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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What did Jeremy Corbyn really say about Bin Laden?

He's been critiqued for calling Bin Laden's death a "tragedy". But what did Jeremy Corbyn really say?

Jeremy Corbyn is under fire for describing Bin Laden’s death as a “tragedy” in the Sun, but what did the Labour leadership frontrunner really say?

In remarks made to Press TV, the state-backed Iranian broadcaster, the Islington North MP said:

“This was an assassination attempt, and is yet another tragedy, upon a tragedy, upon a tragedy. The World Trade Center was a tragedy, the attack on Afghanistan was a tragedy, the war in Iraq was a tragedy. Tens of thousands of people have died.”

He also added that it was his preference that Osama Bin Laden be put on trial, a view shared by, among other people, Barack Obama and Boris Johnson.

Although Andy Burnham, one of Corbyn’s rivals for the leadership, will later today claim that “there is everything to play for” in the contest, with “tens of thousands still to vote”, the row is unlikely to harm Corbyn’s chances of becoming Labour leader. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.