Financialization of the Everyday in Japan?

Since the late 1990s, many scholars have studied the shift from industrial to finance capitalism by looking at the Post-Fordist growth regime in which the Keynesian compromise had given way to a finance-led economy (e.g. Van der Zwan, 2014). The postwar social accord with its strong ties between wages and demand (mass production/ mass consumption) had been replaced by households’ debt-driven consumption in a context of real wages stagnation and narrower risk protection (Hacker, 2005). This shift followed the democratization of financial market by incorporating low-income and middle-class households who rely more on financial market for their needs. Although the finance-led capitalism seems to be specific to the US capitalism’s structure, scholars have used the concept of financialization to study others advanced economies to better understand capitalism, as well as state-market relationship. For example, studies of Japan capitalism and its financial system have mainly focused on corporate finance and governance (e.g. Hoshi & Kashyap, 2004). In comparison, financialization of the everyday has been far less investigated. However, Japan consumer finance experienced several structural changes since the 1980s which analysis may bring insights in the study of Japan capitalism history and its institutional changes.

First, following the internationalization of the Japanese financial market and the rising competition form capital market, banks and private financial institutions started to develop ‘popular finance’ by incorporating low-income and middle-class households on the financial market by providing consumer credit and home mortgage. Second, in 1991 the burst of the speculative housing and financial bubble was followed by a long period of economic crisis, deflation, income’s stagnation, and the banking crisis (1998) caused a liquidity constraint for SMEs and households. During the 1990s, consumer finance companies profit making significantly increased on the high-interest non-secure loan market targeting risky borrowers. Although illicit practices, frauds and scandals characterized this market, consumer finance companies’ funds came largely from banks and insurance companies questioning the morality of the system.  In the late 1990’s the rapid increase of Japanese households’ over indebtedness in a context of wages and consumption’s stagnation reflected the limit of the postwar capital/labor compromise and raises question about the nature of its intuitional change. For example policymakers have failed to adapt welfare programs to cover new risks whereas many employers scaled back their efforts as private sector welfare providers (e.g. Estevez-Abe, 2008). Our survey aims at investigating these points to determine if the concept of financialization of the everyday can be used to analyze structural changes on Japan consumer finance market as well as factors of household’s debt increase in a context of economic stagnation.