Economy Japan’s use of “digital peasant” GAFAM contributes to yen depreciation

(Omitted)

■ “Domestic physical labor” vs. “Overseas intellectual labor”

I suspect that the provision of digital services, such as cloud services and internet advertising, is an area where many Japanese people vaguely feel that “Japan is lagging behind other countries (especially the United States).”。The vague image is visualized in numbers in the form of the deficit in the balance on other services, or the “deficit in the new era,” which, in the Bank of Japan’s classification, would be the digital-related balance.。In this light, the deficit in the balance of payments for other services goes beyond the issue of foreign exchange supply and demand and can be seen as a warning about the challenges that the Japanese economy is currently facing and will continue to face in the future.。In that sense, I don’t think it’s an exaggeration to say that we’re in a “new era of deficits.”。Given the current situation, the foreign currency that Japan has been earning from inbound tourism (travel surplus) while enduring labor shortages and rising prices is disappearing into payments for digital services provided by foreign companies that have become part of everyday life (≒ other services deficit ≒ new era deficit ≒ digital-related deficit).。If we look at this situation objectively, we can also see that the foreign currency earned in the “labor-intensive industry” of tourism is being used to pay for “capital-intensive industries” in which soft competitiveness is emphasized.。To put it more simply, this could be said to be a situation in which foreign currency earned by “domestic manual labor” is paid to “overseas intellectual labor.”。I should make it clear that I am not saying that the act of “earning foreign currency through physical labor” is a problem.。The problem is that Japan today no longer has an abundant labor force large enough to carry out frontal physical labor.。No matter how much inbound demand there is, if there is a limit to inbound supply, the travel surplus will eventually reach a ceiling.。On the other hand, the “new era of deficits” symbolized by digital services are expected to continue to see price hikes.。If the amount of foreign currency received from “domestic physical labor” has reached a plateau, while the amount of foreign currency paid to “overseas intellectual labor” is on the rise, won’t the balance be balanced by the exchange rate (in short, a weaker yen)?。■ “New era deficit” is a world of asking prices
Digital services of overseas origin, which symbolize the “new era deficit,” have become like infrastructure embedded in economic activity, and are similar in nature to the import of natural resources.。Therefore, even if prices are gradually raised in the future, it is expected that in the future, we will basically have no choice but to accept the “asking price” of foreign companies.。There are many similar examples, but for example, the increase in the membership fee for Amazon Japan’s paid membership service “Prime” announced on August 10, 2023 was widely reported.。Because the company’s services are so diverse, it is unclear where its sales fall in the balance of payments statistics. For example, video and music distribution services provided to paid members are defined as “fees for the use of intellectual property rights, etc.” in the balance of other services, and more strictly speaking, as fees for the use of copyrights, etc., which is a component of that.。In recent years, Japan has been seeing its deficit growing, which is suppressing the growth of its surplus from “intellectual property rights royalties.”。However, just because the annual fee for Amazon Prime membership has increased from 4,900 yen to 5,900 yen and the monthly fee from 500 yen to 600 yen, there probably aren’t many people who have canceled their Prime membership for that reason (I’m one of them).。Consumers who use Prime services are likely to have made it an established part of their lives, and since there are no alternative services, many of them may be accepting the price hike with a feeling that it “can’t be helped.”。(Omitted)
The Nihon Keizai Shimbun expressed concern about the current situation in Japan and described it as “digital tenant farmers,” which seems like a good description.。A tenant farmer is a farmer who rents farmland from a landowner and grows crops on it.。The situation of conducting economic activities on platform services provided by U.S. companies and being charged rent certainly reminds one of tenant farmers.。The rent for that location corresponds to the “deficit of the new era” that the author is concerned about.。Of course, a more rigorous discussion would require analyzing the effects (benefits) of digital services and comparing them with the side effects (costs) of the “new era deficit.”。I would like to leave this point to the analysis of other scholars.。However, when it comes to the issue of foreign exchange supply and demand, as long as you are a tenant farmer, you will continue to have to pay foreign currency to your landlord (symbolically, GAFAM), and this in itself supports a weaker yen.。2024.7.18
★1: 2024/07/23(Tue) 23:59:30.77

【経済】日本は「デジタル小作人」　GAFAMの利用が円安要因に [樽悶★]

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日本は「デジタル小作人」　GAFAMの利用が円安要因に

「国内の肉体労働」から受け取る外貨は頭打ちで、「海外の頭脳労働」に支払う外貨は増加傾向なのだとすれば、その帳尻は為替（端的には円安）で合わせることにならないだろうか。『弱い円の正体　仮面の黒字国・日本』から抜粋。

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