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Thanks to ‘doken kokka,’ are Japan’s best decades behind it?

by Jeff Kingston

THE EMPTINESS OF JAPANESE AFFLUENCE, by Gavan McCormack. Armonk, NY: ME Sharpe, 2001 (2nd edition), 311 pp., $27.95 (paperback).

What went wrong? A decade ago few would have predicted the sustained malaise that has gripped Japan since the early 1990s.

Japan is a nation beset by snowballing economic problems that show no signs of abating and blindsided by incompetence and malfeasance among bankers and bureaucrats once thought to represent the best and brightest. The rot of a sclerotic system is exposed for all to see and disparage.

Restructuring is gaining momentum while the restructured try to come to grips with the broken social contract and a risible social safety net. A numbing freshet of scandals implicating bureaucrats in sleazy schemes and the funneling of vast sums of public works money to construction firms with dubious links have further fanned public skepticism.

Are Japan’s best decades behind it? Future historians will puzzle about how much money was dissipated in such a short period and be flabbergasted about the policy paralysis that has allowed the problems to fester to the verge of intractability.

Koizumi-mania is a sign of the times; people are desperate for a leader who will tell them what to do and get on with the job. Of course his popularity stems from the very fact that he has not fleshed out his “no pain, no gain” slogan and nobody has yet to feel the lash of his promised reforms. To his credit, the prime minister has taken on the “doken kokka” (construction state) in trying to divert road tax revenues to other programs, but few give him much of a chance. He has won far more support for embracing a resolute, damn-the-torpedoes nationalism on issues ranging from visiting Yasakuni Shrine to refusing to intervene on the textbook issue. The logic of his nationalism and the quixotic nature of his stand on road taxes are taken up in “The Emptiness of Japanese Affluence,” an excellent study on Japan’s dysfunctional system.

Gavan McCormack provides a devastating and illuminating analysis of the political economy of exploitation that prevails in contemporary Japan. He presents a face of Japan that is often left obscured in the shadows. This is a Japan where webs of collusion and corruption are endemic and the bad still sleep well.

It is a nation still unable and unwilling to come to terms with the past, seeking refuge in collective amnesia. Interestingly, a few years ago the author might have been accused of Japan-bashing, but now his central arguments are widely accepted. It is telling that McCormack’s views have almost become mainstream as Japanese increasingly vent frustration with a system seen to have soured beyond anyone’s worst nightmares.

What is empty about Japanese affluence? For most Japanese this is a nation that boasts wealth without prosperity. The collapse of the bubble economy has left the scars of a sustained recession and revealed just how much a chimera the miracle has been. Corruption and gross incompetence have left an ugly rubble of bankruptcies and bad debts.

With the government resorting to yet more concreting of the countryside, more dams, tunnels and roads to nowhere, in the desperate hope that a deluge of public works projects will revive the economy, McCormack’s analysis of the construction state makes essential reading.

What emerges is an appreciation for how important construction is to the ruling elite. It is estimated that some 10 percent of Japanese workers are employed in construction, and many of them live in the politically important countryside where votes count more than in the under-represented cities.

Delivering public works projects to local companies is how politicians are able to mobilize votes and extract campaign funds. It is power and turf for bureaucrats with opportunities for personal gain and securing a well-paid postretirement sinecure. It is the basis for a cartel system that inflates prices to make sure that profits are fat and skimming is possible.

The author fumes that “. . . taxpaying citizens are in this way innocent victims of a high level extortion racket, but the reality is even more pernicious. Not only do citizens pay an involuntary, secret, and illegal levy on every project and on the public-works industry as a whole, but to a large extent the money is extracted both from tax-based regular state income and also from the special deficit bonds, and the accumulated deficit has risen to an astronomical sum that weighs more heavily on the shoulders of citizens.”

Even though there is a growing consensus that pump priming in this fashion will not solve Japan’s economic problems, and only postpone the day of reckoning, the government keeps piling on yet more debt, mortgaging the future to sustain a discredited system.

In a sense, the construction sector has become an addict, needing ever-larger doses. With per capita construction related debt topping 8 million yen, the consequences will not be pretty. In some respects the construction state is Japan’s equivalent of the military industrial complex except that it spends far more than the Pentagon! The doken kokka is “. . . sucking in the country’s wealth, consuming it inefficiently, growing like a cancer, and bequeathing both fiscal crisis and environmental devastation.”

The slurry of public works has created a powerful group of vested interests and a political dynamic that cloud the prospects for reform and reviving democracy. It is no wonder that Japan boasts the highest per capita concrete consumption in the world. The thoughtless and useless damage to the environment is a powerful indictment of the system and a bitter legacy for future generations of Japanese who will pay higher taxes to pay off the follies of a corrupt elite who sacrificed the environment for their own materialistic interests.

“Emptiness” makes a compelling case that “. . . too much of the energy, capital and skills of the Japanese people has been appropriated, mobilized, and focused in a political economy of exploitation, both human and material, that ultimately exhausted both the people and their environment.”

Perhaps the most compelling chapter in this excellent expose focuses on the prevailing government-induced collective amnesia regarding Japan’s 15-year rampage in Asia between 1931 and 1945. This shared past with regional neighbors remains terra incognita for too many Japanese precisely because those in power have little interest in facing up to and taking responsibility for the tragedies of Japanese imperialism.

Instead, many Japanese continue to take refuge in a highly developed sense of victimization, as if the significant and undeniable suffering of the Japanese somehow negates the excesses and atrocities that constituted the brutal reality of Japan’s self-serving Pan Asianism.

In the past few years there has been some grudging and limited revision of textbooks under the antediluvian scrutiny of the education ministry, but even such dilatory gestures have provoked a hysterical response from some scholars and pundits who want to return to the days of a whitewashed past in a vain and misconceived effort to safeguard Japan’s image.

The recently approved textbook that has soured relations with South Korea and China is the fruit of their labor. As McCormack argues, “The Japan-as-victim moments of the war are far more deeply etched on the popular memory than those of Japan-as-aggressor, and the purity of purpose and splendor of initial ideal are remembered while the horrors committed in the name of the ideal are forgotten.”

McCormack limns the various atrocities carried out by the Imperial Army in its self-proclaimed Holy War and the ongoing efforts to sanitize these stains from the officially sanctioned record. It is a grim tale of inhumanity and cruelty compounded by continued denial and efforts to minimize the extent of the horror. Few Japanese are aware of the scale of devastation visited upon China nor the specifics of Nanking, Unit 731, chemical warfare, etc.

Proponents of denial have been most obdurate in dealing with the sullying legacy of the “comfort women.” These sex slaves, involving tens of thousands of teenage Korean girls, represent a collective ghost that just will not go away despite best efforts to deny, minimize, rationalize and defend what the author terms “. . . probably the largest-scale state-sponsored rape in history.”

Whither Japan? Those in charge of reform are those who have benefited most from the existing system, a situation that understandably raises doubts about the prospects for change.

The government has loaded up a new gargantuan injection of public works steroids in a desperate attempt to stimulate economic recovery, but the benefits may well be limited to the vested interests of the construction state.

The prolongation of the patterns and practices of the past may postpone the day of reckoning but are not a solution to the gathering problems facing Japan.

The sole basis for optimism is the public consensus on the need for significant reforms, but that unity erodes quickly once discussion turns to allocating the costs of change. This suggests a strategy of muddling through with half measures that shoves the burdens and tough decisions onto the younger generations who will inherit the bills of their profligate elders.

Or, Koizumi will carry out his threat to split the LDP if party dinosaurs block his as yet unspecified reforms, a welcome step in the right direction. Let us hope that such bravery is matched by substantive policies.