JFTC ESSAY COMPETITION 2009

Name First name WILLIAM Family name NYARKO

Country GHANA　

Organization PRESBYTERIAN BOYS’ SENIOR HIGH SCHOOL, LEGON　

（University/

Company）

Date of birth Month 　　　　/　　　　OCTOBER　　　　day　/　　　04　　　　 year/ 1991

Sex 　MALE

Phone 　233-203020132,233-276043841

E-mail williebareback@yahoo.com　
 Present WILLIAM NYARKO , C/O PAUL ANI - NYARKO , P.O. BOX 553 , MADINA-AC

Address ,GHANA　

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【ESSAY】

TITLE

　 The Japan-Adamic Economic Framework—Harnessing and Merging Japanese Ability & Adam Sm

True Capitalist Ideology

SUMMARY (about 400 words)　　※The summary is very important for judge.

My essay corroborates that, Anglo-American capitalism (modern-style global capitalism) is by itself surprisingly

enigmatic. It points out some of the seemingly ‘esoteric’ misconceptions and loopholes in the subprime mortgage

market and enumerates empirical and hypothetical ideas to suggest that global capitalism is deficient of certain

rudiments which must urgently be incorporated as part of the basic tenets of a true and wholesome capitalism. In

general, my essay renders capitalism its due adulation as an awe-inspiring economic system which has by far, do

more good to mankind than the contrary. At least empirical research and study, history, experience and common

sense does nothing but to confirm that fact.

An undisputed myriads have raised concerns about the skyrocketing dive in global economy and consequently

questioned capitalism as to whether it should be an opportunity cost and be ditched to make way for another dist

alternative. With that on board, I argue that the primary issue here is contemplating on the universal arduous tas
polishing and reshaping the virtually amorphous state of modern capitalism, not the other way round. My essay s

out just the fitting, comprehensive set of directives to follow. Through research and study of economics at a junio

level, I have collated varied analysis and guidelines into a framework to be followed by Japan which could promise

long-term success and recession-free world. This framework which I call, “Japan-Adamic Economic Framework” ha

been coined as such, to merge Japan’s unique capabilities and culture alongside Adam Smith’s (The Father of

Capitalism) promise of spick-and-span capitalism. Japan, given its peerless degree of human resource quality,

considerable wealth, unequalled level of technology, to say but a few, has the force majeure in realizing the globa

aspiration of a sustainable, increasing powerful economic world. Japanese Sogo Shosha has proven as an epitome

true business model, having been at the forefront, fueling and leading the deluge of corporations the world round

the road to recovery. In just two days, tomorrow will be yesterday! Via” Onus on the Bonus”, “An Act to Impact (Ph

I and II)” flanked by other striking sections, I furnish my essay with pioneering parameters as to how Japan should

about this global issue now for a prosperous future. But the best thing about the future is that, it only comes one

at a time, so I strongly entreat Japan to react now because, as Johann von Goethe said, “Knowing is not enough, w

must apply; willing is not enough, we must do”! Now is the time!

■Please write your essay(no more than 4,000 words in English)from next page.
INTRODUCTION

The outset of my essay draws inspiration from Jack Canfield quote:

“As you begin to take action toward the fulfillment of your goals and dreams you

must

realize that not every action will be perfect. Not every action will produce the

desired

results. Not every action will work. Making mistakes, getting is almost right, and

experimenting to see what happens are all part of the process of eventually

getting it

right.”

Capitalism has gone through varied phases since its ushering-in that, wherever

he may be, Adam Smith—Father of Capitalism— would startle at how modern

man is playing the game. Venezuelan President Hugo Chavez has blamed

capitalism as “responsible for the great evils of the world”. Apparently, no

country has escaped the “battery” of the unprecedented unemployment level:

with Britain’s own hitting a record 8 % (the highest since 1995)1 . We hear of the

huge budget deficits of even developed countries as it’s often not the case, with

US and China being a staggering $1 trillion and RMB 580 Billion respectively. 2

Rife as it is, spending is receding at an alarming rate as remittances from family

abroad wanes to dregs. In Japan, Consumer Price Index (CPI) has fallen by 2.4%
and the general nosedive in Asian, American and European stock market

valuations is no news. The bottom line, then, is to prioritize the need for a

change in the trend of things as sadly but unsurprisingly, the world’s economy is

expected to fall by the end of the year. It is in this accord that, first and

foremost, I uphold the idea that we dissect the crux of the global credit crunch

and subprime mortgage problems, and then correlate them with the conceivable

loopholes in modern, global, Anglo-American capitalism.

GLOBAL CREDIT CRUNCH AND DEFICIENCIES IN CAPITALISM

Primer:

State of neo-Capitalism

For such a long time, the core ideas of capitalism, irrespective of context, have

inaccurately been centered on a framework which embraces institutions and

assumptions like: (1) private property, (2) “unrestrained” freedom of choice and

enterprise, (3) self-interest “-turn-self-centeredness” as a dominant motive, (4)

competition, (5) reliance on the market system, and (6) a “very” limited role for

government.3 Custodians of capitalism have been whisked off by the profit-

motive making them drift far away from Adam Smith’s recommended virtues of

“justice, fairness and honesty” in its praxis. The unscrupulous attitude of

investors and corporate leadership bodies have reaffirmed the verity that the
laissez-faire style attached to Anglo-American capitalism appreciably inspired the

financial crisis. This buoyed up an East Asian think tank to attribute the whole

show to a matter of avarice among the bigwigs, patently in the mortgage

market, they say.

An anti-capitalist URL played the blame game on the insertion of “Social

Darwinism”—the idea of survival of the fittest—, which they say, have

consequently sown a seed of greed and self-centeredness making love—which

leads to caring and sharing—run counter to economic progress. 4 This shouldn’t

have been the case as the recent circumstances of neo-capitalism looks like.

A vital facet of the credit crunch menace is the subprime mortgage crisis. How

were the flame of the mortgage market crisis fanned right from far away US to

the rest of the world?

Let’s see:

The Subprime mortgage circle

The subprime mortgage crisis has once upon a time taken toll in countries like

Argentina, Sweden & Norway & Finland, Mexico and Thailand & Indonesia &

South Korea in 1980, 1992.1994 and 1997 respectively5. However, the prevailing

catastrophe is unprecedented in a way that, it has crossed boundaries and

political frontiers to arouse a global credit crunch.6 Yuliya Demyanyk, who co-
authored with Otto van Hemert to write the book,” Understanding the Subprime

Mortgage Crisis”, inspired my ideas concerning the mortgage market.

Encrypted Mortgage Market—the Misconception factor

Upon thorough reading, I realized that, Misconception within the mortgage

market was a chief basis on which the problem worsened. For example,

• Subprime mortgage loans went to all kinds of borrowers, not just the

borrowers with “checkered” credit reputation. We read from the book

that, “a subprime mortgage loan could also be determined by the type of

lender, the mortgage product itself and how it was securitized, not just the

characteristics of the borrower”. This disproves the “myth” that subprime

loans only went to borrowers with “bad credit”.

• Also, it has erroneously been believed that the declining home values in

the US caused the crisis. Obviously, the decline in home value was

followed by many mortgage defaults and foreclosure but it only revealed

the demerits of subprime mortgages. A research between the years of

2001 and 2007 showed that the crisis was augmenting many years before

house prices even started slowing down.7 So house price rise didn’t cause

the problem as many people in the market believed.

These empirically-proven facts and some other 8 in the book show that, it’s not

all that staggering that we’re in this mess since the so-called major players of

the game didn’t know what was going on, or didn’t pay heed, or ignored the sine

quo non in the subprime mortgage market.

Illustration from The Skinny on the Housing Crisis, published with permission. The Skinny-On®.

IMPECCABLE CONNECTION BETWEEN SUBPRIME MORTGAGE MARKET AND

CAPITALIM—Japan’s treat for the US and the world

In order to ossify Japan’s hope of a nation liberated from future subprime

problem and a world set free from a problem of that sort, I implore Japan to react

to its economy which is underfed in the services sector. The issue of exposure of

Japan to the international community has been on a relative rise since Japan is a

linchpin for a worldly development. In order to demonstrate true altruism which

is a mark of the time-honored Japanese culture and conventional capitalism,

Japan could encourage a pioneering attempt in backing a diaspora of an

equitable number of its youth to immense themselves in international economics

specifically in the aspect of subprime mortgage economics. Japan should utilize

its US relation to advise the US and President Obama to expand the powers of

the Federal National Mortgage Association, affectionately called Fannie Mae. In

counseling the US, Japan should urge the US to design schemes geared toward

formulating policies which will ensure that prospects of insolvency be dodged.

Incorporated in the scheme should be more and more regulations to ensure

sanctity and a check to the activities of executives.

AN ACT TO IMPACT: PHASE I

Thanks to this crisis, the aspect of Anglo-American style capitalism which permits

so much unreserved actions and operations in the financial and economic market

has been stripped bare. As a crucial member of the G-20 and G-8, I argue that

Japan should make a proposal, perhaps at the next summit, or at the Economists

Conference in Doha. The proposal should be an enactment of Capitalism

Reformation Act (CRA) which will spell out a globally regulated framework of

immaculate capitalism. This movement could replace a phrase like “too much

avariciousness, freedom and narrow-selfishness” in Anglo-American capitalism

with a positive, Adam-inspired phrase like, “equitably regulated, just, loyal,

altruistic” capitalism. Moreover, it will repair capitalism and kick out the mistaken

notion that “everything about capitalism is amoral, culturally-devastating and

mono-cultured” as the anti-capitalist URL mentioned earlier perceive. There are

actually no short-cuts to any place worth going and as Napoleon Bonaparte said,

“Ability is of little account without opportunity”, so I call on Japan, having this

superb opportunity, to be proactive and consider the aforementioned proposal of

mine. If tactically implemented, the world will sure be sustainable now and the

time ahead of us.

ONUS ON THE BONUS

In correcting global capitalism, it is as advisable to address the issue of the huge

bank bonuses and incentives as it is to discuss the others. A communiqué

released months ago by the New York Attorney-General Andrew Cuomo,

disclosed beyond-belief news that, top employees at nine US banks that received

government-aid, had shared a bonus pool of $ 32.6 billion: a breakdown of more

than $1 million per employee.8 Similarly but less severely, the issue of

‘unreasonably’ huge bonuses to top executives happens in the EU community,

Asia, Africa and South America. Of course, the “comfort of the AAA+ ratings”9 for

the financial institutions couldn’t outweigh the underlying risks of the bank

executives. As at now, the world has had enough of it and Japan is the world’s
chief channel through which optimum balance in the banking system could be

achieved. How?

JAPAN’S SCHOOL OF HARD KNOCKS—the banking industry

I think, as at now, Japan should have the best banking initiatives in the world.

Why?

Japan has learnt a great deal of lesson and had considerable experience given it

massive shake-up in the banking industry since the mid-1990s, in part because

of forced regulatory changes but mostly because of huge levels of debt and poor

corporate governance:

The late 20th century changes to the overall structure of the state’s

involvement in banking were partly as a result of the failure of the state-

owned long-term Credit Bank of Japan. It, like, its private counterpart,

Nippon Credit Bank, failed in 1998 and were acquired by US enterprise. In

2000, the US private equity fund, Ripple wood Holdings took the long-

term Credit Bank of Japan and it became Shinsei Bank. Nippon Credit

Bank was later Aozora Bank under the US investment fund Cerberus

Group.10

JAPAN’S PIECE OF CAKE

Unlike other developed countries, Japan’s Bank of Japan, has been limited

constitutionally in terms of monitoring and controlling the Japanese Banking

system. For example, the Japan Bank for International Cooperation (a merger of

Japan Export-Import Bank and Overseas Economic Cooperation) fully handles

large credits for international trade. I argue that Japan should overstep the mark

of limiting the government’s power and henceforth, form a single strong central

bank which will harness all the activities of the banking sector. I think regulation

enforcement will be easy here than when the authority is left in the hands of

private individuals. In this way Japan will sure reap some benefits from adopting

a modicum of the communist ideology of running things. This treat will enhance

the global “unity of purpose” objective in some way and be in concurrence with

the principles of Internationally Agreed Goals for Development (IAGD).

JAPAN’S TAKE ON THE HUGE BANK BONUSES

Japan is everything but against employee appraisal procedure and other

corporate motivational endeavors. There is a Japanese culture called Nenko

Joretsu (Nenko System) which allows employees to achieve high salary before

retirement. Despite its flaws, it was some sort of motivation to boost the morale

of workers. However, Japan could be even-handed, principled and ‘capitalistic’ in

her attainment of “fairness, justice and honesty” in the banking industry. In Tokyo
on 21st June, 2005, three former executives of the failed long-term Credit Bank of

Japan were found guilty of covering up massive bad loans resulting in their

conviction and fleeting suspension from service. The bank’s former President

Katsunobu Onogi had a 3-year imprisonment and 4-year suspension from

service. I urge Japan to continue with the good work of putting “financial

criminals” at the right place and simultaneously reward enterprising individuals

in the sector reasonably.

To the world:

ACT TO IMPACT: PHASE II

I challenge Japan to embark on a global revitalization movement to the

establishment of the Task Force of Expert (TFE) as proposed by the then UN

General Assembly President Miguel d’Escoto in 2005. The task force with the

inclusion of economic aficionados the world over, should agree on undertaking a

new comprehensive review of the international financial regulation system. Like

the Kyoto Protocol which is yet to be supplanted, new reform agreement pact

should be organized to check the operation of financial bodies in each and every

UN country. Japan should hear me out since I am very optimistic this will work. It

could usher in an optimum, unanimous, reasonable package for bank executives

in every country. It is imperative that, this Task Force work under the aegis of
internationally-recognized body like the International Labor Organization to

protect the interest of its objectives.

A DROWNING MAN’S HELP FOR HIS UNSAFE KID

Japan is comparable to a drowning man who wants to save his child from a

blood-thirsty prey. In order to be able to save his kid, the drowning man must

make efforts to escape being submerged under the water. As a BBC report in mid

September this year, unveiled the news that, Japan’s life blood (Exports) to the

US were down by 39.5%, China by26.5% and to EU by 45%. Unemployment was

at a record level of 5.7% and Consumer Price Index (CPI) fell by 2.2%, raising

fears of a “new deflationary spiral similar to the one which paralyzed Japan for

much of the 1990s”11. Like the man, Japan must be able to overcome the glitch

of ‘drowning’ before she can be in the best capacity to saving the world.

NEW ADMINISTRATION, NEW APPROACHES

I am an optimist who believes Japan hasn’t run out of ideas. The hitherto

mentioned BBC report gave an impression that the Democratic Party (DP) led by

Mr Yukio Hatoyama will “cancel unnecessary and costly infrastructure projects,

slim down the country’s bloated bureaucracy and invest in areas like

environmental and medical technology, which many party say they have
identified as the growth area of the future”. This mission is not as ambitious as

people perceive, given Japan’s very high Purchasing Power Parity

($3,774,086,000,000.00, for the year 2005)12 and impressive level of technology.

Hence, I urge the Mr Yukio Hatoyama and his administration to rightfully

implement the said mission, tackle the issue of declining youthful population and

concoct measures to tackle the deflationary glitch. This should surely be

revolutionary and groundbreaking in order to safeguard the lovely people of

Japan, the future generation and the world at large. Thanks to the Centre for

Strategic and International Studies (CSIS) and the Asian Society (AS), newly

discovered developments were debated on at a seminar held by Japan External

Trade Organization in Washington, D.C on 2007 where the East Asian economic

integration contemplated on the proposed Free Trade Area of the Asia Pacific

(FTAAP) by the US. Such economic meetings should be held between countries

and continents so as promote unity and sanctify capitalism as a flawless system

in the long run.13

THE SOGO SHOSHA—a quintessence of ability!

The sogo SHOSHA are general trading companies (GTCs) dealing with a wide

range of products (WIKIPEDIA). With over 3937 subsidiaries and affiliates and a

consolidated sales volume of more than ¥72 trillion ($670 billion dollars) in fiscal
2005, the top seven SHOSHA and the others inclusive have really played an

exigent role right from the post-war recovery period through the time of the

Plaza Accord to date.14 In spite of this, recent report show that, the SHOSHA’s

market has declined in dribs and drabs mostly owing to the fact that a great deal

of manufacturers have opened up branches and plants in countries with weaker

currencies.15Many Japanese companies have started to manage their own

internal and international trade and business meaning a dwindling SHOSHA.

What, then, is the way forward?

JAPANESE BUSINESS CULTURE, THE SHOSHA AND THE WAY FORWARD

Zaibatsu (Family-controlled vertical monopolies) were dissolves and re-organized

into Keiretsu (WIKIPEDIA). This made the Japanese business culture of Nemashi—

where top management laid foundation for some proposed change or project by

talking with people and gathering support and feedback—flourish. As many

policymakers and economist suggest, I think Japanese SHOSHA should properly

embrace increasing globalization by liaising with the external community to gain

sufficient experience in the aspect of marketing and expertise. Unbeknownst to

many, I believe that not only Japan alone, but the world need the SHOSHA to

brook and endure the prevailing keen competition. The SHOSHA should hold talks
with its constituents and companies for them to come together and coordinate

for a strong SHOSHA and a strong Japan. Do not forget that: A

STRONG JAPAN = STRONG

WORLD

CONCLUSION

Most of us serve our ideals with fits and starts. The one who makes a success of

living is one who sees his goals steadily and aims for it unswervingly. That’s

dedication! Nippon, the land of the rising sun can and will surely rise above the

gathering storm of unguarded, scrawny and incomplete Anglo-American

capitalism, to find sunshine. This can only be achieved by not downplaying the

issue of correcting this form of capitalism but by attaching urgency and outright

attention to reshaping this cul-de-sac. Looking at this issue, Japan and Japanese

SHOSHA should ensure that these key words be maintained in their every

endeavor both nationally and internationally: JUSTICE, FAIRNESS AND

HONESTY.

Japan should create a path of creating awareness for the whole world to know

that the time has come for capitalism to be reformed. I want to let the world
know, through Japan, that bailouts only try to disentangle symptoms of recession

but do nothing to regulate behavior of our so-called executives whose avarice

sponsored the financial crisis. In a nutshell, I call for sensibly stringent regulative

framework to hold sway over every financial and economic body.

This is Reformation, This is Solution, and this is real Adam-inspired Capitalism!

1
Office of National Stastistics,2009
2 Jeff Bator, 2009.
3 Economics: Principle, Problems and Policies by Campbell R. McConnell and Stanley L
Bruce,1996
4 Problems with Capitalism, unknown anti-capitalist website
5 “Understanding the Subprime Mortgage Crisis” by Yuliya Demyanyk and Otto van Hemert,
2008.
6 “Understanding the Subprime Mortgage Crisis” by Yuliya Demyanyk and Otto van Hemert,
2008.
7 Understanding the Subprime Mortgage Crisis” by Yuliya Demyanyk and Otto van Hemert,
2008.
8 BBC News, 2009.
9 Dr Noel Purchell, Caux Round Table, 2009
10 O’Kane, Gerard, “Banking”, Microsoft® Student 2007 (2007) Microsoft Corporation, 2006.
11 BBC News, 2009.
12http://www.worldbank.2005.worlddevelopmentindicators.nationmaster.com.graph/eco_gdp_e
conomy_gdp.ppp
13 http://www.jetro.go.jp/en/reports/reports/market/pdf
14 JFTC official website
15 http://www.jetro.go.jp/en/reports/reports/market/pdf