Japan "nationalises" industrial stock

State capitalism, or unconventional fiscal policy?

The latest in the annals of unconventional economic measures, by Ambrose Evans-Pritchard in the Telegraph:

Japan's government is to take the unprecedented step of buying factories and machinery directly with taxpayer funds, the latest in a series of radical steps to lift the country out of its deep slump.

Premier Shinzo Abe is to spend up to one trillion yen (£7.1bn) buying plant in the electronics, equipment, and carbon fibre industries to force the pace of investment, according to Nikkei news.

This move comes after Abe was elected on a platform of forcing the Bank of Japan to do more monetary easing. That plan was partially an attempt to influence monetary policy – already a bold reversal of the traditional political neutrality of central banks – and partially an attempt to secure further income for the state to use in fiscal expansion.

Some of that expansion has now taken place in the pseudo-nationalisation of industrial assets. The idea is that Japan hasn't just suffered from a paucity of public investment, but also of private investment. By buying up high-quality capital goods (factories, machinery and so on), the Japanese government hopes to be able to provide that private investment directly. It would then lease the new assets back to troubled firms, allowing them all the benefits of investment with none of the downsides.

Ideally, what happens next is companies with new plants experience a boost in productivity, which leads to a boost in Japanese nominal GDP.

Of course, it will be hard to distinguish between that boost, and the similar boost which comes from the fact that this is, at least in part, state aid to industry.

Shinzo Abe. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Owen Smith apologises for pledge to "smash" Theresa May "back on her heels"

The Labour leader challenger has retracted his comments. 

Labour leader challenger Owen Smith has apologised for pledging to "smash" Theresa May "back on her heels", a day after vigorously defending his comments.

During a speech at a campaign event on Wednesday, Smith had declared of the prime minister, known for wearing kitten heels:

"I'll be honest with you, it pained me that we didn’t have the strength and the power and the vitality to smash her back on her heels and argue that these our values, these are our people, this is our language that they are seeking to steal.”

When pressed about his use of language, Smith told journalists he was using "robust rhetoric" and added: "I absolutely stand by those comments."

But on Thursday, a spokesman for the campaign said Smith regretted his choice of words: "It was off script and on reflection it was an inappropriate choice of phrase and he apologises for using it."

Since the murder of the MP Jo Cox in June, there has been attempt by some in politics to tone down the use of violent metaphors and imagery. 

Others though, have stuck with it - despite Jeremy Corbyn's call for a "kinder, gentler politics" his shadow Chancellor, John McDonnell, described rebel MPs as a "lynch mob without the rope"

Smith's language has come under scrutiny before. In 2010, when writing about the Tory/Lib-Dem coalition, he asked: "Surely, the Liberal will file for divorce as soon as the bruises start to show through the make-up?"

After an outcry over the domestic violence metaphor, Smith edited the piece.