The Financial Principles of Heiwu Xing Xuan

1937 In February, Hirota's cabinet was replaced by Hayashi Shiro's cabinet, Toyota Jiecheng became the minister of Tibet, and Wu He was promoted to the second official. At that time, people were very worried about inflation caused by the military's control over finance. According to his long-term experience, Hoya believes that although in Japan at that time, bureaucrats had neither the ability to control the economy nor the people had the endurance to control the economy. However, as long as the military departments want to continue to adhere to the huge military budget, they have to take the road of controlling the economy to protect the Japanese economy from shocks. To this end, he first formulated three principles for implementing a controlled economic plan: first, it is suitable for the supply and demand of materials; Second, it is suitable for the balance of payments; The third is to adapt to the expansion of production. These three principles were later called "Three Principles of Finance and Economics in He Yu".

Let's read Wu He's three principles of finance and economy carefully, and then we can understand why Wu He Xing Xuan was promoted and reused in the Ministry of Finance. Kawatani put forward the principle of "the relationship between supply and demand of materials is appropriate" because Japan's material structure includes self-produced materials and imported materials, which not only maintains the minimum national life, but also enriches its armaments to the maximum, and its material demand is huge, especially the demand for production materials and minerals that Japan lacks. In view of this, it is very important to define the demand limit within the possible scope and limit it. By taking this measure, we will try our best to achieve a reasonable proportion of material distribution. As far as the most important distribution result is concerned, its goal is to make its total amount not exceed the maximum limit of import and domestic production. This principle is undoubtedly a step forward compared with simply restraining aggregate demand as an inflation countermeasure. Regarding the principle of "matching with the balance of payments", Kawaguchi believes that we should first define the import capacity, then consider it within the scope allowed by the quota, determine the distribution ratio scheme of import quota according to the importance of various material needs, and master the import licensing system accordingly. As for the specific methods to expand productivity, Yaya believes that there are two major problems in this regard, one is what kind of productivity to expand, and the other is the technology, labor and materials needed to expand productivity. How to make the most effective use of a country's economic capacity and prevent its defects is the fundamental goal of economic policy.

However, the "three principles of finance and economics" is Japan's first attempt, and many factors in Japan are likely to hinder the implementation of this plan, so he has no idea. In his view, Japan at that time had two fatal weaknesses. First, Japan does not have enough ability to formulate a comprehensive and specific plan; Second, the departmentalism of various departments in the country is very serious. In particular, both the army and the navy want a bigger piece of cake, so the internal struggle is very fierce. Because of this selfish departmentalism, it may face many difficulties only in the stage of scheme formulation; To say the least, even if it is made reluctantly, it can't be implemented well. Therefore, the "three principles" have only been formulated, and it remains to be seen whether they can be implemented and carried out to the end.