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Sunday, Feb. 12, 2012

EDITORIAL

Japan: failure or success?

A recent spate of articles in The New York Times comparing Japan's overall condition with America's was so welcome in Japan that the gist of the initial article was read out by a questioning lawmaker in the Diet.

The article by Eamonn Fingleton (New York Times, Jan. 6) painted a rosy picture of Japan. Fingleton's update of Ezra Vogel's "Japan as Number One" study was an answer to TV analysts like David Gergen, who described Japan on CNN as "a very demoralized country."

The articles were partially a response to rightwing American pundits like Gergen who insist that Japan is more failure than success. The truth lies somewhere in the middle.

Japan's economy and society have major weaknesses obvious to both inside and outside observers, but its strengths are easy to overlook. Japan's current condition offers important lessons that need balanced consideration.

Japan's housing market has never recovered from the boom years, nor has the Tokyo stock market. Yet Japan has not fallen into the kind of housing and loan crisis that persists in the United States. The austerity measures inciting European street demonstrations and the injustices fueling the Occupy Wall Street movement have not exploded in Japan, where debt is just as much of a threat. The fiscal deficit in Japan has not caused enough suffering to provoke public protest, though that may not last for long.

The articles fail to mention that the economy of Japan is now composed of more irregular workers than ever before — more than 30 percent of all workers. One out of four workers in Japan has an annual income of less than ¥2 million.

Japan has staved off large-scale unemployment through the soft measures of tolerating job insecurity and minimizing income, in essence spreading the pain throughout the workforce. These tactics will not provide a fundamental solution to unemployment problems.

Just as problematic is that large corporations have done little to update their workplace culture. Overtime hours and out-of-date hiring practices remain entrenched. Women have yet to be fully brought into the current economy. The lack of transparency in corporate practices have led to serious scandals at Olympus Corp. and Tokyo Electric Power Co. (Tepco), the latter's incompetent leadership and top-down management style having come to light after the Fukushima nuclear catastrophe.

The articles rightly pointed out that Japan's society continues to be a generally lively one. Life expectancy here is one of the highest in the world, and large cities are as bustling and vibrant as ever. Japanese culture continues to produce more than its share of exportable movies, manga and fads, and restaurants draw plenty of review stars. On the other side, Japan's suicide rate is one of the world's highest, a sign of widespread depression and alienation. Other social problems such as hikikomori social recluses and bullying at school reveal that affluence does not translate into mental well-being.

Japan's oft-cited technophilia continues with more and better high-tech devices and higher rates of Internet connectivity than in most developing countries. Japan's electricity output, a measure of consumer activity, has risen faster than most developed countries over the past several decades.

Transportation facilities continue to be upgraded in a striking contrast to languishing infrastructure growth in the United States.

Japan's companies have started to replace labor-intensive production with production of advanced materials and precision equipment, a forward-looking view.

All the issues raised by the New York Times articles are perhaps more nuanced and double-sided when viewed from inside Japan. For example, the response to the tsunami and earthquake clearly showcased the impressive sense of restraint, hard work and group spirit of Japanese. At the same time, the government's muddled response, poor planning and years-long failure to oversee Tepco are blatant examples of just what is wrong.

These long-view, big-picture evaluations should be cause for neither celebration nor lament; they should instead help identify specific problems and reconsider the right solutions from a realistic, balanced point of view. The lost decade from 1990 to 2000, and the almost-lost decade from 2000 to 2010, produced terrible effects that rattled the entire socioeconomic structure of Japan. Yet Japan has not exhibited the large scale of suffering that can be seen in American and Europe, either.

Japan is not declining, nor is it ascending. Japan is neither an ideal model nor a bad example. Its strengths and failures are instructive. The free-market, laissez-faire ideas so beloved by American rightwing economists and think-tank analysts would not have helped Japan. Rather, Japan's successes come from careful long-range planning, a willingness to engage in social negotiations, and a less self-centered view of the world than there is in the West.

Neither the pro-Japan nor "Japan as fallen giant" factions mentioned what is most needed for Japan to get out of its current slump and to restore vitality — government and corporate transparency and accountability, and a new spirit of openness and optimism. Removing the monolithic grip of bureaucratic power and reinstating the force of the people's democratic will would be the first best step.



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