The conditions for comparative advantage always change, but the conditions for urbanization do not change easily and are always one-way. In recent years, refugees have been rushing to Europe in search of security. This mechanism is no different from urbanization.
Like the low and high pressure in the weather map, there is unevenness in areas with a thriving economy due to prices, wages, and location. It is the cause of urbanization and the main cause of the refugee problem that comes from fleeing poverty and conflict. Urbanization leads to rapid population growth and unemployment in urban areas. If these problems are left unchecked, people who are disappointed in the future will become desperate and will be more likely to turn to terrorism and crime. The so-called soft target is targeted and becomes a victim. Amplified feelings of discrimination lead to hate crimes. Many of the incidents we see on a daily basis can be attributed to poverty and discrimination.
Rural stability is essential to the solution of these problems, and the formulation and implementation of economic policies must proceed immediately. In Sweden and Russia, they have villas in the suburbs and farm on weekends and holidays. In Russia, it helped during a period of economic turmoil. In Japan, central core cities are being developed to combat depopulation.
Some Scandinavian countries, such as Sweden, have villas called summer houses. During the turmoil in Russia after the collapse of the Soviet Union, urban Russians kept body and soul together by growing crops in villas called dacha, which they owned. In Japan, there is a project to support the formation of a network of communities in depopulated areas, mainly in regional cities, to counter depopulation.
Support for establishing an agricultural corporation is necessary. But will the problem be solved by denying small businesses and making them large? Isn't it an act that goes against the opening of land and the dismantling of conglomerates by GHQ after the war? Similarly, in Japan, after the Large-Scale Retail Store Location Law, shopping streets nationwide have become shutter shopping streets, and major distributors dominate the goods that reach the final consumers. Recently, they have advanced to home appliance development. Even if you bully the agricultural cooperative, the problem does not change. Only monopolies and oligopolistic companies are born in agriculture. Today, when online shopping is becoming more widespread, the oligopoly of the distribution industry is collapsing. The use of stable coins is also good. It is important to foster agricultural corporations that are actively expanding into retail and distribution as well as commercialization by utilizing the Internet.
Many of the samurai who lost their jobs in the Meiji era engaged in clearing and returned to farming. Self-sufficiency saved him from poverty. In addition, workers and part-time farmers who migrated from rural areas to urban areas supported the postwar period of high economic miracle. It can be said that they were the ones who supported the consumption by the domestic demand-led economy as the yen strengthened and the dollar weakened. Agricultural efficiency enables large-scale ownership just like before the liberation of farmland by GHQ, but it is not all good. Part-time farmers supplement their income with their own consumption, so they consume stably. You should take advantage of it. For example, as a measure against unemployment, the government buys and distributes abandoned cultivated land to those who have undergone agricultural training in urban areas. This is also a measure against depopulation.
In any case, what is important in a domestic demand-driven economy is consumption. The investment is an expenditure on the future, and if it fails, it will be overcapacity. Under the conventional Keynesian policy, only roads and public facilities are built as public works, and only the builders are enriched. If the above policies are implemented, there will be more consumers who can afford to live, which will have a significant effect on the economy. The important thing is not to keep large corporations dependent on government spending, but to improve the lives of the people, and once their lives are stabilized, consumption will expand beyond the necessities of life.
Environmental tariffs are being implemented in Europe as “border carbon taxes.” As seen in the rise of President Trump, the head of state, who does not feel guilty even if the environment deteriorates, has become elected. Global warming has led to a series of natural disasters and can no longer wait for multilateral agreements. Forest fires occurred frequently around the world in 2019. A huge typhoon struck Japan. Countries around the world should reassess their environmental tariffs.
But when you impose tariffs, retaliatory tariffs await you. Then, the tariff rate should be changed for each company, not for each country. If a taxation system based on the above-mentioned certification system is concluded as an economic agreement, companies certified as environmentally friendly will benefit at the tax rate. Some developing countries have poor working conditions. Manufacturing dominance is determined by prices and wages, but they force low wages and long working hours. An economic agreement based on unified standards in the world is necessary to correct them. This will be an incentive to correct the external diseconomy of labor. If you make good use of the market principles of the international economy, it will definitely be effective. The economic agreement should also include tax incentives for institutional investors under Socially responsible investing (SRI) and Environmental, Social, and Corporate Governance (ESG). Each country should conclude an agreement that reflects Principles for Responsible Investment (PRI) in the corporate tax rate. This economic agreement will surely help to achieve the UN SDGs.
As of 2019, refugees are rushing to Europe, fleeing civil war and terrorism in the Middle East and Africa. It is no longer acceptable in Europe. Refugee acceptance must be shared among countries around the world. Far-right political parties are emerging in European countries. The influx of refugees is considered to rob Europeans of their jobs. Japan, in particular, should take the lead in accepting refugees to prevent such political instability.