There are two powerful mechanisms that work to entrench the dominance of hierarchical corporations. Chapter 6 will explain how our current financial system reinforces corporate dominance and helps to keep people from exercising control over their habitation. This chapter explains how the categories of mainstream economics produce a systematic mismeasurement of the amount of investment in the economy. This mismeasurement, in turn, reinforces the idea that public policy should be oriented towards incentivizing business investment. This leads directly to limitations on both public spending and wage gains for workers since both of these come at the expense of corporation profitability. The consequence is a systematic underinvestment in the expenditures that would improve our habitation.

Even though we have a habitation economy, we are using the economic tools that were developed to understand an industrial economy. Among the most important of these tools are the definition of investment and the accounting methods for measuring it. Investment is generally defined by economists as the production of goods that will be used to make other goods. Whether or not an outlay is defined as an investment has important consequences for measuring total output.

Investment outlays are contrasted with spending on intermediate goods that are used up in the process of production, such as the steel and glass used to make automobiles or a company's use of bookkeeping services. These intermediate goods are not included in GDP since their cost is incorporated in the price of final products. Investment is also distinguished from consumption activity that simply uses up the supply of goods and services produced in a given year. It follows that when an expense that was previously defined as either an intermediate good or a consumption good is redefined as an investment, it increases gross domestic product (GDP). GDP is the sum of investment plus the total amount of goods and services that are consumed by final users plus government spending plus the balance of international trade. In short, investment expenditures are productive whereas consumption simply uses up what has been produced elsewhere; intermediate goods are necessary but do not have the generative power of investments.

In this chapter I address the intersection of geostrategic security and politico-economic interests in the region by re-examining Okinawa as the “keystone of the Pacific” and what this role means. More specifically, in the context of the contemporary US-led Indo-Pacific security architecture, the discussion explains the strategic significance of Okinawa to the US–Japan alliance and how it is increasingly playing host to the intensified interoperability of American and Japanese forces throughout the Southwest Island Chain. This includes an assessment of new JSDF facilities on Okinawa as well as the security status quo of the Senkaku Islands. It concludes with the most likely projections for how the tense situation might be escalated or deescalated, as well as how these relate to tensions over the South China Sea and Taiwan Straits, as China continues to increase its security capabilities. In short, the chapter argues that unless significant changes are made or occur, Okinawa is highly likely to become a regional flashpoint. In this regard, it reflects the broader theme of the book in illustrating how a set of complex variables intersecting the state, market and society of the prefecture are inextricably linked to surrounding great power rivalries. Moreover, an examination of the available evidence suggests that these relationships are unstable, making conflict all the more likely as the centre of power transitions from the US and its allies towards China.

In contrast, however, even when these structural dynamics constrain the range of possible policy actions, which in this case appear to be pushing Okinawa towards being a focal point for military action, cooperative security initiatives aimed at averting direct military conflict may be possible. In that regard, the argument is made that these need to be informed by credible ideational concepts that contain sufficient mutual compatibility between a range of stakeholders. In order to evidence the above, a number of leading IR theories are simplified and applied to the Okinawan case study. This involves summarizing their key ideas, recapitulating how they are used to understand unfolding situations on the ground and sea, and combining their most pertinent insights to gain a clearer picture. By doing so, I unpack the state and non-state drivers of structural power, explain how these result in specific forms of policy-making and illustrate the key ideational elements that inform those policy-makers’ decision-making.

This chapter traces the money trail to expose the commercial interests at play in the conflict over Okinawa and its outer off-islands. In so doing, it also addresses the broader issues of complex economics that surround the prefecture's governance and affect its role in regional international relations. This reveals the historical reasons behind the current state and status of US forces on the Ryukyus, as well as the financial incentives provided for both American and JSDF personnel to be stationed on the islands. It also assesses the economically driven aspects of local Okinawan authorities’ policy in terms of their relationship with Chinese and Taiwanese counterparts. This includes discussion of Beijing's claims to the Senkaku Islands, which were only asserted in earnest after oil was discovered beneath the surrounding seabed and Okinawa's reversion to Japan had been provisionally agreed during the 1960s. Therein, these elements are contextualized in contrast with China's recent overtures towards the Okinawan Prefectural Government, which hint at their encouragement of Governor Tamaki Denny's efforts to promote a closer relationship with mainland Asia through regionally based socio-economic exchange. Contrastingly, the often conflicting influence of Japan's national government in providing the omoiyari yosan, or sympathy budget, to pay for American troops stationed on Okinawa, as well as its massive domestic aid package in the form of special lump sum payments to local government, is further examined. Particular attention is afforded here to the impact that these funding practices and economic pressures have upon regional dynamics.

Ultimately, the chapter argues that money on Okinawa matters. As such, within the overarching thrust of the volume's focus on this specific locality as a probable flashpoint for broader regional conflict, it is contended that a large range of commercial industries and interests must be accounted for. This includes unpacking how financial incentives and penalties are often in competition with one another, as well as grappling with potential areas of greater synergy. More concretely, by arguing from a decentred Okinawan perspective, the discussion illuminates how further efforts are needed to reduce Okinawa's vulnerability and increase resilience through specialization and diversification. These aspects, particularly in terms of the roles of local businesses and new initiatives, are emphasized as a means by which to ensure more sustainable economic and environmental practices.

Okinawa should be one of the most famous and popular destinations on the planet. As part of the Ryukyu Islands arc that stretches southwestward from the tip of Japan's southernmost main island, Kyushu, down almost as far as the northeast coast of Taiwan, Okinawa Prefecture sits amid the coral-filled, emerald-green waters that separate the East China Sea to the west and Pacific Ocean to the east (see Map 2). Yet its idyllic subtropical climate, rich fishing grounds and pacifistic local culture belie a deeply troubled past, strained present and ominous future. This is because Okinawa has historically been a flashpoint for great power rivalry and once again threatens to become one, in economic, political and geostrategic terms. The main island of Okinawa, its remote off-islands and their maritime surrounds are a site of unique geostrategic, socio-cultural, economic and environmental interest, but the islands’ pivotal position has also previously made them a battleground and makes them a potential site of future conflict. This includes an ongoing contest for power and regional hegemony between the United States (US), its staunch ally in East Asia, Japan, and a rising China. In the past, the prefecture has progressed from being a vassal state of China in the form of an independent kingdom, to colonization by Japan, becoming a US protectorate after Japan's defeat in the Second World War, and then from 1972 to the present once again reverting to Japanese sovereign rule as Japan's forty-seventh prefecture.

There have been various significant developments since its reversion to Japanese rule, including how the prefecture has been affected by its disproportionate hosting of American – and now increasingly Japanese – armed forces stationed at the numerous US and Japan Self Defense Force (JSDF) military bases on the islands. The US presence in particular has increasingly become the focus of a broader regional power contest being played out between the US, China and Japan, with substantial interest also from Taiwan, both Koreas and Russia. Okinawa and the so-called First Island Chain, along which it is located, therefore, remain key sites of great power competition and contestation, making them a seemingly inevitable flashpoint in the coming decades of the twenty-first century.

POLITICS, ECONOMICS AND SECURITY: NEGATIVE AND POSITIVE SCENARIOS

This book has argued that for political, economic and geostrategic reasons, Okinawa is in danger of becoming a flashpoint for great power conflict. This has been argued from the perspective of its turbulent history, as well as its precarious present and uncertain future. The prefecture's complex domestic politics and society, tensions between local and mainland economic vested interests – along with their impact upon fragile ecosystems – and the islands’ challenging international geomilitary position all compound this designation as a probable convergence point for major interstate violence. In light of the evidence presented thus far, this final chapter brings together the key elements discussed above and sets out a series of plausible scenarios for each of their core spheres of interaction. The aim of this endeavour is to shine a light on the primary obstacles to progress as well as illuminating credible pathways to more positive outcomes in each case. Within this context, the most significant variables are consistently identified as leading state and non-state political actors, economic incentives and disincentives, and pivotal shifts in the broader international geostrategic landscape. After highlighting the depth and breadth of the challenge at hand in each case, an alternative scenario is then put forward as a form of recommendation for enabling dialogue towards the creation of mechanisms through which constructive change and policy innovation might be realized. This begins from the Okinawan perspective by sketching negative and positive scenarios that address the seemingly irreconcilable tensions between long-standing domestic political adversaries driving discord on the islands.

LONG-STANDING LOCALIZED RIVALRY: DANGERS OF DIVIDED RULE

We have duly highlighted the challenges posed by the complex nature of Okinawa's domestic politics and how this might contribute towards the islands becoming a flashpoint for more wide-reaching conflict. Similarly, in some of the more compelling negative analyses put forward by analysts and political actors, localized political divisions become a key factor in leading the prefecture, or at least certain municipalities within it, towards in-fighting and interparty discord that threatens the cohesion of any potential Okinawa-wide unity.

OKINAWA's COMPLEX POLITICAL STRUCTURE

Okinawa's political make-up is complicated. As such, in priming the discussion for further development of the respective economic and security-based arguments made in Chapters 3 and 4, this chapter makes the central argument that complex domestic political divisions are likely to become pivotal in relation to Okinawa manifesting itself as a potential flashpoint. More specifically, it details how these divisions intersect with ideology, identity, demographics and geographical location in a form that means each of these variables has a significant effect upon related policies affecting the prefecture and its surrounds as a whole. In order to fully understand their interrelated dynamics, however, we must once again review the historical antecedents of contemporary Okinawan politics, as many core aspects rooted in the past remain pivotal to the present operation of Okinawan local authorities and the larger political structures of which they form a key part.

Formal assimilation, which took the form of a de facto annexation through shobun, or disposition, of the Ryukyu Kingdom by Japan's Meiji rulers, was officially completed in 1879. After this, on the face of it, Okinawa became one of the 47 standardized Japanese prefectures. These are administrative units with highly limited self-autonomy, somewhere between the status of a US state and a British county. This should have meant equal treatment under the Meiji constitution and no more or less self-autonomy than any of the other 46 equivalent local authorities. However, the unique history of the Ryukyu Kingdom, along with mainland Japanese discrimination towards Okinawans, as well as residual Chinese interest and inter-island competition within the prefecture, meant that political wrangling continued up to the point of Japan's entry into the Pacific War. At that time, rapidly deteriorating regional international relations acted to accelerate Tokyo's turn towards militarism, leading to the centralized authorities taking authoritarian control over Okinawa and using the islands as their suteishi, or throwaway stones, with which to defend the Japanese main islands from the impending Allied onslaught.

This book is the culmination of my ongoing research and experiences living on, travelling around and interacting intensively with Okinawa since 2001 when I first visited the islands from Tokyo as a young person in the midst of a hot and hectic Japanese summer. Ever since that time, the role and meaning of this unique island and its extended archipelago – positioned at the very centre of a geological and geopolitical fault line that runs through the stunningly serene beauty of the East China Sea's turquoise iridescence – has fascinated and enthralled me. Now, as the geopolitics of the Far East threaten to boil over from a new cold war to hotly contested kinetic conflict, it seems appropriate to focus attention more than ever on what is poised to become one of the region's key flashpoints.

The concept for the book was, therefore, to create an informative, engaging and balanced resource for those new to Okinawa who want to learn more about it and its heightened significance. However, I also anticipate that practitioners, academics and students who might want to better understand the complexity of Okinawa's state, market and societal spheres will find the text to be a useful resource, as well as containing a compelling argument, namely that Okinawa matters! Through this project, I have aimed to challenge existing literature on Okinawa that suffers from specific or partisan perspectives and compile a single volume that is both holistic in nature and integrated in its approach. In addition to those at the head of government, directors of large corporations and military leaders, it is my belief that only by incorporating the role of a wide range of key actors from foreign policy-making, domestic political and business communities, as well as the broader general population, can realistic counter-measures and sustainable solutions be developed in response to escalation. Only then can the currently tense status quo be alleviated and a lasting peace be realized.

In order to successfully realize this challenging endeavour and express it in a credible form, the research unpacked throughout the chapters that follow consciously and systematically accesses a diverse scope and scale of data in order to write a book that strives for coherence and consistency despite its obvious limitations as a short, stand-alone text. This includes extensive use of original Japanese-language sources.