Is the Japanese model better after all?
There is no Japanese Donald Trump or Bernie Sanders drawing on the anger of a disenfranchised middle class. Fear of terrorism is nowhere near European levels. The story of whose history -- the West's or Japan's -- was better in recent decades, and will be better in coming ones, is far from written
Walking among the open air cafés in Tokyo during an unseasonably warm November last year -- just after the Paris terror attacks -- I realized that something was different. Japanese almost never think twice about going into public places.
Their streets are not filled with combat troops on wary patrol. Parents don’t fear when their children congregate at a concert or in the park. Japanese are the first to highlight their country’s problems, but when I talk with a group of young men and women at a tiny, crowded bar, their greatest fear for the future is growing old alone, not that they might not grow old at all.
Japan does face a demographic crisis -- its population is actually shrinking -- but there is another big positive dimension to life in modern Japan.
The Japanese are not arguing (all that much, anyway) about social and economic inequality. Nor are the shops dark and the restaurants empty, at least not in Tokyo and other major cities. There is no Japanese Donald Trump or Bernie Sanders drawing on and stoking the anger of a disenfranchised middle class.
Japan has found a separate reality -- a separate peace, if you will -- from the globalization paradigm that has dominated the West since World War II. The country’s experience over the past quarter-century raises the question: How open does a modern nation need to be in order to be “successful”?
That should prompt us to ask, in turn, whether we in the West have been overstating the benefits of openness and globalization, and underestimating the virtues of social cohesion and stability.
All this warrants a fresh look at the long-tainted “Japan model.” At least as viewed by the West, Japan has spent the past quarter-century under a cloud. After the Japanese asset price bubble popped in 1989, the once-and-future “Pacific Superpower” (recall all those headlines from the 1980s, declaring things like “Your Next Boss May be Japanese”) no longer interested investors, pundits and the media.
“Japanese” traits such as lifetime employment, so recently lauded, were quickly reinterpreted as rigidity, risk averseness, and a general inability to deal with a new era of innovation that valued the individual over the group.
In particular, it became an article of faith in the West to decry Japan’s insularity, whether economic or socio-cultural. Japanese society, ethnically monolithic and anti-immigration, was derided as fatally parochial in the new, modern borderless world.
Yet the era of Western superiority proved fleeting. The West’s vacation from history in the 1990s ended with 9/11. The crash of 2008 had the West scrambling to avoid economic collapse, and neither the American nor European economies have recovered anything like their buoyant growth of the 1990s.
Fifteen years after 9/11, the fear of terrorism and the intrusive steps taken to counter it are a depressing overlay to daily life, yet the scourge of the Islamic State continues to grow and has now reached into Western societies.
Meanwhile, despite the advantages of globalization, its costs and the socioeconomic damage done by the massive displacement of old jobs -- especially middle-class industrial jobs -- have been badly understated.
Government approval rates in America remain at historic lows, and a majority of Americans believe race relations have worsened in recent years. The West’s complacency of the early 1990s has been displaced by a host of troubles.
Japan’s contrasting history during approximately the same time period -- since the collapse of its bubble circa 1990 -- forces us to consider how open borders need to be, and to judge the trade-offs societies are willing to accept between growth and opportunity.
Can a country be “globalized” and “modern” yet not “open”? Japan offers the example of a society that is willing to be less engaged with the world and to maintain certain socioeconomic barriers, thereby trading some growth for physical security and economic and social stability at home.
None of this should be interpreted as a call for the West actually to turn Japanese -- at least not excessively so. Nor is it a rehashed version of the Japan triumphalism that was so prevalent in the 1970s and ’80s.
To decry the failures of capitalism is not to desire greater state intervention or a less competitive economy. It is to want to rid Western capitalism of its distortions and injustices -- or at least do a better job of ameliorating them -- and to level the playing field for those who value hard work and want the chance to become part of the ownership society.
Crony capitalism and the close political-financial alliance protected by Democrats and Republicans alike need to be uprooted in favor of policies that help Main Street and provide meaningful cushions for workers and families trying to be part of the economy.
Similarly, to identify the sources of Japan’s physical security is not to embrace an anti-immigrant polemic. The history of the United States and even Europe is inseparable from immigration, but to welcome legal immigration is not the same thing as to call for open borders or to deny the importance of ensuring that a common culture and civil society is maintained and passed down to future generations.
To acknowledge such cultural, social and economic questions is instead to demand a politics that is responsive to reality and not to the utopias of either the left or the right. It is to question how freedom and equality must be balanced against security and opportunity in an imperfect world.
What has been lost in the West is the understanding that openness and globalization are only a means, not an end.
Japan’s different approach to both ideas goes back to its profoundly different view of modernity. In the West, ever since the American and French revolutions, modernity has been identified with the beginning of a new world, and the discarding of tradition.
Since then, Western modernity increasingly became identified with the concept of openness to the world, moving from the realm of ideas and political philosophy to the field of economic competition, and more slowly to the opening up of the country to large-scale immigration.
As the belief in openness sank deep roots, it defined both national identity and government policy, particularly in America, evolving into the idea that greater diversity, achieved through ever-increasing openness, result in greater national strength.
The concept of openness soon transcended national boundaries and evolved from a concern solely with the internal workings of a society to the idea of an integrated and united globe.
In Japan, by contrast, modernity has always been restrained by a tradition of social stability that goes back to the centuries of a feudal system headed by shoguns and emperors. Thus the Japanese have always viewed modernity more warily.
Japan really is different from the rest of the modern world, and while that has brought much criticism of Japan from other nations, perhaps it’s time to take a fresh look. It is an almost heretical thought, but maybe Japan has made better national choices since the 1990s than we have given it credit for. It has succeeded in providing a stable and secure life for its people, despite significant economic challenges and statistical stagnation.
It has done so in part by maintaining cohesion at home and certain barriers against the world. By comparison, America and Europe appear increasingly confounded by their failures to ensure sociocultural integration, keep their economies growing equally for all, and provide security in the heart of their great cities.
When historians look back on global history from the 1990s into the first decades of the 21st century, how will they judge which nations were successful, and which failed to provide a good life for their people?
The metric employed by Americans in particular -- how much personal freedom and economic growth one can calculate and accumulate -- is not necessarily the measure favored by the Japanese. It is fair to say that in Japan, it is not the lack of individual restraint that counts, but the overall level of stability in society.
Similarly, the West’s adherence to neoclassical economics has been adapted in Japan to something that may be less efficient, but also less disruptive to society.
Not that the Japanese aren’t constantly questioning the level of their involvement in the world. “Do you think we should take in more Syrian refugees?” the head of one of Japan’s leading cultural exchange organizations asked me last November in Tokyo. “It looks like we’re not doing our part.” I demurred, noting that Europe has yet to deal with problems the refugee flood may cause. Twenty-four hours later, the Paris massacre burst onto Japan’s television screens.
Since my trip to Japan, we’ve also had the Brussels attacks and mass shooting in San Bernardino, California. ISIS-connected terrorists struck in Jakarta, and jihadist-inspired lone wolves carried out knife attacks on the London Underground and shot an American police officer in Philadelphia.
Unlike the West, consumed by the threat of terrorism for half a generation, Japan is a modernized and liberal society not directly at risk from the Islamic State, Al Qaeda, and homegrown Islamist radicals.
Like any nation, it offers a plethora of soft targets, but the reality is that Japan is in comparatively little danger. Its people live in a reality entirely different from that of the West, spared from a seemingly endless fight against an implacable enemy who now lives among them.
In important ways, Japan privileges order over openness, and stability over opportunity. America has had no such value system -- and what Donald Trump offers is but little-disguised jingoism and an apparent preference for trade wars as a tool of statecraft. Trump is rightly derided by Democrats and establishment Republicans.
But the example of Japan shows that what we might call radical openness might not be the only path for a modern society to take.
Since World War II, the predominance of the concepts of openness and diversity has never been seriously challenged in the West. The almost universally accepted identification of modernity with openness has prevented needed discussions of the costs associated with such an approach.
More recently, arguments such as Francis Fukuyama’s, “The End of History” presented a triumphalist liberal interpretation of societal success, tied in part to Western notions of openness and diversity. Borders, both physical and ideational, are universally condemned as immoral, misguided and harmful to a nation and its citizenry.
The assumption that openness is a prerequisite for modernity and economic success has led observers to dismiss, or has prevented them from understanding, the logic of an approach designed to maintain social cohesion and insulate a country from foreign economic and security disturbances.
The anthropologist Edward T. Hall was one of the few Western scholars to consider the benefits of a different approach in his 1976 book, Beyond Culture, when he compared “low context,” or diverse, cultures like the United States, with “high context,” or more uniform cultures like Japan.
Low-context cultures, which merge many disparate traditions, encourage creativity but become increasingly unwieldy the larger they grow. High-context cultures, by comparison, often impose rigidity in thinking and certainly in social interaction, but offer far greater cohesion, due largely to their monolithic ethnicity.
Forty years later, the trade-offs that Hall discussed are at the center of political conflicts throughout the West. Even America, whose national identity was built on immigration, finds itself at odds over the benefits of open borders and amnesty, forming odd alliances across socioeconomic lines.
For many in the United States, openness has become an end in itself, with no reference to larger social questions. The fear of unassimilated immigrants is greatest in Europe, which is now forced to contemplate the effects of decades of largely unrestrained, largely Muslim, immigration that is rapidly changing the continent’s demographics while burdening its security and social services.
Reassessing Japan’s recent history in the light of Western failures does not mean whitewashing its current weaknesses and challenges. A third of a century of anemic economic growth, averaging 2 percent from 1981 to 2015, is a signal that the mature Japanese economy will likely never again see double-digit growth.
Unbalanced investment has left Japan’s rural regions in parlous economic shape, and temporary workers now account for nearly 40 percent of the workforce.
The country’s regulatory environment is too stifling, corruption nests inside corporate and political cultures, the service sector is startlingly inefficient, and the nuclear industry is a mess. The government was widely criticized for its inept handling of the March 2011 nuclear crisis after the devastating Tohoku earthquake.
Socially, Japanese youth are widely reported to be dissatisfied with their future prospects, and the scope for individualism in the workplace remains tightly constricted. Foreigners are tolerated, but not particularly welcomed, and Japanese of Korean descent still face discrimination.
Immigration is all but absent. Moreover, Japan has faced its own homegrown terrorists, in the millennial Aum Shinrikyo cult, back in the 1990s. Above all, the country faces a debilitating demographic collapse, one no modern democracy has ever encountered and that poses the single greatest threat to Japan’s future.
Yet compared with the problems that both the West and many of its neighbors face, Japan’s relative strength and stability should at the least cause us to rethink our assumptions about social and economic policy. The Wall Street Journal’s Jacob Schlesinger argues that, for two decades after the popping of the bubble, Japan’s leadership consciously chose a deflationary course for the economy, seeking stability and the minimization of social risk that would accompany radical economic restructuring.
Only the return of Shinzo Abe to the premiership in 2012 reversed this long trend, as he actively sought to inflate the economy, privileging economic expansion over stability.
The difference might be thought of as “value” policy versus “growth” policy, similar to stocks or mutual funds. The careful, moderate reforms of what is called “Abenomics” indicate that even the current government is seeking a mix of value and growth, again prioritizing social stability.
Despite decades of officially slow or stagnant macro growth, the real economic picture of Japan is better than many Westerners think. Writing in the Financial Times, Matthew C. Klein showed that, in the decade from 2005 to 2014, real GDP per person grew more in Japan than in the United States, Great Britain and the Eurozone.
In the nearly quarter-century from 1990 to 2013, in other words, nearly the entire post-bubble era, real household consumption in Japan also grew more than the Eurozone, and behind only Great Britain, the United States and Sweden.
As China’s economy began openly to unravel during 2015, and the U.S. equity markets precipitously declined in early 2016, my visits to Tokyo have revealed a country neither sprinting ahead nor rocked by economic instability.
The uncertainty that clouds so many of the world’s economies exacts psychic and material costs, but Japan, where GDP growth has been sluggish for decades, seems less threatened by the roller coaster that is prevalent in the West, in part because its system remains more resistant to radical restructuring and the diktats of unrestrained market forces. In fact, things simply aren’t all that bad.
Japan remains a high-income country by Organization for Economic Cooperation and Development (OECD) standards.
Its GDP per capita at purchasing power parity rates increased from $34,300 in 2011 to $36,400 in 2014, while the cost of living in Tokyo and its other major cities declined, due in part to moderate deflationary trends. Japan’s Gini coefficient, which measures income inequality, stood at .32 in 2008 (the latest year available), according to the World Bank, higher than many European nations, but lower than America’s .41 (2013 measure).
Economic data tell only part of the national story. Other measures show a picture of social strength. To give just a few examples, Americans are five times as likely to be murdered as their Japanese counterparts, according to the United Nations. Japan, with approximately 40 percent the population of the United States, recorded just 443 cases of intentional homicide in 2011, a rate of 0.3 per 100,000 inhabitants; while in America, 14,661 persons were murdered intentionally, a rate of 4.7 per 100,000.
While gun control advocates point out that Japan has far more stringent gun laws than the United States, crimes of all kinds, especially violent crimes, occur far less frequently in Japan than in America. Japan is a more peaceful society because of factors other than regulation of guns. There are few debates over what it means to be “Japanese,” and different segments of society rarely seem to be at one another’s throats.
Japan remains a male-dominated society, yet Japanese women are among the most highly educated in the world, and they traditionally have controlled household budgets and family decisions. Moreover, as the Financial Times’ Klein notes, more than half the growth in Japanese workers since 2003 has come from women entering the labor force, even as the overall population has shrunk.
Prime Minister Abe’s “womenomics” policy seeks to increase this number even more, as well as to break the glass ceiling in executive suites.
In education, Japanese students once again scored at the top of the global math, reading, and science rankings by the OECD in 2012. Americans, by contrast, scored significantly lower, 27th in math and 17th in reading, despite spending close to 30 percent more per student than Japan. Meanwhile, Japan’s unemployment rate is below 3.5 percent, which partly represents demographic decline, but also the strong work ethic and expectation that able-bodied citizens will be in the labor force.
Sixty-six percent of Japanese aged 15-74 were employed, according to the Federal Reserve Bank of St. Louis, while 63 percent of Americans aged 16 or older held a job, according to the U.S. Department of Labor, a number that has been dropping steadily since 2007.
Japan is also far healthier than America and most European countries, ranking as the least obese developed country according to the OECD, while America is No. 1. Moreover, the number of suicides in Japan has fallen for six straight years, since 2009, and is down by a third from its peak in 2003.
Again, such statistics of social strength tell only part of a far more complex story. Yet they can be adduced to support an argument that Japan has more successfully dealt with its myriad problems over the past quarter-century than most observers have recognized.
Whether Japan can continue to maintain its stability, social cohesion and basic economic strength without opening up its borders, overturning some traditional social structures and introducing an element of disruptiveness into its culture will be the great question of Japanese history over the next two generations. Yet even to ask such questions is to again presume a Western frame of reference.
Paris and Brussels have driven home a stark understanding that the West’s long war with Islamic terrorism is not only far from over, but that it is entering another, deadlier phase. We have been fighting terrorism at home and abroad since the 1970s, but in particular since 1993 and the first World Trade Center attack.
Close to 25 years on, Western societies appear increasingly threatened by a radicalized minority. Meanwhile, and just as worryingly, Western leaders have failed to solve the economic problems that have dogged their nations since 2008 and all have used the crisis as an excuse to increase the role of government, adding yet another layer of unease, inefficiency and uncertainty onto society.
America and the West will debate the causes of radicalization and the steps needed to counter it for years, perhaps decades to come, just as they will the future of the capitalist system. Meanwhile, the crisis will grow.
Skilled workers in the knowledge economy will continue to outpace those lacking such ability and society will become more divided between haves and have-nots, giving openings to socialists like François Hollande and Bernie Sanders, while fueling Trumpism, Le Penism, and other extreme movements on both the right and the left of the political spectrum.
After Brussels, however, one thing seems clear: Ordinary Westerners will live another decade or longer fearing for their physical safety, waiting for the next attack, swinging between panic and numbness, and expending massive amounts of energy and treasure on war, all while they watch their economies gyrate, further dividing their societies.
And the Japanese won’t. The story of whose history was better during these decades is far from written.
Michael Auslin is a resident scholar and the director of Japan Studies at the American Enterprise Institute (AEI), where he specializes in Asian regional security and political issues. Before joining AEI, Auslin was an associate professor of history at Yale University. His articles can be read here
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