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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Andy Burnham's full speech on attack: "Manchester is waking up to the most difficult of dawns"

"We are grieving today, but we are strong."

Following Monday night's terror attack on an Ariana Grande concert at the Manchester Arena, newly elected mayor of the city Andy Burnham, gave a speech outside Manchester Town Hall on Tuesday morning, the full text of which is below: 

After our darkest of nights, Manchester is today waking up to the most difficult of dawns. 

It’s hard to believe what has happened here in the last few hours and to put into words the shock, anger and hurt that we feel today.

These were children, young people and their families that those responsible chose to terrorise and kill.

This was an evil act. Our first thoughts are with the families of those killed and injured. And we will do whatever we can to support them.

We are grieving today, but we are strong. Today it will be business as usual as far as possible in our great city.

I want to thank the hundreds of police, fire and ambulance staff who worked throughout the night in the most difficult circumstances imaginable.

We have had messages of support from cities around the country and across the world, and we want to thank them for that.

But lastly I wanted to thank the people of Manchester. Even in the minute after the attack, they opened their doors to strangers and drove them away from danger.

They gave the best possible immediate response to those who seek to divide us and it will be that spirit of Manchester that will prevail and hold us together.

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