I have been a long time Japan watcher. From a big distance, you understand. Unconfused by too much detailed knowledge. I’ve never been there. But Japan is a big noise in the world, and if you keep your ears open …
Japan, it seems to me, does things unanimously. It moves unanimously, from one unanimous policy to another. It takes an age to change its mind, but once it does, the impact is, for good or for bad, electrifying.
Consider that late nineteenth century moment when, virtually overnight, they suddenly started wearing western suits and top hats. They went from a nation of Kurosawa extras to a nation of Oddjobs, just like that. And with that sartorial switch went a basic switch of worldview, from isolation to looking outwards, from ignoring the West to competing fiercely with it by copying everything it did that seemed to work. One moment, an American admiral is humiliating them by driving a modern warship into one of their ancient harbours. In a blink, the Japanese have their own warships and are knocking seven bells out of the Russians. Japan does all it can to try to catch up with and overtake America peacefully, but America isn’t having it, or so it seems to them. So kaboom!!! Pearl Harbour. Instant conquest of the Pacific. After humiliation in war and further humiliation in the peace that followed, the Japanese mutate from a people who despise modern consumer comforts to people who make the best consumer goods on earth. One moment Japan is making “notoriously shoddy goods”. A blink of an eye later (kaboom!!!), Scottish electronics companies have to call themselves things like “Hinari” in order to do any business.
But now the elite-guided-crony-capitalist status quo which presided over the creation of the Sony Walkman is running seriously out of steam, seemingly with Japan’s entire elite unanimously powerless to reverse the steady drift towards catastrophe. To solve their Keynesian mess, all they now seem capable of is more Keynesianism.
The Economist of February 16th 2002 (print edition) expressed the kind of pessimism about Japan that is now the orthodoxy. The cover shows a Japanese face with a tear falling from its eye. On the contents page (p. 5) the picture is elaborated upon with the following caption:
Japan is sliding slowly downhill. The sad thing is that the Japanese don’t seem to mind. Or if they do, they certainly aren’t doing anything about it.
In the leader article on page 11, The Economist ruminates on all the things that the Japanese should do, but reckons they won’t do it:
How much easier it is simply to muddle through, slipping downhill more or less gracefully…Japan now looks to be an irrelevance…
Now, I agree that things in Japan will have to get worse before they get better But then, get better they surely will. Japan will be back.
When Britain gets into trouble, or faces a big decision, we have a huge and very public row, like the row we’re now having, still, about the EU, and we go out of our way to embroil foreigners in our rowing. (Look at the way British anti-EU’ers are now using the Internet to badmouth the EU in America.) And we never completely settle the matter. In Britain, when you say “we”, you are always leaving lots of people – who continue stubbornly to say “I” – out of your generalisation. Same in the USA, yes?
In Japan that’s not how they do things. They do not wash their dirty linen in public. When crisis strikes, they don’t all ring The Economist and argue their particular corners against each other. No, the Japanese elite goes into an endless succession of secret huddles where it sits cross-legged on the floor in big circles, drinks about a trillion gallons of tea and has untranslatable conversations about how worrying it all is. Slowly a New Approach emerges. Slowly. Very slowly. It is reflected upon from all angles, it strengths pondered, its drawbacks thought through. It is tweaked. Then the underlings are drawn into the New Approach, in their own tea circles, lead by those who have participated in the higher tea circles. They contribute their own untranslatable murmurings. More tweaking. More tea circles. And then, just when the outside world has completely given up on Japan, that’s right: kaboom!!!
Do you really believe that the Japanese are content to sink slowly into the ranks of the “irrelevant” nations, and then stay there for ever? I say: Just because we can’t see anything happening just now, that doesn’t mean that nothing is happening. I assume that another Japanese kaboom!!! is even now being got ready, very slowly.
Japan will, as always, do whatever its rivals are now doing that seems to be working best. The Japanese are even now roaming the earth, mentally speaking and probably literally too, searching out “best practice”. They’ll then knit together all the bits of best practice that they can find into a new combined national entity so well-crafted as almost to amount to a new invention. That’s what they did with photocopiers, motorbikes, luxury cars, cameras. That’s what they’ll eventually do with Japan itself.
“Best practice” now consists of, among other things, free market economics as “extreme” as can be contrived. This is the economic policy lesson now being absorbed with such bad grace by the European elites. This is what the Japanese are also learning, but unlike the Europeans they are learning it in secret. Once the lesson is learned, they will apply it with extreme thoroughness.
Japan can’t copy the USA exactly, because they’re too different. Too small, too resource poor. And in any case it wouldn’t want to, because the USA isn’t actually all that “extreme”, only relatively so. My guess is they’ll look at Hong Kong in its glory days, and turn Japan into a cluster of Hong Kongs. They will surely deregulate their banking system, and free up their domestic markets. But whatever they do, it will, I believe, be massively good news for free market supporters everywhere.
Imagine the impact on the world of Japan embracing free market economics with its own unique brand of unanimous enthusiasm, and imagine the further impact when that policy is a triumphant success, as it surely will be.
It won’t be completely libertarian, no way. Too much “we” for that. If you are a foreigner and not part of the Japanese “we”, your participation rights may still be limited, even if not so much as now. Our own Admiral Perry won’t be satisfied. But even so …
Well, we’ll see. I wonder if any real Japan experts will find time to comment on this. It would be great if someone like that did give us a reaction. But don’t expect any Japanese to join in.