(1)The Essence of Private Gain is Social Justice

The proposition that 'as companies are motivated by profit, they should not be given responsibility for undertakings in the public interest' is spurious. As every private enterprise operator knows, if expenses are cut in order to turn a profit and the result is the supply of poor quality goods to the consumer, the well-developed mass media and compliance requirements of today mean the enterprise will face immediate bankruptcy. The business would not survive a year. Honest operators know the pain of a business going into the red and being pressed for finance: if there is a hell on earth then that is it. Those who have never experienced that hell jump to the conclusion that 'business operators pay no heed to complaints and do as they please. The scoundrels take the profits for themselves and cannibalise their companies.' This view undergirds theories on the evils of private enterprise. Ultimately, the very essence of private enterprise is that the only way to succeed is to satisfy the public in the marketplace with the development and supply of the absolute best in goods and services. If this is understood the concept of lining one's own pockets with profits is hardly relevant. In other words, in today's society, the pursuit of profit is motivated by the realisation of justice.

(2) The Ambiguous Concept that the Public Interest is 'the Fulfilment of Social Responsibility'

(a) Defining the Public Interest

Article 34 of the Civil Code regulates 'religious ceremonial, religious, charitable, scientific, arts and crafts and other corporations and foundations related to the public interest'. Firstly the use of 'and other' means that the previously listed 'religious ceremonies, religion, charity, science, arts and crafts' are undertakings in the public interest. Secondly, it indicates acceptance of the fact that undertakings separate to and independent of the kinds listed but still in the public interest do exist, giving them the same status under the Civil Code as those listed and recognising their 'public interest nature'. It then falls to defining the 'public interest'. Dr Sakae Wagatsuma defines the public interest as 'the interests of society in general, in other words the interests of an unspecified number of people' (p. 136, Minpo Kogi 1, [Lectures on the Civil Code 1]).

(b) Defining 'Undertakings in the Interest of Society in General'

The issue is how to define 'undertakings in the interest of society in general' today. Almost all enterprises, in particular large enterprises that provide goods and services contributing to an abundant consumer lifestyle, fulfil this description. For the consumer, the crucial question is whether the goods and services he or she uses are useful. Whether an enterprise happens to have a surplus and distributes it to its risk-bearing investors is irrelevant. From the consumer's perspective if one has to buy harmful, inconvenient goods and services, even from a public-interest corporation, they would not qualify as being 'in the public interest'. In the Japanese state, where the people are sovereign, it is the consumers, the people themselves, who decide if something is or is not 'in the interests of society in general'. No matter to what degree the people's political will is formed, the opinion of the current Japanese populace is the final arbiter. Deny this and the foundations of contemporary values will crumble.

(c) A Contemporary Definition for 'the Public Interest'

There is no contemporary business that intentionally commits illegal acts. There is no inconsistency between this statement and the fact that illegal acts do happen to occur. Even a state occasionally commits illegal acts; the law anticipates such instances in the form of the State Redress Law. Private enterprises are no exception and the Civil Code and numerous other laws provide for civil liability.

Considered in this light 'the public interest' has to refer to undertakings that provide things that please the people, in other words, things that sell well or goods and services supported by much of the populace.

From this perspective it is meaningless to divide undertakings currently underway in Japan into public interest and private gain undertakings using a fact-based or connotative definition. It is more than meaningless: it is harmful. The question of whether a statutory corporation, a public-interest corporation or a company limited by shares carries on the undertaking is no more than a detail. It may be that at the time of founding the public-interest corporation was the vehicle for which it was easiest to obtain government consent, although the content of the undertaking is not in the public interest. It only means that someone with influence was able to gain consent from the particular agency concerned with ease. To illustrate, although 'science, the arts and crafts' are specified as being undertakings in the public interest in Article 34 of the Civil Code, there are countless companies undertaking projects related to science, the arts and crafts and naturally countless incorporated educational institutions doing the same. Obviously there are no differences in the content of their undertakings. The crucial thing is the consumer's perspective on which has greater relative worth and the consumer's ability to choose that option. This is the theory of a freely competitive market.

What is 'the government'? This also is an ambiguous concept. In Japan the government is comprised of the legislature, the administration and the judiciary. Our current concern is the administration.

(1) The Legal Distinction between the Government and Private Enterprise

The Administrative Law defines 'administration' as 'continuous formative state activity, unified as a whole and carried out in order to concretely and realistically pursue the positive realisation of the aims of the state, within the regulations laid down by law'. (Dr. Jiro Tanaka, Sekkyoku Setsu [Positive Theory]) In contrast the 'private' realm is defined as 'the lifestyle relationship to which the fundamental principles of the freedom to contract and personal autonomy are applied, in other words the relationship where independent persons possessed of free will autonomously enter legal relationships, beginning with making mutual promises and exchanging goods and services'.

(2) The Distinction between the Government and Private Enterprise from the Taxpayer's Perspective

It must be asked why this debate exists in the first place. The financial and administrative reforms now underway are calling the distinction between public and private into question. In other words, the question is whether taxes (in the broad sense of the word) are being paid to the state. Since, as mentioned previously, an undertaking cannot be classified as 'in the public interest' according to its nature, it is simpler to understand if the classification is made according to whether the body carrying out the undertaking pays taxes on the results of the undertaking to the central or local government. There are three kinds of people in popular discourse in Japan: those who chew up taxes, those who make their living from taxes and those who pay taxes. Of course public servants also pay taxes. However, the entirety of the actual salary paid to public servants comes from taxes. A statutory corporation receives subsidies as well as preferential taxation treatment, whilst private enterprise has to pay taxes even though it bears social responsibility and carries out undertakings in the public interest, just as the government does.

At present, public corporations (the four highway corporations and around 59 People's Lifestyle Finance Corporations) do not have to pay corporate income tax. Public-interest corporations (incorporated educational institutions, religious corporations, public-interest corporations under Article 34 of the Civil Code, social welfare corporations and labour unions, numbering around 128 in all) do not have corporate income tax levied on their main undertaking (with the exception of 33 profit-making undertakings). They are also exempt from prefectural and municipal taxes relating to the portion of un-imposed corporate income tax. What is more, they are either exempt from or entitled to numerous special privileges in relation to local taxes such as business tax, fixed property tax and real estate acquisitions tax. The undertakings carried on by these bodies can be and in some cases are, carried out by private enterprise. Private enterprise enriches the nation's coffers with large amounts of tax revenue and does not require subsidies, so that its vitality doubly boosts the national finances.

Whilst Japan is in a period of deflation and recession, our society is also the wealthiest on record. Japan faces numerous problems relating to the environment, morality, the national interest and national defence. However, the people's political consciousness is well matured even in comparison with other nations. It's an obvious proposition in Japan, where 'the people are sovereign', that the 'shape of Japan' these conditions will create can simply be left to the judgment of the people.

It is appropriate that almost all undertakings bar foreign diplomacy, national defence, the maintenance of law and order, disaster prevention and infrastructure development should be carried out by private enterprise in Japan as it aims to become an 'intellectually creative nation'. The situation in the United States of America is close to that level of privatisation. State controls were increased in Japan in order to meet the challenges of the Pacific War, the bureaucracy was further enlarged post-War in order to achieve economic recovery and then the Cold War construct spurred on Japan's socialist industrial organisation. Now is the time to eradicate this structure. It's essential that Japan advances towards being a 21st century state built on intellectual property and environmental readiness. If Japan makes this change, the numbers of 'those who chew up our taxes' and 'those who make their living from taxes' will decline and all of us will become taxpayers. This will mean all the people participating in the formation of the national through the payment of taxes and Japan becoming, for the first time, a state where sovereign taxpayers take responsibility for forming the nation.