There Is Always A Cost

Day 915, 23:09 • Published in Japan Japan • by Sophia Forrester

It has become a cliche, that "nothing in life is free." There is a cost to anything, the saying goes, and if you appear to be getting a free lunch, you are probably being hoodwinked. Like many sayings, there is both wisdom to be gleaned from it and foolishness that can arise from taking it too far. However, looking at the results of this war, it seems particularly apt. Perhaps now more than ever before in eJapan's history, we are witnessing the law of unintended consequences.

The most obvious of these is inflation. In order to finance the war, the Imperial Diet, with scarcely no dissenting voices, has printed thirty thousand new Yen. The entire cost of war has been paid by the printing press, with newly minted Yen as well as Gold derived from putting these Yen into circulation. The Finance Ministry has also taken it on itself to sell Yen at a price lower than that authorized by Congress, adapting on its own initiative to its own created devaluation.

There is nothing inherently right about any value for a currency. One is as good as another, as far as most issues are concerned. A free market depends on the value of currency, and currency gains value from its scarcity. Devaluation destroys the value of the savings of our citizenry, both business owners and ordinary citizens. Companies must continually raise their prices and wages or else find that the value of those prices, and wages, has fallen while they slept. In moderation this need not be a bad thing. But for the Yen to lose a tenth of its value in less than a week is not moderation. Neither was this planned. In fact, the one Member of the Diet to suggest that this might happen was shouted down on the Diet floor.

Devaluation is almost always a one-way street. Unless future Diets are willing to throw caution to the winds again and devalue the Yen even further, they will not be able to reap the windfalls of this past month, nor the more moderate gains of the several months before since the Dokomo administration first began printing Yen faster than the economy grew. Previous administrations had kept the Yen stable at .033 Gold per JPY. President Dokomo used a vote of the Congress to justify taking it lower. Yet this recent devaluation was merely a vote to print and spend money, with no thought of the consequences Without the Diet's authorization, the Finance Minster has also begun to sell Yen for the new reduced rate. With the flood of Yen to companies both foreign and domestic, the economy would have to grow quite a bit before the value ever began rising again.

This is only the most tangible hidden cost of the war. It has cost us the goodwill of South Korea, once one of our closest friends. It has cost us the respect of foreign nations who had formerly seen Japan as a force standing against aggression. It has cost us our confidence in our own rectitude and, if foreigners seize a pretext to invade, it might very well cost us our freedom.

The times ahead may be stormy, and this storm was of our own making. Still, I retain hope for my country. If we realize integrity once again, we may reclaim our honor.


UPDATE: As I write this, we have just lost the region of Gyeonggi-do, site of Seoul, capital of South Korea. Although our government had invested huge sums in Seoul's defense, including a Q5 hospital purchased with printed Yen, we were unable to hold onto it. The victory of course is a pyrrhic one for South Korea, as they too had lost their only Q5 hospital when Gyeonngi-do was originally taken. How much more blood and treasure must we lose?