Letter from The Cape Episode 13 August 11, 2023 Hello, and welcome to another episode in my Letter from The Cape podcast series, where I discuss the social and economic matters from the perspective of Modern Monetary Theory. Today I am talking about the way in which cultural biases combined with a bias towards seeing things, if only tacitly, through the lens of mainstream economics and neoliberalism, pervert our understandings of things we observe. I am soon off to work at Kyoto University in Japan for another year and I will be there again for several months. When I am there I live in a regular suburb near the University and interact on a daily basis with the locals in the street and at the local shops. In doing that, I begin to learn the metre and customs of the neighbourhood and, in turn, the society, in a way that tourists who come into a city and haunt the large tourist areas never do. It also motivates me to seek an understanding of the observations made while navigating daily life, especially where practises appear different to those common in my country of origin - Australia in this case. And I have learned that the things I see can only be fully understood by using a sort of inner logic - that is, by trying to put oneself in the local shoes, applying history, custom etc - rather than interpreting phenomena that I see by using the logic that I might apply in Australia. I read a story in an Australian newspaper last week, which was written by the travel expert, which carried the title '10 things we’ll never understand about Japan'. It caught my attention because I am always trying to gain deeper understandings of matters Japan. Two of the mysterious 'things' about Japan the travel writer mentioned were: (1) Over-servicing and (2) Pointless traffic controllers. The first claimed that the Japanese were "surprisingly inefficient" because when you enter a large shop in Japan there are always several uniformed people standing ready to greet and welcome you. The journo wondered "how they can afford it". The second mystery related to the people you see in mostly blue uniforms with a flashing baton who pop up at road crossings and outside shopping centres. Their function is to direct traffic or pedestrians safely. The journalist rather arrogantly said they are there "just in case you’re wondering what the zebra stripes are for." Viewed from a neoliberal English-speaking perspective, I can see why this journalist is confused and harshly judgemental, even though as a 'travel writer' one should expect them to see things in a more culturally-appropriate way. We are conditioned in Australia to think of productivity - which is the quantity of output produced per unit of input - in very narrow ways. A 'productive' activity is one we think minimises inputs to get a desired output, which means it minimises 'private' costs. Note the private here. A productive worker is in this perspective one that maximises private profits for a capitalist enterprise. Here were are only counting 'private' costs and benefits. And this restrictive view permeates what we define as 'efficiency'. Which, in turn, biases us against a range of activities that we dismiss as being unproductive or wasteful. Which is why we are biased towards dismissing public sector job creation programs as 'make work' schemes, 'painting rocks' and other perjorative descriptions. I will talk more about those programs in another episode. But if we really want to see the essence of things before us we have to take a broader perspective on what is productive. A factory that is considered highly productive in the narrow mainstream sense might be spewing out dangerous effluent into the water table which is not 'costed' in their pricing. The difference between private and social matters. And, for a private capitalist firm that only considers its own bottom line, the traffic controllers in Japan who direct people across zebra crossings or wave through cyclists across the front of shopping centre car parks, are wasteful and unnecessary. But from the perspective of society we would not draw that conclusion. These workers are employed. They are earning an income. They can risk manage the lives of their families. They are remaining connected to the community. They feel a sense of self-worth - contributing to the connectedness of their neighbourhoods. They sometimes exchange pleasantries and jokes which lighten the day and add warmth to the personal experience. They are valuable contributors to society. These elements are what I consider to be vital components to a measure of productivity - a social concept. Last year, I was talking to a 'boss' of a firm in Kyoto and he told me that Japanese employers hate sacking people and will do everything they can to avoid that outcome. While Japan has infused many Western practices, particularly American traits, it remains a very inclusive and solidaristic society. It places a value on people being in employment and keeps unemployment very low. Its manufacturing sector is very productive in the narrow way we tend to think of it - and Japanese engineers have defined best-practice in many areas of industry. Its service sector is very 'unproductive' in that narrow sense, but plays a crucial role in binding society together and ensuring workers have jobs and incomes and can avoid poverty. That role makes these workers who greet the shoppers at the door or the wand wavers at the car park highly productive from a societal perspective. I will be back next time. Until then, see ya later and take care.