NEW DIRECTIONS FOR JAPAN

At the dawn of a new millennium, many countries around the world are talking hopefully about a “new beginning.” The World Economic Forum in Davos, Switzerland, in late January and early February rang with affirmations that world economic growth was accelerating and “Euro-pessimism” was a thing of the past.

Japan, however, remains sunk in gloom. Of course the fear of an economic meltdown that swept the nation in 1997 and 1998 has abated. The economy has bottomed out and is embarking on the path to recovery. But there is still little mood of energetically moving forward to meet the new challenges of the twenty-first century.

All in all, the twentieth century was a century of success for Japan. It was a century in which this Far Eastern island country, with no resources to speak of aside from its people, advanced to center stage of the world economy. The American business magazine Forbes selected Henry Ford II as the business leader exemplifying the twentieth century, because he made the automobile, originally affordable only by the rich, accessible to ordinary people by introducing mass production, thus ushering in the twentieth century's car culture. Japan succeeded brilliantly in Ford-style standardized mass production (Fordism), becoming an economic power second only to the United States.

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In the century’s final decade, however, things went awry. Many Japanese call this period the “lost decade” or Japan’s “second defeat,” the first being the defeat in World War II. Why did things go wrong? Of course the recession that occurred in reaction to the bubble economy of the late 1980s was an important factor. More important, though, was the fact that while the various systems and practices responsible for Japan’s success for the better part of the century were extremely well suited to a Fordist industrial and technological civilization, they did not cope well with such structural changes of the 1990s as the technological paradigm shift, the accelerating “marketization” and megacompetition of the post-cold-war world economy, and the diversification of values brought about by affluence.

Japanese-style egalitarianism, with its emphasis on equal outcomes—valuing the organization over the individual, uniformity over creativity—was ideally suited to a latecomer trying to catch up with the developed countries. Today, however, the systems and practices that were once advantageous have become a drag on new growth. The obvious solution is to change these systems and practices to bring them in line with the demands of the new age, but since this means altering the fundamental values of Japanese society, it is easier said than done. Peter Drucker has called this dilemma “the paradox of success.” Systems that anyone can see have failed, like those of the Soviet Union’s command economy, can be changed, but the very fact that Japan’s systems were successful for decades makes them harder to change. Most Japanese already enjoy a reasonably comfortable standard of living and would rather not alter their present lifestyle. Politicians do not want to change. And in their heart of hearts bureaucrats and business leaders, fixated on past successes, do not want to, either. But if this country tries to preserve the status quo it will most certainly be left behind.

I was a member of the Prime Minister’s Commission on Japan’s Goals in the Twenty-first Century, a private study group set up by Prime Minister Obuchi Keizô last year. In its recently released report the commission wrote, “We share a sense of urgency. We fear that as things stand Japan is headed for decline.” The report made the points that egalitarianism had become too focused on equal outcomes, hindering individuals’ willingness to take risks and their ability to give full rein to creativity, and argued the need for an egalitarianism weighted toward equal opportunity and for systems capable of adequately rewarding “the efforts of those who take risks and display excellence underpinned by a pioneer spirit.” If there were equal opportunity, it follows that there would be disparate outcomes, and this “fair disparity” would ensure the vitality of society as a whole.

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The report proposed deregulation, decentralization, lifelong learning, valuing of the role of nongovernmental organizations and providing tax exemptions for donations to them, educational reform, and other measures. In regard to external relations, the report praised the positive role played so far by the Japan-U.S. alliance and confirmed that the alliance would continue to be pivotal to Japan’s security policy in the twenty-first century, but also emphasized the importance of friendship with other countries, especially the need for efforts to build relations of greater depth and breadth with our Chinese and Korean neighbors.

The question is whether these proposals will be acted on. Quite a few commentators have expressed doubt over the feasibility of many of the proposals, declaring them too ambitious. The important thing, though, is to conduct a serious debate over the appropriateness of the proposals before arguing about their feasibility. The reason Japan’s recession, which began in 1991, lasted a decade is that the Japanese remained sunk in pessimism. This pessimism was a kind of defeatism, the sense that nothing one does will actually succeed. As a result, even though people knew that something needed to be done, they sat by passively while things went from bad to worse. What Japan needs is the will to affirm that the conditions both within and around the nation have undergone fundamental change, proactively break through the status quo, and resolutely reform systems and practices.

In short, a true sense of urgency is necessary. Back in 1979 the late Prime Minister Ôhira Masayoshi (1978-80) set up a similar panel to offer proposals for Japan’s future, some of which were incorporated into policy by Prime Minister Nakasone Yasuhiro (1982-87). Even if Prime Minister Obuchi cannot implement the present proposals, they all address issues that cannot be avoided if Japan is to grow and contribute to the international community in the twenty-first century. (KOJIMA Akira, Editorial Page Editor, Nihon Keizai Shimbun)

© 2000 Japan Echo Inc.