stagflation (the output stagnation + the price inflation) as the excess money supply unmatching with the aggregate productivity level.  Then, the decreasing output caused by Stagflation is considered as the long-term phenomenon which should be solved by cutting the cots including wages of the production even if it means to discourage their business activity level at least for a short run.

The reason to sacrifice the output to suppress the inflation is to maintain the money value as useful to be implemented as the High-Powered Money. Even to protect the employment by maintaining the wage distribution, the real value of their wage/income is consequently reduced when the price inflation, the money value depreciation, is perpetuated. Monetarism is actually a humanitarian political theory against depreciating their income/wage level to avoid consequently treating these employees as the quasi-slave labour. 

Monetarism antagonises the perpetuated inflation even for diverting the negative output gap is bad for economy overall. Even though the extra money supply is injected into the real good and service market to push the output level up, the value depreciation negatively affects the capital market. 

Most of the capital asset value is based on the base money so that the money value depreciation implies the capital asset value depreciation in the international financial market. Almost all the firms producing goods and services are invested by banks and shareholders through the capital market.

In addition, firms in the good and service market also face the import cost up under Stagflation as the excess money supply perpetuating Stagflation. Because all the regions of this world are interdependent on each other so that the relative value decline of the fiat-money used in one regional economy causes the purchasing power depreciation of this regional economy. 

- Monetarist, Consequentialist Ethical Philosophy

Overall, Monetarism supports the gradual and natural economic recovery encouraged by private individuals and firms under the stable market economy propped up by the balanced money supply adjusted to the aggregate productivity level. This ethical policy is what Neoliberalism shares with and aspires to achieve so that Monetarism is the core macroeconomic policy of Neoliberalism.

Monetarism and Neoliberalism are often regarded with a bitter cold attitude towards those suffering from economic downturns by these antagonists. However, it is really a prejudice to accuse them as such because these theories take account of the majority individual citizens such as their about preventing their real income depreciation caused by the monetary value depreciation.

Monetarism and Neoliberalism may be categorised into the Consequentialist ethical philosophy which attempts to maximise the overall net benefits by maximising the sum of the gross benefits while minimising the sum of the various cots as a total at the end. Monetarism criticises the big government policy directly caring their citizens by incurring a massive debt and the non-stoppable inflation depreciating their income and the market value of financial assets in the international market. Monetarism counts on the rationality of each individual's free will and the spontaneous order based on these free wills to recover their economy with the minimum assistance by the small government. 

It does not mean that both Monetarism and Neoliberalism neglect the public support with government assistances. They simply suggest the minimum required assistances. Furthermore, the High-Powered Money of Monetarism maintains the real value of the assistances provided by government and the procurement power of this government gathering the resources for their provision. This is why the European countries implementing Social Democratic socioeconomic policies adopt Monetarism for their core macroeconomic policy.

- Monetarism in Europe

The weight on each different macroeconomic theory which Neoliberalists adopt to follow depends on each Neoliberalist. Some of them mildly adopt Keynesian theory meanwhile the devote Neoliberalists base their thoughts and plans purely on Monetarism. As a matter of fact, the European Central Bank (ECB) and the central banks of Scandinavian countries, whose countries are famous for their Social Democratic socioeconomic policy, follow the monetarist macroeconomic policies especially for their tight prudent money supply policy. This proves that Monetarism is worth referring to not only the economic Right-wing but also the relatively more centralist counterparts. 

Social Democracy is actually the friendly version of Liberal Democracy (Capitalism) (※) and not technically Socialism. Therefore, it makes sense that these Social Democratic European countries are happy to install Monetarism as the principle macroeconomic theory of handling their market economy. Their socially minded intervention is not stimulated by the proactive positive macroeconomic intervention by a central government expenditure or the extravagant money supply from a liberal central bank which Keynesian economic theory often uses. 

    ※ Liberal Democracy and Liberalism by means of this comparison are treated as the synonym of Capitalism, the market economy, because Neoliberalism is mentioned to explain in this essay. Liberal Democracy is therefore the synonym of Neoliberalism here. Then, Social Democracy is the derivation of Neoliberalism rather than Socialism. 

The level of tax and expenditure rarely changes flexibly unlike those adopting Keynesian theory as their core principle macroeconomic policy. Their costs for the socially minded public intervention of these European countries are covered by the tax revenue from the progressive taxation levied on individuals and firms their steadily growing market economy. These European countries especially since 1997 (The European Monetary Union conducted by the ECB was introduced then) have been actually reluctant to artificially stimulate their economy.

It is because their macroeconomic tradition, especially of Germanic and Nordic, puts high priority on prudence over expansion. Their Social Democracy sustains the diverse income distribution allowing the slow but steady human capital development. Therefore, Monetarism matches with their prudent attitude towards economy to slowly but steadily raising their economy backed up by the human capital development requiring the steady continuous public investment in the long run.

- Conclusion: Monetarism and Neoliberalism are good!

In conclusion, having re-evaluated Monetarism and its ethics basing Neoliberalism, it is actually an ethically good functional socioeconomic political philosophy. Their characteristic is simply different and unique from the other political economic theories.  Their quality depends on how, where, and when it is implemented in real.

    To my admiring economists, Irving Fisher and Milton Friedman

Japan The End (Friendly investment advice)

 Many immigrant workers are now leaving Japan because of the current income decline on the top of the excessively hard-working environment. As a matter of fact, Thai wage is so higher than Japanese counterpart that it is not beneficial for these South-Eastern Asians to pay various high costs for their relocation to Japan. This phenomenon represents the end of Japan as an economic power house.

As having mentioned by means of the astrological analysis, Japan will be transformed to be something like the one in the Edo period during the coming two decades. This means that Japan will be furthermore socio-economically and culturally isolated from the rest of the world. The currently ongoing phenomenon caused by the economic power decline can be see as the prelude of the end of Japan!

As having mentioned several times, the Japanese government are reluctant to implement any countermeasure against Japan's socio-economic collapse at all. Well, this is also the responsibility of Japanese nationals electing the same incompetent government perpetuating the multiple decade long recession. These Japanese national citizens are also reluctant to rationally evaluate their own political actions.

It is obvious that Japan will shift to the further decline of its economic and cultural initiative in the world. Because of the declining fertility rate and the reluctance of both the government and the general public for investment to education, the human capital development will be considerably slowed down.This will lead to the further productivity plunging. 

 Moreover, the current Japanese situation also deteriorates its best advantage of seducing consumption and investment which is the service industry. Japan used to be a popular foreign tourist destination because of its once high service quality of its hospitality businesses. By contrast, the declining motivation of Japanese citizens for their daily life as well as business has started to be discouraged.

Only the tradition left in Japan is its highly bureaucratic culture. These Japanese citizens are still loyal to their bureaucratic order even with its notorious inflexibility. The quality of their consistency in office works, factory lines, and corruption prevention in both private and public sector administration will remain as its little left virtue. However, it guarantees that Japan will become a more boring and inflexible place to live for majority autonomic individuals due to the very tight margin of deviation from its rigid social norms and values.

The level of creativity is dropping down in Japan. As seen in the current trend of the subcultural products such as its animation and gaming industries, the brand-new products attracting audiences with a fresh impression is slumping. Instead, most of the well sold products are those of the remakes of the old series whose original ones were created last century. 

Then, it is ostensible to recognise that Japan is not a feasible place to invest your precious financial resources even it has recently become cheaper to buy the assets there due to the current Japanese Yen (JPY) depreciation. The aggregate productivity of Japan will plunge furthermore especially due to the human capital decline. 

The best option to purchase the Japanese assets will be investing to only those which are merged or annexed to the multinational firm. The foreign executives are much more competent to replace the irrational endogenous policies and mentalities of Japanese firms. In addition, majority Japanese are subservient to their authorities regardless of their ethnic origin so that they follow the reformed management policies implemented by these multinational shareholders. Combining the rational management by foreign executives and shareholders and the loyal labour-force is an attractive characteristic for investors.

Only the legitimate and productive purpose of living in Japan for foreigners is having a Japanese significant other i.e., a spouse, a loving partner, a concubine, etc. Japanese tend to have their day-dreaming nostalgic image in foreign worlds and often seek the foreign DNA of these individuals coming from abroad. Therefore, even under the socioeconomic deprivation, living in Japan for these foreigners with a Japanese significant other might enjoy their stay in Japan because their significant other and her/his family and relatives will protect you somehow even in a socioeconomic hardship. 

Overall, it is already Japan the end, and its beginning has already taken place. There will be no such once a major economic superpower nation state called Japan: The remaining there is the empty shell of its unproductive inflexible bureaucratic structure and the hopeless mobs simply as the remnants of this ethnicity barely nesting this archipelago. Because of the coming decades of the macroeconomic winter, the aggregate investment volume in the world is likely to fall so that there will not be enough investment flowing into Japan. Nobody will not notice Japan's existence, the remote edge of the world which only the few will show their interest in the existence of, any more.

Excel File: Ricardian Equivalence Simulator

 

Click https://uranaisearchastrology.files.wordpress.com/2022/07/recardianequivalencetest-1.xlsx to download.

You may simulate how individual economic agents react to keep/change their consumption-saving proportion by means of both the income effect (consumption + saving/borrowing) and the utility function showing their propensity to consume.

The income effect is calculated with the income of each time period (Yt), the interest rate for borrowing and saving (r), the additional interest payment rate of incurring debt (+d), and the wage growth rate (g).

The utility effect is calculated with the quadratic equation opening downward whose maximum is set differently for each different propensity to consume. 

Click https://uranaisearchastrology.files.wordpress.com/2022/07/recardianequivalencetest-1.xlsx to download.

The interesting factor is that the number of the economic agents drastically change their preference of incurring debt to increase consumption over saving only when the inflation rate is significantly higher than the interest rate in terms of this simulator.

By contrast, under the severe recession/depression where the inflation rate and the wage growth rate are negative, the economic agents rather change their attitude to save more than spending and those with the substantially high propensity to consume simply disappear.  The current saved income as well as the future value of the debt borrowed at the past become higher so that they rather change their attitude to save more. 

The propensity to consume is fixed regardless of any situation unless either the high inflation or the severe depression strikes. Therefore, as long as the economic agents behave rationally to their income effect, the Ricardian Equivalence holds.

 

The Unlimited Capital Growth Model

 Is there any enough for the capital investment? Many tend to assume there is a cap on the economic development when the capital quantity exceeds a certain proportion to the labour quantity because it simply becomes too much for the scale of this economy. The problem is that this assumption is often used as an excuse for government and banks for neglecting their responsibility of slowing the economy. It is important to evaluate whether there is a certain limit of economic development or there is an unlimited potential for economic development.

As a matter of fact, the developing countries have succeeded in emerging with a remarkably high production growth significantly faster than the developed countries. It is ostensible that these developing countries lack the physical capital required for improving their living standard which is visible to decide where the future capital investment is necessary. Therefore, there is always a motivation for citizens and foreign asset management firms to expect a high growth potential to invest there. 

By contrast, the developed countries look already sufficient with the physical capital. The recession is often understood as the sign of excess supply of the production compared to its demand and the maximum capacity of the economic development. Therefore, it is often judged as a good opportunity to cut down the unnecessary capital invested to economy even through individual citizens suffer from the depression caused by their income growth stagnation and job loss. 

There are three macroeconomic theories of the productivity growth model, the Neoclassical economic exogenous growth model based on the fixed production of physical capital and labour, the endogenous growth model based on the human capital development, and the growth model of the New Economic Geography (NEG) economics. There is an innovative model combining the exogenous growth model and the endogenous growth model together as shown in the graph. The NEG economic growth model involves the demand side effect on the top of the supply-side effect explained in this article so that it is complex enough to need another separate article to explain. (Please kindly read already posted articles in this blog)

The productivity growth based on the labour and the physical capital is dependent on the exogenous factor such as the technological growth and the outside investments. The government do not need a complex analysis of finding their need of expenditure for the public work projects because their lack of physical stuff is visible. The private banks tend to be willing to voluntarily invest there because their investment return for the filling physical capital shortage. The productivity growth speed is faster at the low capital ratio to the human labour counterpart while it gradually diminishes as it is reaching towards the certain optimum proportion of the physical capital investment required for the human habitant population.

By contrast, the human individuals are not the mere labouring workforce working with the fixed manual for operating the physical capital such as machineries, auto-mobiles, and offices. These human labour workforces are actually the human capital contributing to the furthermore productivity growth on the top of the physical capital. Economy is composed of not only physical goods produced by the hardware i.e. the physical capital but also the complex value-added goods and various services provided by humans such as catering, computer engineering, consulting, and sales. Knowledge and experience are strongly tied up with their productivity levels and contingent to the other human workers to copy. Moreover, the combination of existing products to invest a new product is infinite. 

In particular nowadays, the ability level of taking an advantage of the information technology (IT) is a notably significant factor for improving the productivity level. For example, the IT service products such as the software and the cloud services are made of the computer programming codes. Their production efficiency cannot be measured by the classical economic model because it is highly dependent on a human individual's skill and experience. Furthermore, the manufacturing businesses are shifting towards the internet of things (IoT) so that the IT becomes the key of optimising the production processes with the programmed automation and the production flow optimisation. Therefore, knowledge and experience of each human individual has become the critical factor of the production growth.

With comparison to the emerging phase of the economic growth backed up by the physical capital growth, the productivity growth based on the human capital growth is slow. On the other hand, the counterpart with a certain limit to the productivity growth. The key factor of accelerating the human capital growth model is the education level because human individuals need a certain level of intelligence and adaptability to obtain new knowledge and experience. 

The return from investing to education takes long to capture while there is little or no short-term financial gain. This is why private banks are reluctant to invest there. This is why it requires the public sector investment to stimulate the educational development. Furthermore, adult individuals had better have the access to the safety net while leaving a job for joining the future education or a job training for a certain period. Otherwise, the currently ongoing socioeconomic problem will be considerably challenging. 

Employers should not underestimate the contribution potential of employees. Many employers still tend to treat their employees as expendable and replaceable as the simple labour force by ignoring their potential to become the human capital. Their knowledge and skills gained through their job experience are precious enough to be a long-term asset of this firm. Their human resource management should consider their payment for their employees as not only the wage cost but also the investment to the human capital.

In conclusion, considering the unlimited productivity growth potential, there needs to be a continuous stimulus to an economy to solve the socioeconomic problem. The income stagnation as well as the employment issues including both unemployment and misemployment because of the perpetuated economic growth stagnation in many developed countries. Hence, individual citizens should not be fooled by the excuse of their negligence perpetuating the socioeconomic problems.

The Japanese Anarchist Communism

The current world socioeconomic situation is still gloomy. In particular, the socioeconomic situation of Japan is indeed depressing. On the top of the multiple decades of the income growth stagnation, the current stagflation (output stagnation + price inflation) perpetuated by the Japanese Yen (JPY) depreciation in the foreign currency exchange deteriorates individual citizens' daily life. The growing mental illness issues as well as the rising suicide rate are worrying as the sign of the moral and social crisis. Is it the problem of Japan itself? Or is it different from how Japan originally was? In the past, there was a political theory introduced as the antithesis of adopting the modern Western industrialisation and materialist ethics to Japan. So, let's evaluate.

In Japan, there were some politicians who were advocated to Anarchist Communist before the World War 2 (WW2). Even though this policy was not put into practice in real, this political movement was influential to the various contemporary rebellious political factions against the contemporary Western capitalist imperialism. This influence is non-negligible for explaining the spiritualism of the contemporary status quo Touseiha administration during the WW2 despite their different political characteristics.

A former Japanese government bureaucrat 柳田国男 (Kunio Yanagida) was inspired by an Anarchist Communist philosopher Kropotkin whereas he was a strong Japanese nationalist at the same time. Yanagida had a unique attitude towards the issue of the Japanese monarchy Tenno system. He attempted to restore the pre-modern traditional Tenno system linked to the original Shinto shamanism while criticising the current modern monarchism strongly tied up with the modern nation state and its modern state capitalism. His own plan was to establish an Anarchist Communist state of Japan based on the decentralised pastoralist environment where all the autonomous individual habitants mutually cohabit together with their own free will.

Yanagida was sceptical about adopting the modernisation to Japan because its nation state and capitalism seemed to have deteriorated Japan and her citizens despite its promise for improving their lifestyle with the materialistic development. The modern nation state capitalism not only prioritise those elites living in the top structure but also discourages the voluntary contributions of individuals and their community aiding individuals together. The free trade which the modern capitalism insists on interrupts an autocratic individual living in their own unique lifestyle by imposing the instant materialist seduction. This seduction to the instant materialistic pleasure has undermined the peaceful pastoralist environment providing individual habitants with the humble but well-secured lifestyle.

The theory of Gaia explains that the centre pole of the world energy flow has already been shifting from London, the U.K. to Awaji Island, Japan (Known as the sacred birthplace of Japanese civilisation blessed by the divine pair of Izanami, the Goddess of creation, and Izanagi, the God of creation, in Shinto mythology). This implies that the political and spiritual domination is shifting from Anglo-Saxon regime to Japanese counterpart. Majority spiritualists describe that this is the drastic shift from the materialistic masculine 陽 (Yang) element to the spiritualist feminine 陰 (Ying) element. This may induce the decay of the modern industrialist characteristic of the modern Japan as well as the reincarnation of the mystic shamanistic matriarchy of the ancient Shinto-ist Japan.

By means of understanding this theory of Gaia, it can be worth off to re-evaluate the Anarchist Communism explained by Yanagida. The material prosperity will be lost furthermore due to Japan's further insolation from the global economic network caused by Japan's loss of its economic initiative. On the other hand, Japan will start focusing more on the non-material beings such as the local community network and the spiritual well beings. The interesting factor nowadays is that the number of Japanese citizens practising some spiritual rituals as their daily habit such as chanting mantra and playing Yoga is increasing. This phenomenon seems to gradually initiate the spiritualist pastoralism introduced by Yanagida.

The totalitarian state communism based on the nation state statism backed up by the orthodox Marxism is an obsolete rebellion countering the modern industrialism and the capitalist ideology. The orthodox Marxism contains an intensive Yang element which is the cohesive paternalistic autocracy inducing a high risk of provoking a war and other excess conflicts. Therefore, this intensive Yang characteristic will not be accepted by the world shifting to more Ying characteristics.

The idea of Communism should not be monopolised by the orthodox Marxists; There is a variety of Communism which actually challenges against the orthodox Marxian style and is compatible with Liberalism. There have been various new political philosophical movements of challenging the combination of capitalism and modern nation state government. Michel Foucault was a remarkable philosopher accusing the oppressive characteristics of the entire modernity. 

Foucault's philosophy is often criticised as an anachronistic because he seemed to romanticise the pre-modern feudalist society to a certain extend. Yet, his theory clarifies how the emerging modernity with its nation state and capitalism has deteriorated individuality of autonomous individuals by forcing the conformity to the ruling class interests and the entire monstrous mechanism of the modern nation state. His idea was to respect each unique characteristic of individuals not undermined by an institutionalised socioeconomic structure, and his policy is often introduced as the postmodern Anarch-Syndicalism. 

Perhaps, this postmodern Anarchist Communism introduced by Michel Foucault might emerge in the future Japan when the aforementioned energy power pole-shift from the Anglo-Saxon Yang to the Japanese Ying is completed. It will be the ideology combination of Foucault and Yanagida to establish a postmodern mutualist socio-economy if it is realised. This will be a synthesis of the pastoral communitarian cooperative virtue and the postmodern individualistic enlightenment challenging against the paternalistic authoritarianism of the modern nation state and capitalism. 

All in all, if Communism rises to counter Capitalism, this might be predicted to be in Japan by referring to both the political science and the theory of Gaia. Perhaps, the current suffering of Japan might be the birth-pang for transforming the current modern nation state capitalist Japan into the new alternative such as this pastoral mutual cooperative state of Anarchist Communist kind.

The Good Communism: Anarch-Syndicalism

The word Communism tends to be often prejudicially quoted as a synonym of authoritarianism/totalitarianism based on a nation state government administration. The authoritarian characteristics of the orthodox Marxian doctrine often represents the socialism aspiring to evolve to communism eventually. Then, the word communism is often seen as the enemy of Liberalism promoting individuals' liberty and autonomic right. However, there is another form of communism defying the existence of one single state authority commanding economy, the means of resource distribution, and society (the interaction of individual citizens), which is compatible with Liberalism. 

 

The United Soviet Socialist Republic (USSR) was the former suzerain nation of the socialist nations following the orthodox Marxist doctrine advocating for the socioeconomic evolution towards communism. The USSR no longer exists while there are still remaining remnants of the nations which still retain the Soviet style socialism. These remnants are controversial because many of them seem to have abandoned their original political principle. Furthermore, the main point of this essay is to affirm that the orthodox Marxism is not only the political philosophy supporting communism.

Some Asian socialist states ruled by a Communist/Marxian-socialist party seem to have diverted from the direction of their original communist ideal. They have actually adopted the intense capitalist practices while they self-proclaim to maintain their Marxist principle as their excuse to prop up their one-party dictatorship. Therefore, their characteristics are actually opposing to the communist ideal aspiring for the egalitarian socioeconomic state.

Cuba might be only one socialist nation maintaining the orthodox Marxian style communism in a legitimate way. It still keeps the state ownership based economy as well as the diverse distribution of resources securing their reasonable standard of living. At the same time, Cuban government implements the Soviet style autocratic paternalism to cohesively unify her individual citizens under the oppressive one-party authoritarianism suppressing individual liberty. This is the factor that the orthodox Marxism is not compatible with Liberalism.

By contrast, there is another form of communism called Anarch-Syndicalism  which aspires to establish the egalitarian socio-economy without an autocratic paternalism such as the orthodox Marxian proletariat dictatorship. Its economy and political administration are run by cooperative unions of individuals which are spontaneously formed by individuals' voluntary cooperation without a cohesive force of any authoritarian organisation. Therefore, it relies on each autonomic individual citizen to manage their own political administration with their free will free from authoritarian oppressions. 

This is a anarchist political philosophy defying the existence of nation state government, the cohesive institutionalised authoritarian organisation. This is a radical socialist political philosophy defying not only the oligarchy by the capitalist class elites manipulating socio-economy but also the monetary market economy demanding an intense conformity for all individual citizens as the means of production. This is a libertarian political philosophy promoting equal treatments to all individuals regardless of their gender, ethnic, and physical characteristic origins inside this mutualist community avoiding any stratified institutional administration. 

Anarch-Syndicalism is perhaps only one anarchism having been practised in real through the history. The Second Spanish Republic centred in Catalonia in the early 20th century was the innovative state adopting the Anarch-Syndicalist system for economy as well as political administration. Even though it lost the Spanish civil war then, it can be said to be reasonably successful enough to maintain the state under such an administration sufficient enough to continue fighting back. 

Their participatory economy, where various business decision-making processes of one firm are democratically managed by its trade union members, was successful enough to maintain the productivity required to fight against their opposing force. Because their profit was returned to each individual worker participating their production, the motivation of their daily business activities as well as their contribution to the entire commune was high enough to fight back against their opposing force. This can be compared to the direct democratic state of the ancient Athens where individual citizens were so proud of themselves as its non-expendable core-members of their state that they had such a strong voluntary spirit to keep fighting in a war.

In Japan, there were some politicians who were advocated to Anarch-Syndicalism before the World War 2 (WW2). Even though this policy was not put into practice in real, this political movement was influential to the various contemporary rebellious political factions against the contemporary Western capitalist imperialism. This influence is non-negligible for explaining the spiritualism of the contemporary status quo Touseiha administration during the WW2 despite their different political characteristics.

A former Japanese government bureaucrat Kunio Yanagida was inspired by an anarchist communist philosopher Kropotkin whereas he was a strong Japanese nationalist at the same time. Mr. Yanagida had a unique attitude towards the issue of the Japanese monarchy Tenno system. He attempted to restore the pre-modern traditional Tenno system linked to the original Shinto shamanism while criticising the current modern monarchism strongly tied up with the modern nation state and its modern state capitalism. His own plan was to establish an Anarch-Syndicalist state of Japan based on the decentralised pastoralist environment where all the autonomous individual habitants mutually cohabit together with their own free will.

The idea of Communism should not be monopolised by the orthodox Marxists; There is a variety of Communism which actually challenges against the orthodox Marxian style and is compatible with Liberalism. There have been various new political philosophical movements of challenging the combination of capitalism and modern nation state government. Michel Foucault was a remarkable philosopher accusing the oppressive characteristics of the entire modernity. 

Foucault's philosophy is often criticised as an anachronistic because he seemed to romanticise the pre-modern feudalist society to a certain extend. Yet, his theory clarifies how the emerging modernity with its nation state and capitalism has deteriorated individuality of autonomous individuals by forcing the conformity to the ruling class interests and the entire monstrous mechanism of the modern nation state. His idea was to respect each unique characteristic of individuals not undermined by an institutionalised socioeconomic structure, and his policy is often introduced as the postmodern Anarch-Syndicalism. 

In conclusion, Communism itself is not a bad idea as long as its form is compatible with Liberalism such as Anarch-Syndicalism. For the time being, capitalism with its monetary based market economy prevails as a popular socio-economy. Nevertheless, it is always worth off to brainstorm to evaluate any other future socio-economic alternative. Hence, Anarch-Syndicalism as a good form of Communism can be a good candidate.

Database and Storage

 

The main components of computer are Central Processing Unit (CPU), Memory, and Storage. With comparison to human brain, CPU is the core part in charge of thought processes, Memory takes part of the short-term memory assisting these processes, and Storage covers the long-term memory storing information about experiences and knowledge. The computer server is composed of them while proportion of each component depends on the work duty of each server. A personal computer (PC) contains these three components together with a smaller scale inside it. People are often confused with the difference between the database (DB) server and the storage server because they tend to think both functions are the same or similar to each other whereas they take a part of different roles from each other. 

The DB server deals with sorting the data which must be ready to be downloaded, uploaded, and queried at any time the task is carried out inside this server network. Its weight on CPU and Memory is relatively higher than the storage server specialising in Storage. The DB server needs constant electricity supply all the time for running its CPU and Memory. There are basically two types of database, the vertically scalable database for the structured datasets, sorted out by the specialised programming language such as the Standard Query Language (SQL), and the horizontally scalable database for non-structured datasets. The former is good at the complex processes of handling the datasets required to be properly structured whilst the latter is for handling the multiple kinds of large datasets together at once. There are also furthermore specialised DB servers for such as data analysis, chart creation, data transfer, and data warehousing requiring a complex data query. In particular nowadays, the big data handling is so demanded all the more that an independent DB function each purpose is necessary to equip. Therefore, each independent DB server for each specialised task is more required than before. 

The storage server is for storing various sorts of information including the information of the already processed data and the archive memories of any workload of the entire server network. Although it does not need a constant electric supply, there is a required process for querying the information query. For example, with reference to Amazon Web Service (AWS), Amazon Athena, the interactive query service applying the standard SQL for analysis, is used for calling the storage service of AWS called Amazon Simple Storage Service (S3). The snapshots of various archives are stored there as a backup for a sufficiently long time period, which requires the process for restoring them. The logs of actions taking places in a server network are often stored in the storage service because the quantity created for the logs is huge and they have to be stored without being modified for a long-term. A static website, not needing a constant feed of streaming data, can be located in the storage server such as Amazon S3 instead of the server instance such as Amazon Elastic Computer Cloud (EC2).

Overall, focusing on the difference between their tasks, it clarifies the difference between DB and storage specialising in their own unique tasks borne to each other. Specialised DB is demanded for various specialised data handling tasks. Various compliance issues demand a durable storage capable to store the information set with a substantially high volume in a sufficiently long term. The key to understand it is to understand the factors of these computer components.

Democracy of the modern world under challenge

 "Liberal Democracy V.S. Authoritarian" is a hotly debated topic especially while China and Russia involving their peer alliance non-democratic nations intensively interfere in various foreign affairs nowadays. In the meantime, both the words "Democracy" and "Liberal" are frankly quoted as the counterpart nations of these authoritarian nations ruled by an iron fist of one party or any other autocratic figure. Therefore, it is suspicious to define whether or not these so-called Liberal Democratic nations are truly liberal as well as democratic as what these original words' definition implies.

The point to be critically evaluated here is that almost all those nations are administrated under indirect democracy which selects the limited number of representatives controlling over the political affairs. Perhaps, Switzerland might be only the democratic nation involving the majority citizens actively participating in their political affairs nowadays. Politics of the other "democratic" nations is handled by the chosen elites called politicians self-proclaiming to represent the majority citizens. However, it is often questionable to define as truly representing the majority individual citizens. 

Technically, these citizens are entitled to cast their vote to select these politicians as their representatives. Nevertheless, in reality, indirect democracy hardly represents the majority citizens. In particular, those with the constituency based electoral system seldom represents their majority citizens proportional to their population. Even by adopting the proportional representation to their electoral system, it is still difficult to satisfy elected politicians proportionally representing the citizens. Politicians may manipulate their fellow citizens for their own favour rather than what these citizens really need and want. Politicians often form their factional group which selects opinions matching with this group interest while excluding each individual's own will. 

At the same time, it is also critical to evaluate that democracy does not always imply fulfilling individual liberty. There is a risk that some institutionalised citizens from their own peer group to marginalise the other individual citizens for their favour propped up by their peer pressure as same as the aforementioned politicians. In order to secure liberty for each autonomous individual's sovereign, it may require an invincible ethical principle promoting their decision-making process as a guideline while enabling politics to represent their opinion. This sounds like a religion, but this should be the morally neutral principle not favouring any particular religious organisation. 

The modern complex institutional structure demands the centralised bureaucracy requiring the elites highly trained with a complex skill as well as the friendly connection and apprenticeship with the elders of this established structure to administrate the entire politics. Therefore, this inevitably needs to select those specialising in political organisational skills and connections with their factional peer groups whereas the rest majority are often ostracised from these influential peer groups. The true nature of the modern indirect democracy is much closer to that aristocracy or oligarchy rather than what democracy really means. All in all, the modern indirect democracy tends to be diverting from what both democracy and liberalism attempt to accomplish.

Nowadays, instead of relying on the centralised political organisation such as nation state government, it will be more efficient to adopt a decentralised administration system propped up with the spontaneous interferences among individuals as as the peer-to-peer (P2P) system. Due to the current remarkable information technological (IT) development, it is more possible to organise the decision-making process at each non-scheduled scattered time period than the past relying on the congregations of representatives gathered at a scheduled time. It is really questionable to insist on the need of replying on the representation by politicians and bureaucrats nowadays. 

Both (the modern indirect) democracy and authoritarian can be obsolete already. Each individual will be able to directly reflect their opinion over the networks of where they want to reflect it upon The furthermore developed IT will help sorting out individuals' opinions and efficiently optimising resource-distribution plans. It will even no longer require a political congregation of direct democracy seen in the ancient Athens because each political decision-making is processed at each spontaneous time, place, and occasion by means of its need and want. This new ideal is a combination of anarchism by individuals and technocracy by the IT resources. 

The new alternative to religion will emerge to fulfil the ideal of liberalising each individual in the world. As all the individuals are connected to each other across the borders more than ever, their spontaneous interactions will bring up the shared objectives and guidelines not bound to their distinctive traditional religious, ethical, and social norms and values. As Aristotle said, human being are naturally social, the naturally derived spontaneous interactions of human individuals will induce them to voluntarily create their own minimum required guidelines and rules necessary to prevent them from unnecessary conflicts and miscommunications. Then, even without a paternalistic intervention, they will find their own optimum method of forming consensus through their own try and error. 

Sum up, describing the modern indirect democratic nations as "Liberal Democratic" is questionable. These indirect democratic nations are not quite identical to the true characteristic of what the word "Liberal Democracy" should be derived from. The border splitting individuals out itself is already an obsolete element disrupting the true liberal democracy spontaneously formed among individuals. Hence, the dispute over "Liberal Democracy" and authoritarian is not essential to consider accomplishing the true ideal of liberal democracy in general.

To divert Stagflation, the conservative macroeconomic measure prevails

 

The whole world is struggling with Stagflation which is derived from the combination of two words, stagnation (of the output) and (the price) inflation. This is also called the bad price inflation by all the economic theoretical perspectives regardless of their controversiality of defining the inflation effect on economy. The lacking aggregate supply repressing economy causes both the cost push for the suppliers and the real income depreciation of consumers and investors. This is the macroeconomic phenomenon nobody welcomes.

The last major Stagflation in the past took place in 1970s when the oil price shot up while the dependency of the major economies on the oil was already substantially high. At that time, many economists especially from the self-proclaimed liberal side or the left-leaning side supported to increase the aggregate demand. Their assumption supported the Philips curve theory assuming that the price inflation rate and the unemployment rate are negatively correlated to each other. Their main reasons are the inflations lowers the real wage of employees (i.e., the cost of employers to hire), and also stimulates the entire market economic activities. Then, they suggested that the perpetuation of the inflation was more tolerate-able than the perpetuation of the declining output.

These pro-inflationary economists expect that the inflation of both the demand push (good) and the supply short (bad) stimulates the market economy with a high incentive of consumption, investment, and production supply. Then, this stimulated market multiplier is anticipated to increase the output growth which offsets all the negative effects of the inflation. Therefore, instead of controlling the inflation, they tolerated the ongoingly rising inflation by overestimating the positive effects while underestimating the negative effects of leaving the high inflation at the contemporary time period. This is why they advised the contemporary government to inject more money instead of tightening it.

Nevertheless, in reality, the negative effects of the price inflation such as increasing  suppliers' costs and depreciating the real income of citizens were more significant than their assumed positive effects. The inflation has rather discouraged the production motivation of suppliers because of the surging cost prices. The incentive of consumers' consumption expenditure and asset investment was hardly stimulated. These citizens rather suffered from the lack of reasonable employment opportunity and the depreciation of their real income taking account of their living cost. The excess money backed up by the government expenditure flowing into the contemporary economy did not seem to have improved the quality of the contemporary socioeconomic environments.

This is the time that the anti-inflationary conservative economic theorists, most notably Monetarists, emerged as the counter-revolutionary against these self-proclaimed liberals and the left leaning economists. They claimed for the extermination of the price inflation even by incurring the negative output gap (slowing or penalising an economic production level) in the short run. Their conservative measure against the inflation was detested by many contemporary citizens whereas it succeeded in stimulating the macroeconomic performance deserving these citizens in consequence later.

First of all, the interest rate must rise for suppressing the excess flow of money even as well as preventing the real interest rate from being substantially low. Secondly, they are highly sceptical about the positive effects of the price inflation such as the incentive for suppliers supplying more and the motivation of investors and consumers purchasing more. Instead, they insist on the bad side effects of the perpetuated inflation rather than the temporary shrinking output level.

 Nowadays, the US government and the Federal Reserve Bank (FRB) as well as the European central banks are aware of this lesson in the past so that they decided to raise the interest rate and tighten the money supply even by slowing the economy down further with still hunting socioeconomic sufferings from the pandemic. What the current US government under the Democratic party administration is imposing some unnecessary regulations on business activities in spite of the still stagnant world economy, which seems to be rather irrelevant to suppressing the inflation. Therefore, the current US policy of the interest rate as well as the quantitative tightening are something not to blame for the current stagnant performance of the US economic policy.

On the other hand, the current Japanese government performance under this currently ongoing Stagflation is notably poor. They are reluctant to raise the interest rate even with both the surging price inflation and the Japanese Yen (JPY) value depreciation in the foreign exchange. The reason of both the current government and the Bank of Japan (BoJ) rejecting the interest rate rise has been explained in another article so please kindly find it to read. In addition, they still keep their loose money supply as favouring their peer corporations while the majority Japanese citizens are suffering from the income shortage in their daily life. 

The other suspicious phenomenon is that the opposition parties present no effective policy against the current stagnation. In Japan, no party promises to raise the interest rate at all whereas their manifesting policies are only the temporary countermeasure against this ongoing Stagflation such as tax cut. Even if tax cut may offsets the real income depreciation by sparing the disposable income, the steadily increasing price level caused by the surging costs of both domestic suppliers and imports will depreciate their income furthermore in the middle run. Moreover, investors are less likely to split their extra income gained from tax cut to invest it into their domestic capital market because the currently ongoing currency depreciation is steadily reducing the assets value in the domestic market.

In the meantime, Japanese politicians should be concentrated on tackling Stagflation at first for the time being. The interest rate rise as well as the quantitative tightening are supposed to be implemented.  In particular, the money supply to those corporations of the government peer group must be tightened because it seems to be excess and unnecessary under the current macroeconomic environment. Otherwise, the damage which Japan and its majority citizens will suffer will be even more severe soon. Their real income depreciation will keep steadily impoverishing the majority Japanese citizens.

In conclusion, the pragmatic policy implementation is the key to solve the suddenly emerging problem by referring to the past example of solving it. At the time of Stagflation in particular, the conservative measure is worth implementing even through not supporting the conservative policies in general.