The Unquestioned March of Privatization and Its Doubts

After much debate, postal privatization was implemented this October. Yet, the trend of "privatization first, ask questions later" continues unabated.

The essence of promoting privatization lies in aiming for management that efficiently moves people, goods, and money. It's about breaking free from the bureaucratic dependency of "the government is always right" and offering more attentive service. This naturally demands management focused on thorough efficiency and results. Consequently, unprofitable areas will be cut. The reason for the prolonged and varied opinions surrounding postal privatization, making it difficult to reach a conclusion, was the existence of substantial background and reasoning.

In America, not only airports but even prisons are flourishing with privatization. Japan recently saw its first privately-run prison, which became a major topic. Whether in America or Japan, I believe many people question the idea that "privatization is best." We need to have a serious discussion anew about the roles of government and private enterprise.

The "Night-Watchman State" in Economics

As one systematically studies economics, the concept of the "night-watchman state" emerges.

Adam Smith (1723-1790), considered the father of economics, argued in his timeless masterpiece "The Wealth of Nations" (published 1776) that the state's role should be limited to functions such as national defense, justice, and education, with all other matters left to the private sector.

This theory was later thoroughly criticized by the British economist John Maynard Keynes (1883-1946). Keynes rejected laissez-faire economics and developed a school of thought that emphasized "government intervention," where the state actively uses fiscal spending to overcome unemployment and recession, greatly influencing many countries.
Post-war Japanese economic policy was based on Keynesian economics. This influence remains strong today.

Ferdinand Lassalle (1825-1864), a leader of the National Socialist movement in Germany, notably criticized Adam Smith's "The Wealth of Nations" by coining the term "cheap government" or "night-watchman state." In other words, he argued that a "cheap government" merely acts as a night watchman, whose sole duty is to prevent robbery and theft, thereby allowing the law of the jungle to prevail.

Modern capitalist nations adopt a mixed economy system, with both public and private sectors coexisting. What's crucial is to understand that the public sector has its role and the private sector has its role, and to cooperate and share insights to ensure our lives are secure.

The "Public" Should Protect Investors—A Securities Professional's True Feelings

There's something else worth mentioning. It has come to light that major life and non-life insurance companies have been frequently failing to pay out claims, causing significant trouble for policyholders.

The "wrongdoing" is clearly etched in our memories. Most people likely thought, "How could reputable insurance companies, built on trust, do such a thing?" The insurance companies have published apologies in newspapers and are showing great deference. This is one example that came to light due to the intervention of the supervisory authority (the Financial Services Agency).

The Financial Services Agency is now working to normalize real estate transactions and protect investors. This is another example: there's also a move to prevent fraud in "real estate funds" through government oversight. Real estate funds are a new type of financial product where money collected from investors is used to purchase real estate, and rental income or sale profits are distributed. Their scale has reached 14 trillion yen.

It is only natural for the government to use its legal authority to prevent actions that disrupt public life. The government has its role. The government should always work from the perspective of the citizens.

A high-ranking executive at a major securities firm, an acquaintance of mine, once confided his true feelings to me.
"We get so many complaints from the government side, it's exhausting."
After a slight pause,
"Although, without the supervisory authorities, who knows what securities firms and banks might get up to..."
I still vividly recall him saying this with a hint of self-deprecation.