Fujio Mizuoka

Japan: the economic consequences of the fetish of space

For a generation until 1991, Japanese land market enjoyed the rising property price that outpaced the rate of inflation. The ‘golden age’ of Japanese economy was kept aloft on the fetishism of land, which never perishes and believed to keep augmenting its capital value forever. The banks gladly financed investment as long as a corporation offered property as collateral. The current property boom in Europe and North America, which some believe would keep economy aloft forever, is simply the déjà vu of this past Japanese experience. In 1991, Japanese property market collapsed and the entire musical chair game turned into debt nightmare: once prime property became the source of non‐performing loans, which brought many banks into run for loan stripping out of their former intimate clients, forcing the corporation into more retrospective and conservative business strategies. The whole processs ended up with ‘the lost decade’ of Japanese macro‐economy, the stagnation that has lasted 13 years so far. After all, the fetish of space is never capable of acting as the lynchpin of a macro‐economy forever. This bitter Japanese experience should be a lesson which other economies currently brimful of property boom euphoria.

Radical Political Economy

Radical political economy emerged out of critique of capitalism from conceptual and moral grounds, and developed in conjunction with the trade-union and left-wing political movements. Unlike neoclassical economics, which takes market foundation of economy for granted and eternal, radical political economy treats economy as a social organization and maintains ephemerality of market system, as well as capitalism. In Capital, Marx put forward that capitalist economy is a particular kind of market economy where labor power is also commodified. In this analysis Marx sublimated moral critique into conceptual and offered conceptual base to radical political economy. There are three main contributions in Capital: (1) fetishism of commodity, (2) surplus value, and (3) law of tendential fall of profit. After Marx, researches extended to crisis theory, monopoly capital and imperialism, management of socialist economy, etc. In spite of oppression arising from the Cold War, the anti-Vietnam War Movement instigated resurrection of radical political economy, and the Union of Radical Political Economics was founded in the US in 1968. Their agenda included economic segmentation and poverty, labor process and the firm, crisis theory, dependency, theories of state, culture, and ideology. When it comes to globalization, however, radical political economists tend to view it from the dependency perspective of dependency theories, which interpret the problem of underdevelopment homological to capital–labor relations transposed horizontally across space. This simplistic argument can be rectified and radical political economy conceptually enriched through closer interface with critical economic geography to formulate a real ‘middle-range theory’. Economic geography can also be placed on a more critical and conceptually robust foundation by incorporating crisis theory, neocolonialism, dependency, and new international division of labor (NIDL) theories.

Production of Colonial Consciousness Among Middle-Class Chinese: Legitimisation of British Rule Through Education

We have so far dealt with the ethnic integration of Chinese into the colonial society through the spatial policies and production of the built environment. Nevertheless, development of the consciousness of the Hong Kong Chinese to conform to the colonial system must also be cultivated through teaching of ideologies. This is particularly important for the middle-class Hong Kong Chinese who had the opportunity to receive secondary and higher education and assume substantial positions after graduation. The contrived laissez-faireism through creation of scarcity, the common tactic that colonial government adopted for space, is quite visible here as well. It is to this topic that now we turn.

The Colonialism Behind the Making of the Urban Rapid Railway System (MTR)

We discussed in the previous chapters that the colonial government developed the physical system of spatial configuration to function as the ‘arena’ of effective laissez-faire competition of incoming Chinese from the mainland, and as a means of obtaining the most revenue out of colonial space.

Industrialisation and Space in the Development of Kwun Tong Industrial Area

The production of the built environment as the physical foundation of laissez-faire was essential for solving dialectics of space and people towards sustenance of the colony of Hong Kong, through capital accumulation and ethnic integration.

British Colonialism and the ‘Contrived Laissez-faireism’ in Hong Kong

The dawn of Hong Kong history came with the British merchants selling opium to China in exchange for silver. Faced with fierce opposition from Lin Zexu to halt the drain of the species, the British government decided to intervene in order to protect the merchants’ free trade. One of the most prominent opium traders was William Jardine from Scotland. Upon victory in the Opium War, Hong Kong was formally ceded to Britain, which declared it a British colony in 1843 under the Treaty of Nanjing.

Subsumption of Hong Kong Space into the British Colonial Apparatus

Once upon a time, aboard flights landing in the former Hong Kong International Airport (Kai Tak), passengers were frightened to see the densely packed cityscape of Kowloon Peninsula just a few hundred metres below them. Now that Hong Kong International Airport has moved to Chek Lap Kok, they feel deceived by the comfortably expanding grassy hills of Lantau Island, with hardly a house upon it, except for only a small patch of new development at the bottom of the hill. Indeed, the apparently ‘overpopulated’ Hong Kong is still endowed with much empty space. In 1996, a year before the British were to leave Hong Kong, only 175 km2 out of 1095 km2, or 16.0% of the colony’s land, was classified as ‘developed land’, which was either in active urban use for putting up commercial buildings, residential housing, industrial or government buildings, roads or rail rights-of-way, or was left vacant awaiting development. Adding agricultural fields, fish-breeding ponds, live-stock farms and reservoirs and the area of land actively used for economic purposes merely made up 290 km2 or 26.5% of the total area of Hong Kong as of 1996.

‘Illegal’ Immigration from Mainland China and Regulation of the Local Labour Market

In the neoclassical theoretical framework, labour is one of the economic factors supposed to have right of laissez-faire mobility in order to maximise revenue. Labour makes attempts to migrate from lower-income to higher-income regions in search of higher wages, much as multinational corporations and speculative financial capital seek regions with cheaper labour or lower tax rates. The ‘global convergence’ tenet, originally put forward by neoclassical economists, is substantiated only through the laissez-faire approach to the spatial mobility of capital and labour, and, in particular, to the acceptance on the part of the capitalist class of the unrestricted spatial migration of labour from lower- to higher-wage territories and countries. This is the prerequisite for the posited global convergence.

Capital Accumulation, Ethnicity and Production of Space in the Squatter Problem

As has been discussed earlier in this book, existence of the colonial administration relied upon the extraction of wealth from pristine space. Here lay a hidden contradiction: to extract wealth from the Crown lands, it would be necessary to foster the macro-economy of Hong Kong through more competitive industrial production, which necessitated space more affordably available to industry and people, whereas this policy imperative functioned as an impediment to extracting wealth from pristine spaces. The solution to this dialectic resulted in massive public works projects in spite of the official claim of ‘laissez-faire’, including squatter clearance, construction of public housing and industrial districts as well as the Mass Transit Railway. This book deals with these typical public works projects waged by the colonial government in Chaps. 4– 6.