A socialist country is a nation where the government aims to run the economy along socialist principles. This means the ending of private property and taking the economy under state ownership. Essentially, in a socialist country all businesses are owned by the government.
Ask someone their opinion of Japan and they will often say that the country is wealthy and well-ran. However, few people in the West know much about how Japan run’s it’s economy. So, could it be said that Japan is a socialist country? Definitely not, and we’ll explain why…
1. Japan Has A Capitalist Economy
A first reason why Japan is not a socialist country is because it has a free market economy.
Under socialism, a country’s economy is collectively owned by the state. The aim of socialism is to create a more equal economy by bringing the ‘means of production’ under the control of workers. As the state represents the workers, it means in socialist countries all businesses and industries are owned by the government.
Japan is not a socialist country because its economy is not entirely controlled by the state. In Japan, people can own their own businesses. People who run enterprises may keep their profits and invest in their companies as they choose. The economy of Japan is run on free market principles – meaning that the government takes a limited role in the managing of the economy.
The economy of Japan is run on capitalist principles. This is a major reason why it is not a socialist country.
The law in Japan protects private property. This is very different to in socialist countries where private property is abolished, and the economy is entirely managed by the government. The fact that the Japanese economy is not government-directed is a key reason why it is not a socialist state.
2. The Country Has A Free Labour Market
A second reason why Japan is not a socialist country is because it has a free labour market.
Socialist countries do not allow freedoms within their labour force. This means that people in socialist countries cannot choose where they work. It also means wages are set by the state. As the economy in a socialist country is under state control, the government must direct the labour force to where people and skills are needed.
Japan is not a socialist country because people in Japan can choose where they work, and what they work as. Japanese people are able to train in industries they choose, apply for jobs with companies they want to and leave the workforce as they please. The Japanese state does not put controls on where, how and when people can work.
As well as Japanese people being able to choose where they work, Japanese companies can also choose who they hire. Wages in Japan are not set by the state but are determined by factors in the wider economy. These are key reasons why Japan is not a socialist country.
3. Japan Only Has A Few Nationalised Industries
A third reason why Japan is a not a socialist country is because there are almost no nationalised industries.
Nationalisation is when a company is owned and operated by the state. An industry that is nationalised means all the business within that economic sector are ran by the government. In socialist countries, the entire economy is nationalised with all sectors coming under state control.
Japan has very few nationalized companies. No major sectors of the Japanese economy are entirely state-owned. The companies in Japan that have been nationalized, including Japan Airlines and the Tokyo Electric Power Company, were nationalized due to financial crises or disasters. They were taken under state ownership in an emergency capacity. This differs to socialist countries where industries are nationalized for ideological reasons.
The fact that only very small parts of the Japanese economy are nationalised, and the vast majority of businesses are privately owned and operate under capitalist economic principles, is a key factor in why Japan is not a socialist country.
4. Japan Does Not Have A State-Controlled Finance Sector
A fourth reason why Japan is not a socialist country is because its financial sector is not state controlled.
In socialist countries, financial institutions such as commercial banks, investment banks, insurance companies, brokerage firms are all owned by the government. There are no independent banks or money lending organisations. There is no competition within the financial sector of a socialist country. People in socialist countries have limited options for where they save, spend, and invest their money.
A major reason why Japan is not a socialist country is because it has competition within its financial sector. Japan has many large banks, as well as smaller financial institutions. These businesses compete to attract customers. There is limited government involvement in the banking sector of Japan. Financial institutions in Japan have a limited amount of government regulation – this differs greatly to socialist countries.
The freedom and openness of the financial sector in Japan is probably one of the biggest reasons why it is not a socialist country.
5. Private Companies Run Utilities and Public Services In Japan
Another reason why Japan is not a socialist country is because the utilities are not state-owned.
In socialist countries, the economy is state ran. This means all utilities, such as electricity, gas, water, tele-communications, and the internet are operated by the government. This is no competition within the utilities market. People in socialist countries cannot choose which utilities providers they use. Public services, such as railways and airlines, as well as all hospitals and schools, are also state-run in socialist countries.
In Japan, the main utilities are run mostly by private companies. In some sectors, such electricity, the state grants the right for a single private company to run a part of the national grid. However, across Japan, utilities are generally run on a capitalist and for-profit basis. This is a major reason why Japan is not a socialist country.
Public services in Japan are not entirely state owned. For example, in 1987 the railway network was privatized and is now ran by several regional private companies. Other areas of transportation, including aviation and auto-mobiles, also have private ownership in Japan.
The fact that Japan allows for capitalism within its utilities and public services shows that it is not a socialist country.
6. Japan Is A Multi-Party Democracy
A key reason why Japan is not a socialist country is because it is a multi-party democracy.
Socialism is an economic model in which the means of production are owned by the state, it is not necessarily a political model. However, there has never been a socialist country in history that has been a democracy. In socialist countries, for the government to retain complete control over the economy, it needs to limit the freedoms of the people.
Japan has been a democracy following the Second World War. The country holds regular elections and Japanese people are able to vote for their leaders. Political institutions in Japan are accountable to the people. Japan has a constitution that protects democracy, and the country sees peaceful transitions of power with the electorate able to remove governments.
The long history of democracy in Japan, combined with the country’s accountable political institutions, are a major reasons why it is not a socialist country.
7. There Is A Free Press And Independent Judiciary In Japan
A final reason why Japan is not a socialist country is because it has a free press and independent judiciary.
As we’ve said, in socialist countries the state has entire control of the economy. In order to exercise this control, socialist countries have removed the freedom of the press and independence of the judiciary. These have been seen as being threats to the government’s economic control. In socialist countries people do not have the right to freedom of speech, assembly, association or to write in the press what they want. There are also no rights to a fair and independent trial.
In Japan, there is a vibrant free press. The country also has freedom of speech and Japanese people are unhindered by the state in their assembly and associations. Japanese newspapers, broadcasters and websites can accurately report on the news and political events. There are no laws in Japan restricting people’s basic freedoms. These are key reasons why Japan is not a socialist country.
Japan has an independent judiciary. The state does not arbitrarily detain people in Japan and there are checks and balances built into the Japanese legal system. The fairness of the Japan’s legal system is another major reason why the country is not socialist.