 This weekend we talked to Mark Abella, who is perhaps Japan's foremost libertarian and Austrian activist. Mark and I discussed topics like the Bank of Japan's failed 25-year program of monetary stimulus, the resulting creation of hugely insolvent zombie banks, and the impossibility of abenomics. You'll enjoy hearing about Professor Toshio Morata, a Japanese student of Mises in the 1950s, who painstakingly translated human action into Japanese and is still alive today. And you might be surprised by Mark's revelations about the Japanese mindset, culture, and disturbingly high suicide rate. Stay tuned. Ladies and gentlemen, welcome once again to Mises Weekends. I'm your host, Jeff Deist. Very pleased to be joined this weekend by Mark Abella, who comes to us live from Osaka, Japan, although he is ordinarily a resident of Tokyo, Japan, and as a result he is well versed in all things Austrian and libertarian as they apply to Japan in particular. Mark, how are you this weekend? I'm doing very good. Thank you for having me. It's a pleasure to be able to speak with you. Mark, you're originally from Montreal, from French Canada. Tell us a little bit about how you ended up in Japan and how you became a libertarian in Austria. Well, I think traveling is a huge catalyst. I think going around different countries and looking at the way some countries do some things better. Why is this train here working well? Why is this train late? Why is this post office not working correctly? I think traveling helps open up and I think it forces people to look for that one universal equation that works for everybody. It renders nationalism or whatever form of statism extremely difficult to embrace because you need to be able to embrace all these different cultures and be universally adaptable to a lot of different people. I think traveling marked way and others have studied much better English than I have, but I think traveling is a tremendous catalyst for libertarian ideas. Of course, Mises had a Japanese student, Professor Murata, who still lives in Japan. Is that correct? Yes. You're correct. Ludwig von Mises, as he was teaching in New York in late 1950s pretty much, was fortunate enough to enjoy a few scholarships. And there's this Japanese young gentleman named Murata Sensei, as we call him here in Japan, who successfully got one of these scholarships. And he went and studied there and came back to Japan after he completed his year, I believe, between 1959 and 1960. And it was a tremendous time back then. He, I mean, he still talks today. He's still alive, by the way. He's 92, as we speak. He would meet Crosspath with Haslet. He would Crosspath with people like Ayn Rand. He would, the place back then apparently was quite vibrant. And so he came back to Japan and he actually translated human action in a very, very interesting way in that he made sure that every page in the Japanese volume of the first edition, at least it changed since then. But the first edition had every page in the Japanese edition exactly compatible with the content of the English edition. And he made it so that if a Japanese student who was not too good in English had a question on page 372, for example, he would just need to save 372. And the English student would immediately know what page he was talking about, which for languages as different as Japanese and English is a tremendous ordeal. And so he was a huge catalyst, I think, in the 1960s. Having said that, Japan, just like a lot of countries, have had monopolies, very status monopolies in the media. And unfortunately, that has cut a lot of generations. We're not talking in years anymore. I think we're talking in decades, if not in generations, away from sound, from reasoning arguments, from an introduction to the way society works. The education also is unfortunately plagued by tremendous control from the central authorities. And if you don't go through the path of this control, of this status education, it's very difficult to apply for a lot of positions to professionally explore a lot of jobs out there in the market. So they hold a monopoly that has made it very difficult for Japan to have a liberty oriented movement. However, the internet, I assume, just like a lot of places, and I think a lot of people today are extremely indebted to the Mises Institute. I know I'm one. The internet has provided a new, it's a new window opened. It's a new spring of thoughts. And obviously, a lot of young people understand they have to doubt more. A lot of people are searching for ways to make things work and things make sense. So, indeed, the internet is providing a very new wind of change at least in the mentalities. Having said that, the Austrian movement, if you will, is still in a bit of an infancy, if you will. Mark, there is this enduring Western narrative with respect to the so-called lost decade of the 1990s in Japan that basically says the Bank of Japan failed to provide enough monetary stimulus to prevent deflation. Can we get your take on this? Definitely, there's no doubt the yen was brought into existence a long time ago. So it's got more than a few decades. We're talking about 1871 was the date the yen was brought on the market in 1980s. But not only then, but before the yen has been heavily inflated. And 1980s, the rates dropped tremendously after after a meeting that took place in New York called the Plaza Accord for those who wants to look into the detail. But probably the Japanese government brought down the interest rates and flooded the market with liquidity and that fueled bubbles that I think a lot of people in the U.S. are not unfamiliar with because the Nikkei just went through the roof all the way up to 39,000 and land in Japan also appreciated because banks were forcing people to borrow money as the Japanese government was trying to inflate its currency in order to be able to repay a lot of the debts. It was trying to include a lot of currency into a lot of liquidity in the market. And at some point, obviously, these inflated prices, they hit that wall of complete irrational nonsense and they just collapsed. And unfortunately, what they did is what a lot of countries have been doing, especially since the recent debacles in the late 2000s. They've socialized a lot of the losses and they've created what they call zombie banks. And so the taxpayer pretty much has been forced to pay for poor monetary policies in the 1980s. Indeed, in the late 1980s, they tried to bring the rates back up. And I think that is what woke up. That is what actually provoked a lot of bad investments to collapse. But the problem was way before the problem was already in the making for several years. And since 1991, if you will, Japan has not been able to rebuild anything. Actually, we just the recent numbers show that over the last 14 years, Japan has had over 30,000 suicides. The number is tremendous. The social problems are the list is endless. So a lot of couples now, both of them have to work to make a living, not to feed, you know, eight or 12 children. We're talking about enough to feed themselves and maybe at times one child. So 1991, a recession brought on by an over amount of a huge amount of liquidity and a currency way to inflated. 1991, they've socialized the losses. And since then, Japan has unfortunately not recovered. Banks are still zombies. Banks, actually the central bank in Japan today is doing everything it can to inflate the currency and advise everything. It could it could put its hands on starting from government bonds to ETFs to rate to real estate equities. It also I think the balance sheet of the Japanese central bank has to be probably the most interesting thing to study. But unfortunately, it's been two decades of socializing the losses of mistakes, which were obviously generated by the by the central bank in the 1980s, or which were accelerated, if you will, in 1980s. Do the Japanese people see the country's economic problems as having resulted from faulty monetary policy? Well, unfortunately, it's not introduced to them that way. I think over the last recent year or so, there's this new prime minister called Abe and his new strategy, as they call it, Abinomics is obviously print more, more and print more. So it's inflate, inflate and inflate again. And obviously what that does is it's as the central bank creates it adds liquidity to the market. A lot of the stocks actually benefit from that because they buy a lot of commercial paper, they buy stocks, they buy shares. And so it creates the illusion that a lot of prices in society go up. And so a lot of people today look, for example, at the Nikkei average. And a lot of people are fooled into thinking, well, it's obviously going up. So this means that a lot of companies are making greater money. Eventually, some profits, when in fact, the narrative, the true, the reasoning narrative is that obviously it's just an inflationary process that's translating into higher prices on a lot of different locations, starting with the stock market. So unfortunately, if you listen to the TV, the mainstream media, I think the average worker in Japan is ill-informed, ill-educated, to understand, to see that too much printing was the problem. And as a result today, the government, at least Abe Nomics, as they call it, I think people do that in the US as well, Reaganomics and things like that. It allows the governments to keep on printing itself in a way to escape out of the crisis, if you will. Mark, tell us more about Abe Nomics and its supposed three arrows. Well, a lot of people have, unfortunately, a favorable image of what Abe and Abe Nomics is supposed to achieve. Obviously, all three arrows, it goes back to an old Japanese saying, which is that if you only have one arrow, it's a father that teaches his kids three boys or something like that, that if you have one hour, you can break it and he breaks it on his knee. But if you have three of them, they break, they don't break as easily. And it's a very commonest approach to things, if you will. It's the communists stronger than the individual, if you will. So he came up and used that proverb and made it. He called that, his administration called it the three arrows. The first element is to try to target inflation number out of the CPI. But obviously, just like in most countries, the CPI is engineered. So the CPI doesn't mean anything. The equations have been played with. And so they come up with the numbers that they want. The unemployment numbers also are obviously engineered. So they are succeeding, unfortunately, in fooling a lot of people and suggesting and hiding, masking the damages of an overworked, highly socially challenged society by promoting numbers that are completely manufactured. So I would say, unfortunately, if you read the mainstream newspapers or listen to the Japanese TV, a huge amount of Japanese people, I wouldn't try to put a number, but I'm sure it's really high up there. Work extremely hard, have very difficult lives. But when they look and when they listen to the weather, man, they're told that the sky is blue and everything is beautiful. So I think it must be a very confusing time for a lot of them. However, there's a growing internet movement and I hope that soon enough, things will be able to stabilize. Do you think the demographic decline in Japan can be attributed to government policy beyond just the Japanese immigration policy itself? Well, I think more and more, I think if you start from suicide numbers, as I said, we're over 30,000 a year. So that's and that's they've actually topped that number for 14 years. So that's 420,000. That's more than Hiroshima and Nagasaki combined. And and there's not even a war with anybody. So the numbers are are starting to speak for themselves. And I think a lot of people are asking questions. But the way the education is built, I think, unfortunately, very few people are invited to challenge the integrity of the government. And I think a lot of the messages, you know, look at North Korea or, you know, it's the Chinese or the Americans. And so a lot of people are obviously a lot of politicians do this game that a lot of politicians abroad do, which is they try to point in different directions. But I think soon enough, a lot of people will wake up to the fact that the distortions that we're going through socially are nothing but, unfortunately, manmade policies. I think it was Mises, I think in one of his book, who said inflation is not is not something that just shows up. It's a policy. It is a policy. And I think it's destructive results are starting to show up. And I hope people will will look into the numbers soon enough. Mark, from a Western perspective, Japan is a highly homogenous, high trust society and thus seemingly would be ideal for a more libertarian mindset. But from the picture you're painting for us today, it seems like the average Japanese is still mired in a status collectivist mindset. Well, it's interesting because unlike the U.S. or France or Germany with Emmanuel Kant or France with Diderot, Montesquieu and all these Rousseau-Valter or the people in America, the Japanese Industrial Revolution, so the winds of freedom hit the country in the late 19th century. So it's still very fresh in the mind of a lot of people in Japan. This self-reliance, self-respect in a way, the books are still on the shelves. If you look at a lot of the brands that you know, for example, from Japan, Yamaha or Suzuki or Kawasaki or Matsushita, a lot of the brands that you've heard Honda, Toyota are people that were pretty much alive up until 30, 40 years ago, unlike the brands that you have in the U.S. for example, Kajilac or Chevrolet, that these were people from probably a bit further away. And so the winds of the industrial industrial revolution in France and in other places, which we typically assigned to the 18th century in Japan came later. It came as a result of the influence of Japanese people who traveled to Europe and came back with these ideas. So indeed, Japan is still full. It's still riding a bit on the orbit of an industrial revolution, if you will. That was that you still have these this this wave. But unfortunately, the I think the state is has gained tremendous ground. I think in the 1920s, thirties as well, it was a bit of a despotic empire. It was an empire in the making. And a lot of the lies are still to be understood, to be studied. So I would say currently, if we if you want a score, I think the state is still winning. But I think the Internet is hopefully going to be a game changer for a lot of people. Well, it's interesting that you bring up brands. I suppose the once mighty Sony Corporation is almost a metaphor for Japan itself. At this point, it seems to be disappearing. Well, I think you can say that about almost all the brands in Japan. They used to have a really high quality. They used to have a very powerful, private thriving sector with a lot of brands that a lot of people used to enjoy in electronics and in the car industry and cars and TVs. Unfortunately, that is dying away. And unfortunately, I have to say it's really, really difficult. The I think I saw a video that you made recently where obviously the central bank at some point when it takes too much space and it prints too much money and advise a lot of the assets that shouldn't be bought. And it creates so many distortions that it's extremely difficult to make any form of viable private business work properly because the government, the state renders every attempt almost impossible. And so no price actually reflects any form of true demand. No, no, actually, business is actually there because there's a huge pool of customers. Most of the businesses obviously are there because they've succeeded in stealing away money from the government. So a lot of the brands that we, that you and I probably know that we've enjoyed younger cars, Honda, Toyota, Matsushita, Sanyo and all of these brands that actually come from families for most of them of people that were alive up until, you know, 50, 60 years ago are going through extremely difficult times. But all these challenges are not because the private businesses themselves are not doing too well. It's just become impossible to make sense of what the market where the market stands due to the tremendous distortion that the central bank is imposing on society by all the inflation it's creating and all the fake numbers it's producing that's hiding, masking the damages. Marcus, we wrap up this interview. Let me just ask you this. Is there a future for the Liberty Movement in Japan? Well, I think just like everywhere, the Liberty Movement has to go and source a lot of its energy in young generations. I think I'm starting to understand that students have probably to be the the engineers, if you will, of Liberty, if Liberty has to have any form of success in society. And I think we're seeing more and more people study through the Internet. I myself, I have to say I'm unfortunate enough to have you today and to be able to to admit that I have an intellectual debt to the services that you've been providing because it's I mean, you have allowed a lot of people around the globe to relearn and to unlearn. I don't know if these words exist in English. And I think Japan will also is slowly but surely taking this orbit as it's trying to have a new generation of people asking more questions, looking into information that was not made available to them. And I think the future, the last decades, obviously have been plagued by a suggestions government. But I think the upcoming 10, 20 years should be extremely interesting. And I think we will probably live events like the ones we saw probably in the past, revolutions probably of 1776, 1789, or even stuff that was closer to us. If you the Berlin Wall or the Tiananmen, I don't understand exactly everything that happened there. But I think we will in the next 10 to 20 years in Japan see revolutions. And I hope that the Internet will fuel some of them and that things will work out for the better. Mark Abela, thanks so much for your time and for a fascinating interview. Thank you. Ladies and gentlemen, have a great weekend.