/

Disillusionment with Japan

by

From devastation in 1945 through vigorous growth and increasing riches to stagnation, is that the story of Japan over the last 70 years? Doubts about Japan’s future seem inevitable. A recent collection of 15 essays by Japanese and foreign experts, “Examining Japan’s Lost Decades,” edited by Yoichi Funabashi and Barak Kushner, led me to review the changes I have witnessed over some 70 years.

In 1946, when I first reached Japan in the small British Commonwealth contingent of the Allied Occupation force, Japanese cities lay in ruins and Japanese people were suffering deprivation and hunger. By the 1960s, Japan had achieved an astonishing turnaround.

As commercial counselor in the British embassy between 1966 and 1970, I spent much time and effort in explaining Japanese achievements to British businessmen. We had much to learn, and if we did not improve our own performance much to fear, from Japanese competition. Japan Inc. was not a miracle but it worked. Japan was producing an educated elite and a plethora of engineers. The quality of Japanese products was outstanding and we needed to study Japanese methods. The lifetime employment system acted as a substitute for Western-style social security systems. Management and workers generally cooperated and gross examples of inequality were rare.

The close interrelationship between government and business was an important factor in ensuring sustained economic growth. Japan’s consensus system ironed out differences in a smoother way than could be achieved under Anglo-Saxon confrontational methods. Japan was a safe and honest place in which to do business.

There were obvious weaknesses in the system. The construction industry was corrupt and the yakuza troublesome. The Ministry of International Trade and Industry (the fore-runner of the Ministry of Economy, Trade and Industry) was dominated by an old-fashioned mercantilist philosophy. Some Japanese companies did not always comply with international best practice; latent nationalism was a potential threat. Pollution was a major problem. The overall message was, however, positive.

I returned as British ambassador in 1980 to a Japan growing in confidence and seen by many observers such as Hermann Kahn and Ezra Vogel not just as a major power but as potentially number one in the world. Mercantilism, which might have been justified in the 1950s and early ’60s, was, however, still dominant and Japanese economic arrogance was growing. Japanese ministers doubted whether Japan needed foreign products. Trade friction, which began in the 1960s, was the biggest issue.

Japan needed to open up to the world and employ some of its excess savings abroad. Britain welcomed Japanese capital investments, which indeed regenerated the British automobile industry. Entrepreneurs like Akio Morita of Sony and Soichiro Honda seized the opportunities. As the 1980s wore on Japanese became ubiquitous in the City of London and in world markets. Japan’s future prosperity seemed assured.

Japanese asset prices, which had reached absurd levels, could not, however, go on rising forever. Inevitably, to the consternation of some Japanese, the bubble burst. Japanese banks had to be rescued and deflation set in.

Japan’s aging and now declining population added to the pressures. Japan’s education system failed to adapt to the demand for more entrepreneurial individuals with open minds. The rigidities of the lifetime employment system prevented the introduction of the flexibility that the economy needed. Government business consensus came under strain. Confidence in politicians and bureaucrats was lost as more and more resources were spent in concreting over the countryside and building roads, tunnels and bridges to nowhere.

The devastating earthquake in Kobe and the far worse Tohoku earthquake and tsunami revealed the complacency of Japan’s bureaucracy and business. It also exposed the village mentality of the Japanese establishment, which led the attempts to cover up what had gone wrong and why.

Japanese companies, which once seemed impregnable, began to face fierce competition from South Korea. China once seen as a major destination for Japanese investment and source of supply was increasingly viewed as a threat. The response of Japanese companies focused on the home market was slow and inadequate. The traditional Japanese system of consensus building meant that decisions were taken on the basis of the lowest common denominator (not the highest common factor). The totally inadequate response and cover up by the Japanese establishment to the Olympus scandal was shameful.

Inequalities grew. Japanese who could not find permanent jobs became social drop-outs, threatening the social harmony that had so long kept Japanese society stable.

“Abenomics,” the latest and perhaps most wide-ranging set of policies devised by Japanese politicians in recent years, are an inadequate response to the challenges posed especially by Japan’s demographics. Prime Minister Shinzo Abe’s “third arrow” is aimed at solving some of the fundamental issues. While much is made about the role of women in revitalizing the economy, Japan still seems a male chauvinist society. Japan’s need for immigrants is noted, but the gap remains huge and no real attempt seems to have been made to alter popular prejudices against immigrants.

The U.S. alliance is, of course, vital to Japan, and Japan should be able to play a bigger part in international peace-keeping. But the time and effort spent trying to get a consensus in favor of constitutional change would be better spent in promoting the huge changes needed to globalize and modernize Japanese society and attitudes.

Abe’s apparent antipathy to any media criticism and his attempts to bully the media do real harm to Japan’s world image. Revisionist efforts to obscure or alter historical facts are counterproductive. They merely draw further attention to the crimes of the Japanese military during the last war and remind foreign audiences not only of ‘sex slaves’ but also of the slavery imposed on allied prisoners of war and on the indigenous peoples of countries and territories occupied by Japanese forces during the Pacific War.

Inevitably observers of modern Japan are disappointed and disillusioned when they see that Japanese leaders in politics and business are failing to confront the demographic threat and promote the changes needed to achieve a positive future for Japan. “Examining Japan’s Lost Decades” has much to say on what has gone wrong and should be studied by all who want to understand the history of Japan in the last quarter century.

Hugh Cortazzi served as Britain’s ambassador to Japan from 1980-1984.

  • Gary Raynor

    Excellent article.

  • Liars N. Fools

    As always Ambassador Cortazzi has put his finger on the key aspect of the problem, and that is the failure of leaders to acknowledge reality and truth and to take courageous actions, not slink into the holes of nationalistic drivel.

  • Mots

    Thank you for the informative article. The 1946-the present personal experience informed observation is a rare and valuable thing and I appreciate reading this. I would love to read a book written from such experience…….

    I praise the ideas in the article but have one comment about immigration. Regarding the referred to “Japan’s need for immigrants” I think that the situation is not that dire and keeping the country overpopulated is not a good thing. The biggest problem by far in Japan is too many people. A decrease of 3 fold in population would leave Japan with a more ideal situation overall. If Japan had the energy to resurrect itself from the devastation of WWII it certainly can handle a dramatic decrease in population without having to import millions of people, and maintain an over-crowded over-population for the sake of money or banking system. The future does not belong to exponentially growing countries but instead to countries that can handle stationary growth culture. The Japanese “way,” created over the centuries which led to village thinking on a large scale is an asset, not a demerit. The American “way” of “more growth!” has met its limits and is NOT something that Japan should emulate. Traditional Japanese culture based on long term relationships and living as a community arose from a period when Japan was a stationary state (non-exponentially growing-not frontier consuming) culture over some centuries. Such refined community based traditional culture just may be a better model than copying the US style immigration and frontier Ferguson-Baltimore-Detroit mentality. Japan needs to find its own way and has a unique tradition not found elsewhere and that should not be abandoned by converting the country into an immigration free for all like the US. I think that the answers to the short term economic problem caused by temporary demographic imbalance by for example encouraging old people to work and increased use of robots for long term care can come from within the archipelago. The American “way of life” is no longer a role model. Instead of copying the US, I expect that Japan may have something to teach the rest of the world as it grapples with the need for stationary (or declining) economic growth.

    • Firas Kraïem

      “The local communities (including large cities such as Osaka) are
      refreshingly independent from Tokyo and often do the right things (push back against a corrupt govt/nuclear industry collusion for example).”

      This may sadly be too rosy a vision. Whether they like it or not, the people of Nago in Okinawa will have to put up with Henoko, and those of Satsumasendai in Kagoshima with the Sendai nuclear plant, for example, because Tokyo says so.

    • Richard Solomon

      This is a good analysis up until the last paragraph. It is highly unlikely that ‘the people’ in Japan will force change from the bottom. This is because the culture has never tolerated, let alone encouraged, that kind of independent, assertive behavior from ‘below.’ Japan has always been a ‘top down’ kind of culture. It won’t change that much.

      • JimmyJM

        Agree. Unfortunately, the people will continue to elect the candidates with the white gloves and the loudest sound trucks instead of voting on the issues. Not unlike many other countries (though without the white gloves).

      • Mots

        I understand and basically agree with your ideas with respect to city dwellers. Us country folk really are independent thinkers/doers and things are very different in the countryside under the surface, not easily seen. Already some people are leaving the cities and many more wanting to do so, The countryside is the future and allows more full spiritual development and advances/new ways of living. A paradigm shift in human culture is upon us and the countryside, with its resources of energy and food is key to new ways of living.

    • tisho

      Like i explained in my previous comments, population size is irrelevant to standards of living. You can have a population of 100 000 and still have the highest possible standards of living. The only problem i see is that, smaller population means smaller economy, smaller economy equals small influence, which is the only real concern i believe for most people. If the Japanese population decreases, the economy will decrease and therefore the influence Japan has will also decrease, if they want to keep the influence they have, they need to keep the economy big and strong, which equals big population. However, there is another real concern, and that is aging population. Aging population means fewer labor force, which means shortage of labor. This is what effects standards of living and is the real problem Japan has. The solution is my mind is very simple as always. It is not a mass immigration, but rather market liberalization. The only thing the Japanese government needs to do is remove all regulations and restrictions imposed upon businesses, that way, the Japanese companies can find the labor they need and bring them to Japan, this is what US companies are doing. Google and hire anybody from around the world and grand him Visa and fly him to the US. Japanese companies cannot do that right now. If the Japanese government removed the restrictions, the companies will easily find the labor they need. This solves the problem with labor shortages and also adds extra people.

  • Steve Jackman

    Because of Japanese rigidity and inflexibility, what were once Japan’s strengths have now turned into its weaknesses, since Japan steadfastly refuses to change. As I look around Japan, most of what I see are provincial and backward attitudes, a closed village mentality, and immense inertia.

    As the saying goes, one rises to one’s level of incompetence. Unfortunately, it seems that Japan has reached the level of its incompetence and is doomed to stagnate if current trends continue.

    The arrogance Hugh Cortazzi points out is not just economic arrogance, but a deeply entrenched and across-the-board arrogance in almost all aspects, which long-term foreign residents of Japan like myself are well aware of (i.e., the Japanese sense of racial superiority, Nihonjinron, widespread xenophobia and racism).

    Hubris and arrogance have been the downfall of many nations and Japan is no exception. All the chest-thumping and navel gazing will not change this. It is just sad that in Japan’s case it has been so quick, after the short lived glory days of the 70s and 80s, which just seem like a distant memory now. I hope the Japanese get a chance to read this excellent article, so this can be a wake up call for them.

    • Richard Solomon

      Hubris/arrogance are rigid psychological defenses which cover up a fear of change. People hold onto traditional ways of thinking and doing because the familiarity gives them a sense of comfort and security. The harder they hold on/more arrogant they seem to outsiders, the more fearful of change they are.

      • tisho

        Arrogance can be a means for psychological defense, but it can also be a result of superiority beliefs. It is false to think that only Japanese people are afraid of change, all people are naturally afraid of change, that includes Europeans and even Americans which many people falsely believe are very risk taking, which i think is completely false, but that’s another topic. In my experience, i find Japanese people to be extremely misinformed and to lack too much information. An interesting difference in my experience between Americans and Japanese is that, when you speak to an American and you are telling him something he doesn’t know, he tends to take your words for it and accept it as truth, i.e. he is aware that he doesn’t know anything about the subject, while with the Japanese, and again i am speaking from my personal experience and those are my observations, when i tell them something they clearly are not familiar with, they tend to reject whatever i say and stick with the little half information they have on the subject, and hence this is where the arrogance come in. It all boils down to education, when the education system changes, the attitude of people will change too.

      • Steve Jackman

        Ignorance equals arrogance. This is especially true for Japan.

      • Steve Jackman

        Very true. It’s a downward spiral which Japan is in.

  • Richard Solomon

    What a well written, concise analysis this is. Abe’s so called ‘third arrow’ has largely been a lot of high sounding words with very little substantial action. Until he, or some other Prime Minister, is ready to take on the conservative forces which rule the country Japan will not work its way out of its stagnation. It will require what looks like ‘radical’ action to alter the dynamics which are operating in the country now. Will the existing political parties find/support such a leader? Will the populace vote for such an agenda which will seem ‘foreign’ to them? Do things have to get much worse before such change might be possible?!?

  • Japanese Bull Fighter

    Japan may be in decline, but as someone who maintains residences in both Britain and Japan, I can say from on going personal experience that just about any service I can think of is higher quality and lower cost in Japan than in Britain.

    • Steve Jackman

      UK gross govt debt as percent of GDP is 90% vs. Japan gross govt debt as percent of GDP of 238% (and getting worse rapidly). Do you see why public services are cheaper in Japan and where that is leading the country?

      • Japanese Bull Fighter

        No, I don’t because most of the government debt was built up by wasteful spending on public works projects, the so-called bridges to nowhere, not on public services. Further, not all public services are provided by the government. Rail service in Japan is vastly better than Britain, less expansive, and large parts of it are profitable.

        British banker friends say that the debt to GDP ratio is not particularly important. The real indicators are the cost of borrowing (interest rates), what percentage of the budget goes to paying interest, and whether the market is will to buy government debt. Further, because Japanese debt is largely held within Japan, repayment amounts are not subject to exchange rate fluctuations.

        But, if you would like to take the British route to a lower debt – 20% sales tax (VAT) and 40% income tax rate on incomes over 42,385 GBP – I imagine that the Japanese government would be happy to accept your voluntary contributions. One way you can show that you really do love Japan despite your constant complaining.

      • Steve Jackman

        The only reason interest rates are low in Japan is because Kuroda through the BoJ is buying up the entire supply of government debt (Japanese Govt Bonds), not because of market conditions. If you are going to discuss economics and finance, I suggest you do some basic reading on these topics first.

        The BoJ cannot continue buying JGBs indefinitely and interest rates in Japan will spike as soon as it stops its ridiculous QE, which is much bigger in percentage terms than the QE in the US. Your British banker friends seem woefully ignorant and misinformed.

    • Jonathan Fields

      Here we go again, JBF…
      Japan is criticized and you bust out the “but Britain” or “but America” drivel.

  • Japanese Bull Fighter

    It looks like the people who wrote the book Cortazzi cites did not want
    many people to read it. I was going to buy it until I checked the
    price: 17,223 yen, 85 GBP, or $138.55.

    Japan may be going down the pan, but book pricing in the UK is a rip off.

    • JimmyJM

      That is also the price quoted in Amazon. Even the Kindle version is $131.62. Excessive.

    • Steve Jackman

      As you whine about the price of a book, in case you haven’t noticed, some of us are trying to have a serious discussion here about the important issues Hugh writes about. This is the second time you have chosen to whine about the price of a book recently in response to serious articles published here in The Japan Times.

      • Japanese Bull Fighter

        To have a serious disucssion, I need to know what the book says. If it is too expensive, very few people will buy it and learn whatever lessons it has to offer.

        You’re continual whinging about awful Japan is hardly represents serious discussion. It doesn’t go beyond bar talk.

      • Steve Jackman

        So, just buy the book then. As they say, put up or shut up.

      • Japanese Bull Fighter

        Steve, I really like the elevated tone of your postings. Have you read the JT guidelines on posting?

        And, I’ll let you buy the book and tell us what it says. I defer to the size of your wallet and your analytical skills.

      • Steve Jackman

        To “put up or shut up” is a well known English idiom which is commonly used. Is English not your first language?

      • Japanese Bull Fighter

        Steve, this make come as a great shock, but I don’t take orders from you.

        And, while you are on the line, please explain how your endless reponses to anything I say advance the discussion.

        Has the thought of ignoring that which you disagree with or dislike never crossed your mind?

    • Toolonggone

      I understand your feeling. Academic books are generally expensive. Routledge is a notorious publishing company for printing capitalism–regardless of research areas. It’s proportional to the amount of volume as well as the publisher who makes a book contract. If the book is A4 size, and +300 pages long, it’s gonna jack up the price.

  • KietaZou

    Only one way of approaching a problem here is allowed, though the Osaka referendum shows it can cloak itself as “reform” – indeed, it loves to, since it wins even when it loses.

    Reform somehow always means returning to the entrenched corruption and mindless obedience of the pre-WWII era. The only virtue is: do not be different, and, if you mind your place, they’ll promise you can keep whatever crumbs fall from their table – if you hide them.

  • JimmyJM

    An excellent piece and spot on. In an addendum to the next to last paragraph: Reporters Without Borders’ list of media freedom has Japan as #61 down from #11 in five years. The administration’s efforts to bring the media into line with their views smacks of lessons learned from China. And the Ambassador’s comment “latent nationalism was a potential threat” was never more true than it is today. Well written.

  • Gary Raynor

    Japanese Bull Fighter • 4 hours ago
    It looks like the people who wrote the book Cortazzi cites did not want
    many people to read it.
    To have a serious disucssion, I need to know what the book says. If it is too expensive,
    JT, can you not get rid off this troll? He reduces any attempt at a thoughtful discussion to asinine remarks and personal attacks on those who opine that Japan is less than the heaven of his dreams.

    • Japanese Bull Fighter

      Where is the personal attack in this posting? It is you who are making a personal attack!

    • Japanese Bull Fighter

      You do know, don’t you, that you can flag posts as inappropriate. If you move your mouse into the upper right corner, you will see a flag icon. You click on it to flag a post as inappropriate.

      I would also suggest your click on “commenting policy” at the top of the comments. I just reread it. I don’t see your name or that of Steve Jackman listed as moderators.

      I also do not see anything in the commenting policy that says that any and all comments about Japan need be negative.

      Also to quote from the commenting policy:

      Don’t generalize about nationality.

      Bring something to the conversation. Just agreeing with a commenter, or saying “good/bad story” isn’t advancing the dialogue.

      Make sure the comment is related to the story and the discussion.

  • Gary Raynor

    JimmyJM Japanese Bull Fighter • an hour ago
    That is also the price quoted in Amazon. Even the Kindle version is $131.62. Excessive.
    Not really Jimmy. It’s the norm for specialized academic books. That’s not to say I agree with it, but it’s in the price range that is familiar too me.
    With Kindle, you can, after a few months, rent the book for a month. That’s how I normally get round it.

    • Japanese Bull Fighter

      No, it’s not the norm for specialzied academic books overall. UK published books tend to be much more expensive than US published books.

  • Tim Johnston

    A country slow to adapt with the 21st century and the village mentality with the isolation and lack of international standards has set Japan back as an industrialized nation. Being the third largest economy it’s amazing how few people can speak English. On one hand it’s good Japan has held on to it’s identity.
    With the emergence of China and the influx of Chinese tourists. Japan will need to begin to adapt to differences and either learn English or Japanese.
    The bubble has long passed and the emergence of India,China, Brazil and other countries with cheap labor costs will force Japanese companies into turmoil. You always here people talking about the population problem in Japan to keep up with it’s expected growth.

    in a country of 128,000 million and less and less jobs. Japan shouldn’t fret over it’s population decrease but embrace it. ever been on a rush hour train. Might be a good thing.

    On a positive note the bribes with the politicians and Yakuza seems to have been getting better or at least brushed under the carpet. Things have become better in Japan in the last 2 decades minus the economic woes. Now Abe is raising the taxes and giving everyone a personal number in hopes of keeping everyone in line to get more tax revenue.
    Lets just hope he helps the people who need it and doesn’t line his own pockets like so many past Japanese Politicians ex: (Ryutaro Hashimoto to name one of too many)

  • Pierce Langdon

    So, has anyone read the book? I haven’t seen any reviews and I’m hesitant to buy it until I do.

  • Paul Martin

    Excellent analysis by a former Ambassador from my country of citizenship. Even though my Sons have been married to Japanese and my grandchildren are part Japanese we have felt extreme prejudice here especially when dealing with immigration, it seems that department has it’s share of anti gaijin bigots as I am sure many foreigners will agree !
    We like Japan, it is safe, good food and friendly people on a whole, but the government and bureaucrats, as correctly pointed out in this essay are on the WRONG track and some day inevitable foreigners will reach their peak of tolerance and either form solid unions or leave Japan if and when that happens the Japanese
    people will suddenly realize the FOLLY of those in authority on power and superiority trips who hold the repressive reigns of power at every crucial level!

  • Paul Martin

    Excellent analysis by a former Ambassador from my country of citizenship. Even though my Sons have been married to Japanese and my grandchildren are part Japanese we have felt extreme prejudice here especially when dealing with immigration, it seems that department has it’s share of anti gaijin bigots as I am sure many foreigners will agree !
    We like Japan, it is safe, good food and friendly people on a whole, but the government and bureaucrats, as correctly pointed out in this essay are on the WRONG track and some day inevitable foreigners will reach their peak of tolerance and either form solid unions or leave Japan if and when that happens the Japanese
    people will suddenly realize the FOLLY of those in authority on power and superiority trips who hold the repressive reigns of power at every crucial level!

    “I am… against all violations of the Constitution to silence by force and not by reason the complaints or criticisms, just or unjust, of our citizens against the conduct of their agents.” –Thomas Jefferson

  • Jonathan Fields

    The same applies to you. If you don’t like criticism of Japan, stay off of a news and opinion website about Japan.