Eisuke Sakakibara

Eisuke Sakakibara (born March 27, 1941) is a Japanese economist, Professor at Keio University, and former Vice Minister of Finance for International Affairs, who was known as "Mr Yen".

The End of Market Fundamentalism (1999)

 * It was in 1926 that John Maynard Keynes wrote his now famous essay "The End of Laissez-Faire." Since then, history has evolved through the Great Depression, "hot" and cold wars, the establishment of the Bretton woods regime, suspension of convertibility of the US dollar into gold, oil shocks, and the information and telecommunications revolution. The situation at the end of the 20th century seems to be quite similar to that of the late 1920s, having come full circle.


 * At the center of market fundamentalism lies the general acceptance of the Walrasian general equilibrium model, or the neo-classical paradigm. Although many economists came to doubt the universal validity of such models in view of economies of scope, bounded rationality, asymmetric information, and other types of market imperfections and ventured into institutional analysis, the orthodoxy still remains the one which postulate some type of rationality of atomized individuals and the market which mediate among these atomized individuals and firms to reach some stable equilibrium.


 * As was rightly pointed out by Karl Polanyi in the 1940s, the 19th century laissez-faire regime can be thought of as one in which society is forced to conform to the needs of the market mechanism. "Instead of the economy being embedded in social relations, social relations are embedded in the economic system" in this laissez-faire regime. However, it was precisely because of this that the system gradually disintegrated from the early 20th century into economic and social chaos. "Since society was made to conform to the needs of the market mechanism, imperfections in the functioning of that mechanism created cumulative strains on the body social."


 * What I aspire to in the 21st century is a global world system that inter-connects each region and country with their unique culture and socioeconomic regime. Globalization thriving amidst diversity is my vision for the next century, and I strongly believe this co-existence of diverse civilizations with global networking will create a much better world than the unilateral imposition of monolithic ideologies, such as market fundamentalism.