Why did the “Large-scale Restructuring of 2001” occur?

The purpose of this paper is to clarify the cause of the “large-scale restructuring of 2001” that Pro. Michio Goto called. Pro. Goto sought the cause of the problem in the disposal of non-performing loans by the Koizumi Cabinet, which was established in the same year, and the dismantling policy of long-term employment practices announced by Keidanren in the same year. But these are not the real cause. The real cause is the introduction of a series of “international accounting standards” aimed at disclosing information to investors. Large-scale reductions in regular employment were implemented during the period when a series of international accounting standards were introduced in quick succession. International accounting standards are “consolidated financial statements,” “consolidated cash flow accounting,” “publication of pension accounting,” “market value of financial assets,” “market value of cross-shareholdings,” and “consolidated tax payment system”. With the introduction of consolidated financial statements, it has become impossible to streamline the head office organization by transferring middle-aged and senior workers to subsidiaries and affiliated companies. It is always required to settle in the black, and it is obligatory to disclose retirement benefit obligations that companies will bear in the future and to record financial assets in valuation gains and losses due to the change from cost valuation to market valuation. Unrealized gains / losses generated by the market value of cross-shareholdings became a factor in the increase / decrease in the capital account, and a consolidated tax payment system including affiliated companies and subsidiaries was introduced. The shift to shareholder capitalism through the introduction of such “international accounting standards” promoted “mobilization of employment” and had a devastating impact on socalled Japanese employment practices. This is the reason for the large-scale reduction of regular employment that occurred around 2000.