Economics a la Tokyo

Foreign concepts?

Many economies are in trouble, perhaps none more than Japan’s. It is the economy that Robert Rubin, U.S. secretary of the Treasury, loves to hector. While spearheading salvage operations in Thailand, South Korea, Indonesia, Russia, and Brazil with the seeming benevolence of a rich uncle, he scolds the Japanese for not pulling themselves out of the doldrums.

Of course, it is more than a curiosity that the miracle economy of the 1980s has fallen so low, and stayed low for so long. Even more puzzling: the Japanese people put up with it. They re-elect the same politicians, and corporate leaders seem immune from stockholder wrath. Explanations abound: corruption, interlocking directorships, too little consumerism, and too much fish-eating. Having once visited Tokyo and been mightily impressed with Japanese diligence, I would have thought that energy and hard work alone would have ended their recession.

But perhaps these qualities turn out to be part of the problem. Nicholas Kristof, who reports from Japan for the New York Times, has written two stories that point up the Japanese dilemma in dealing with their recession: their sense of social solidarity means that no one is allowed to sink in bad times. In a nation of small shops and small factories, businessmen and civic leaders consider themselves duty-bound to keep things going, even when they are losing money hand over fist.

What appears to Americans as inefficiency and even failure to take account of the bottom line is in Japan respect for giri-ninjo-duty and empathy, for example, to one’s employees and conversely to one’s employer. Takahiro Tanaka admitted to Kristof that he went out of the jewelry business because he could neither layoff employees nor ask them to take a pay cut, even though he believed that they would accept one: "I just couldn’t bring myself to do such a thing" (New York Times, April 21, 1998). Mr. Tanaka’s principles may have bankrupted his business, but Japan’s low unemployment rate suggests that many other companies are keeping people who are no longer productively employed.

The same practices are at work in municipal government. In the small town of Ichinosetakahashi, there is a primary school with one teacher and one principal that educates one child, Daiki Saito, at a cost of $175,000 a year (New York Times, October 26,1998). This would drive U.S. taxpayers nuts. But in the principal’s view, "If we just pursue efficiency, the world would become a very dry place, with no sensitivity." According to Kristof, the Japanese see these practices as part of their democratic and egalitarian way of life (a way of life, let us recall, introduced to them only fifty years ago by General Douglas MacArthur and the U.S. occupation forces). Clearly their notions of democracy and equality have been linked to an older and still vibrant sense of civic virtue-social solidarity and social harmony. Kristof writes, "Japan seems troubled by economic changes that are beneficial overall but that make losers out of some people."

What a contrast to Brazil, where the gap between rich and poor, the largest in the world, continues to grow, even as the government takes on another $42 billion in loans from the IMF. The Brazilian economy has been deemed too large to fail-except, of course, for the human losers, exactly those whom the Japanese act to protect. Furthermore, there is no guarantee or historical evidence that, if Brazil overcomes its current crisis, the gap between rich and poor will be significantly narrowed.

Do we have something to learn from Japan? Let me enter here the usual disclaimers about the insularity of Japan, its history of racism and xenophobia, and its high demand for conformity and compliance, and yet ask whether the Japanese have something to teach us in the context of the current economic crisis. When Western bankers and officials call for an end to Japanese inefficiencies and cronyism, aren’t they saying be more like the Brazilians, more like Americans, lay people off, close schools, and end subventions to small farmers and marginal businesses? But maybe we should turn the question around: Why aren’t Americans, Brazilians, the Russians, etc., more like the Japanese in our sense of giri-ninjo, duty and responsibility? Inherent in the Japanese practice of social solidarity, there seems to me a finely honed sense of social justice, which, if emulated elsewhere, would make the human costs of globalization easier to bear.

Published in the 1998-12-04 issue: 

Margaret O’Brien Steinfels is a former editor of Commonweal. 

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