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Tuesday, May 2, 2006

Limiting the economic gaps


Japan is rich because Japanese are poor.

That, in essence, is the paradoxical hypothesis conceived by French sociologist Jean Baudrillard. He wondered whether Japan operated under a different model from "Western-style idealism," which he said requires individual citizens to become rich before their nation can become so.

Baudrillard said it appeared as though Japanese society was based on feudalism, with people acting like cells of an organism and avoiding open dissent.

However, the Japanese-style affluent society, built up in the 60 years after World War II on the basis of a premodern model, is not necessarily a fake.

To Western observers, individual Japanese may seem poor as far as their lifestyles are concerned. But in my opinion, Japan, a late starter in the modernization drive, has elements of affluence that people should be proud of.

Having toured throughout the country, I have yet to find a really poor community. In other Asian countries, there is a stark contrast between rich and poor communities. A good example is China, with its prosperous coast and dirt-poor inland regions.

Western nations, which have spent a long time modernizing themselves, have not developed a glaring regional divide. On the other hand, Japan and other East Asian countries that have had to modernize in a short period of time have become burdened with wide regional gaps.

Although quick modernization has led to efficiency in some ways, it has also caused wide economic gaps between fast-developing industrial areas and old-fashioned rural areas.

In addition, under the policy of promoting economic development as a national goal, governments have poured investments into industrial areas. As a result, a striking regional divide has emerged in social infrastructure such as highway networks.

In the late 1950s, when Japan entered a high-growth era, droves of boys and girls who had just graduated from middle school traveled to the Tokyo and Osaka-Kobe regions by train to start working at shops, factories and small businesses. As a result, outlying communities and rural villages lost population, while big cities became overpopulated.

When the Japanese National Railways was privatized in the 1980s, railways in depopulated areas were abandoned. Nevertheless, people in depopulated areas did not become impoverished.

In postwar Japan, ruling-party lawmakers from rural areas have habitually used pork-barrel spending to increase their political influence. Former Prime Minister Kakuei Tanaka from Niigata Prefecture, former Prime Minister Noboru Takeshita from Shimane Prefecture, and others like them were considered great politicians for bringing large amounts of public works projects to their constituencies.

Thanks to pork-barrel politics, not only urban areas but also depopulated areas have benefited from ample public works spending that has brought modern highway networks and public transport systems to wide areas of the nation.

Pork-barrel politics may be dirty, but government policy of promoting balanced national land development has minimized the nation's regional divides. Japan has become rich in the sense that there is little regional divide in land development. In my opinion, government policy of promoting balanced national land development was not a mistake.

In this context, "balanced" and "equal" are synonymous. Recently, in various contexts, "equality" has come under criticism. "Balanced national land development" is often criticized as an example of bad policy.

To be sure, the goodness or badness of policy depends on the context of the times. From the 1960s to the 1980s, the above-mentioned national land development policy was highly beneficial. Thanks to that policy, national infrastructure that should make the public proud, and has driven away shadows of poverty, has been built.

Nevertheless, now that the basic infrastructure has been completed and the nation faces huge budget deficits and accumulated debts, national land-development policy must be reviewed. In this context, debate on the question often centers on the necessity of promoting regional autonomy.

Few dispute the necessity of shifting from centralized to decentralized power. But there are still wide regional income gaps. If prefectural and municipal governments must use their local revenues -- from resident, corporate, automobile and other taxes -- to finance their operations, regional balance could collapse. Ways must be found to promote local autonomy without widening regional divide.

Takamitsu Sawa is a professor at Ritsumeikan University's Graduate School of Policy Science and a specially appointed professor at Kyoto University's Institute of Economic Research.


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