Japan — Viewed from Above
Abenomics is widely hoped to provide an economic turnaround for Japan. But is the prime minister focusing on the right issues?
July 26, 2013
Sometimes a picture tells you more than a thousand words or mountains of economic and political analysis. It simply puts reality right in front of your eyes.
I recently flew in to Tokyo’s Narita International Airport.
It was a busy time of day and we were kept circling in long loops over the area of the airport, which is quite a ways outside of Tokyo.
The view from above was very instructive. Every inch of the landscape seemed groomed to near perfection, either in the form of a small town or village, farm fields, golf courses, industrial areas or forests.
Japan is clearly a country that is already decked out to the hilt. The country is evidently not missing material things. Its economic underperformance is not due to an investment shortfall either.
It has the entire physical infrastructure that any country could want to have for itself (and more than that). Its high-speed trains remain the standard setters in the world.
That leaves one to wonder: Where is the room to grow? And how can the Japanese get out of their current doldrums?
The answer to these two questions largely depends on a change in people’s attitudes and outlook. Japan is an archipelago. Its people remain not only very inward-looking, but also to an amazing extent insecure.
It seems as if they collectively sense that something is at odds, but — far removed from other nations — they have little insight, or energy, into how to change.
Japan’s political leaders, for their part, bask in isolationist glory, as does much of the business community. They both wish for Japan’s true moment in the sun — call it the “Sony moment” — to return.
That was indeed the time when Japan seemed unstoppable.
In the 1970s and 1980s, its command of the consumer electronics industry provided the country with great riches.
But it was not to last. The global manufacturing caravan simply marched on. Soon enough, the assembly operations were shifted to lower-cost locales, such as Malaysia, often by Japanese firms themselves.
The Japanese are also great data gatherers. That would seem to equip them well for the modern consumer economy. But this penchant alone does not help them overcome what was (and still very much is) really lacking in their country — any real notion of openness.
In 1987, the American philosopher Allan Bloom wrote a seminal book entitled “The Closing of the American Mind.”
A similar process occurred in Japan. In the two decades following World War II, the Japanese mind had been open and curious about the outside world. After that, it shut down gradually and has remained essentially closed ever since.
This is apparent in profoundly conservative traits, such as treating women in corporate management still as an afterthought.
The same fate befalls foreigners as well as Japanese executives with overseas management experience. (The one unique and strange exception to foreigners’ fate is Nissan’s Carlos Ghosn.)
Granted, Sony tried to have Howard Stringer whip it into shape, but in vain. Olympus, on the other hand, found in Michael Wood a whistleblower who exposed the company’s accounting mess.
All three groups continue to be treated as if they were potential viruses that could infect the sanctified Japanese corporate body with some mortal disease.
These forces may be viruses all right, but they are very needed ones if Japan is to reinvent itself — and overcome its close mindedness at last.
The bizarre picture of teary-eyed Japanese top executives, wailing in front of cameras after a big screw-up, says it all. They aren’t men enough soberly to accept responsibility.
The ritual is to perform this act in an effeminate way. That is doubly strange considering Japan is such a patriarchic society.
In one form or another, this attitude prevails throughout society. Whenever one confronts the Japanese with any problem, however gently, the response is often the same — “so sorry.” Ever heard an action-oriented, “OK, let’s do it”?
Of course, saying “sorry” is not intended as an apology of any kind (which would also not be warranted). Rather, it often signifies a collective and instinctive abandonment of individual thinking — and ultimately the collective abandonment of responsibility.
All of which makes plain one essential fact. Mr. Abe’s reform efforts do not go far enough, not by a long shot. The source of Japan’s true problem is not that there has not been sufficient tinkering with the monetary spigot in the past.
Nor is it that some bureaucratic procedures need to be streamlined, although that certainly can’t hurt. The same holds for Abe’s announcement to pursue more investment promotion and foreign trade activities.
If anything, that’s the kind of stuff the Japanese have been doing for decades.
What Japan really needs is far more than all that. It needs a cultural revolution. That should be Abe’s much talked about “Third Arrow.”
Japan needs for a leader to stand up and say that the Japanese, in their close-mindedness, are robbing their economy of the oxygen it needs to breathe.
But that is a message that would be very hard for the scion of a big political family like Mr. Abe to deliver.
His father was a politician and whose grandfather was prime minister. Mr. Abe’s mother was the daughter of Nobusuke Kishi, prime minister of Japan from 1957 to 1960.
To deliver that message would mean for Mr. Abe to renege on the family history — something which is a no-no, especially in Japanese culture.
Loaded up with family pomp, Mr. Abe’s instincts actually go in the opposite direction. His main interest is to restore the Japan of old, with the emperor as head of state and a much stronger military.
How that would resuscitate the country’s growth remains a mystery. Such restoration moves will do nothing to revive the Japanese economy, not to mention the negative political fallout abroad.
Thus, the view from the air on the Japanese economic landscape is especially clear. Japan is a very well tended garden.
Its core deficiency is in that the country is missing many of the soft factors that would allow it to advance more dynamically.
Since cultural revolutions are next to impossible, especially for island nations who have been stewing in their own juices for too long, the most likely scenario is for Japan to continue its glorious slide in a downward direction.
Short of an unexpected revolution, there is little it can do to stop that.
What Japan really needs is a cultural revolution, not a rebirth of nationalism.
The collective closing of the Japanese mind is robbing the economy of the oxygen it needs to breathe.
Japan still scorns foreigners, women in management and execs with overseas experience.
Every inch of Japan's landscape seemed groomed to near perfection. How to grow?
The most likely scenario is for Japan to continue its glorious slide downward.