One Small Step For Japan...

Oyama is a beautiful village of 5,000 people nestled in the mountains of Kyushu. Below city hall lies a state-of-the-art TV studio with several cable networks that bring everything from “The MacNeil/Lehrer NewsHour” to local school events into townspeople’s homes. The town is so wealthy, even by Japanese standards, that half of its residents hold passports. Its cheerful slogan is: “Plant plums and chestnuts-then go to Hawaii.” But inside the town government there’s another, lesser-known slogan: “Septic tanks by the end of the century.” Oyama is recommended to visitors as a model of local planning, yet it has no sewage system. Tokyo bureaucrats, who control the destiny of the nation, apparently don’t believe it needs one.

The beauty of last week’s political explosion is that it may eventually reverberate not only in places like Oyama but in America as well. The U.S. economy cannot fully recover until it increases exports to Japan, and exports to Japan cannot increase until the strangle-hold of one-party rule is ended. Closed politics have helped close markets; if the political system genuinely opens up, the markets would likely follow-including, perhaps, the one for the construction of sewage systems in places like Oyama. Political reform may yet prove to be a charade. But if it proceeds, Japanese markets would be opened less as a result of U.S. pressure than because Japanese politicians did so on their own, in order to appeal to voters. Over time, this could dramatically reduce friction between the two countries.

Until now, the only true opposition party in Japan has been the United States. Under the rules of this unhealthy gaiatsu (foreign pressure) game, Japanese officials would often secretly ask the Americans to pressure them, then explain to powerful constituents that they had to act because the Americans demanded it. The only ones left in the dark were the Japanese people, who grew increasingly annoyed at Washington for pushing Japan so hard.

Change will continue to be fitful and slow. But a visitor can sense the old system swaying under the weight of its contradictions. Tokyo’s rotting political culture is merely a symbol of how the whole contraption-while remaining a fearsome export machine-isn’t working at home anymore. Tsutomu Hata, Japan’s likely next prime minister, seems to understand this. He may look like a Chicago-style hack; he even arrogantly clipped his fingernails during a recent interview. But Hata felt the tremors that others in the LDP ignored. “Those who live in Nagatacho [the Tokyo version of “inside the Beltway”] just don’t know what’s going on in this society,” he said.

The signs are, in fact, easy to miss. The Japanese are slow to get angry at their lot in life. After all, trusting the LDP had served them well. The holy grail of foreign-market share seemed worth the personal sacrifice, especially because everyone was living so much better than they had just after the war. Scandal after scandal was rationalized. To this day, the common expression shikata ga nai (" It can’t be helped") reflects a fatalism that may yet bolster the status quo. Indeed, had the current recession been worse, the stability-conscious Japanese might well have rallied around the LDP, just as they have during other crises.

_B_Armani suits:_b_But even for a spartan people, the paradoxes of their status are starting to sink in. The Japanese may dress in Armani, but one third of their housing stock has been classified as Third World quality. To foreigners, they often refer with embarrassment to their homes as “rabbit hutches.” The nation boasts modern subways and intercity rail, but the rest of its infrastructure-not just sewers but roads, insulation and even computer networks-is surprisingly primitive.

The basic bargain most Japanese have struck for the past 40 years is job security in exchange for relinquishing economic autonomy. But job security, while still in place for the vast majority, suddenly looks shaky in the future. And the wisdom of letting the central government decide each area’s economic fate is under serious assault. Morihiro Hosokawa, whose Japan New Party is one of the champions of reform, talks as much about regionalism as corruption. “When I was a governor, I needed the permission of Tokyo to move a bus stop 50 meters,” he says.

The force shackling Hosokawa and thousands of others like him is the almighty Japanese bureaucracy. And that, ultimately, is what this revolt from the middle is all about. “We’re not doing this to clean up politics, but to power it up,” says Susumu Yanase, a rebellious young Japanese legislator. As Karel van Wolferen explains in his brilliant book, “The Enigma of Japanese Power,” the real problem with the Japanese system is an almost total lack of public accountability. Restoring some sovereignty to the people through a genuine multiparty system would begin to roll back the power of the unelected.

If they’re for real, Japanese reformers will begin transforming their country into something the rest of the world would recognize as a free economy. Right now, it’s rigged. Take the yen. According to all Western economic theory, when the value of a currency goes up sharply, prices of imports are supposed to go down sharply.

That doesn’t happen in Japan. Politically connected middlemen eat up the money that is supposed to go to Japanese consumers in the form of lower prices. Entrenched interests have managed this by bribing the LDP, which has become essentially one big protection racket for Japanese businessmen and farmers. Even relatively honest politicians then turn around and use much of the cash to buy votes. The results of this cozy game are the highest prices in the world and a ridiculously low standard of living, considering Japan’s astonishing wealth. By discouraging consumers from consuming, this system also helps run up the huge trade surpluses that are causing so much tension internationally.

Creating a genuine Japanese democracy is the best remedy for this, but it will obviously require years of further nudging by the United States. Even though Japan will continue to be exceptionally resistant to foreign investment, Washington can do more to encourage those elements outside the Tokyo power structure who want it. Their cause-decentralization, deregulation-is America’s, too. But we’re not doing much to help it on the ground.

Oyama, for instance, is on the island of Kyushu, which has a GNP about equal to those of South Korea and the Philippines combined. Of the U.S. Department of Commerce’s 36,000 employees, exactly one is currently engaged in trying to promote American business in this vast economy. Kyushu’s biggest city is Fukuoka. Most Americans wouldn’t know Fukuoka from Joey Buttafuoco if their lives depended on it. We’d better learn. Real reform will make Japan even stronger than it is today. As it moves to take advantage of its political upheaval, so must we.

title: “One Small Step For Japan…” ShowToc: true date: “2023-01-02” author: “Edward Moore”

Oyama is a beautiful village of 5,000 people nestled in the mountains of Kyushu. Below city hall lies a state-of-the-art TV studio with several cable networks that bring everything from “The MacNeil/Lehrer NewsHour” to local school events into townspeople’s homes. The town is so wealthy, even by Japanese standards, that half of its residents hold passports. Its cheerful slogan is: “Plant plums and chestnuts-then go to Hawaii.” But inside the town government there’s another, lesser-known slogan: “Septic tanks by the end of the century.” Oyama is recommended to visitors as a model of local planning, yet it has no sewage system. Tokyo bureaucrats, who control the destiny of the nation, apparently don’t believe it needs one.

The beauty of last week’s political explosion is that it may eventually reverberate not only in places like Oyama but in America as well. The U.S. economy cannot fully recover until it increases exports to Japan, and exports to Japan cannot increase until the strangle-hold of one-party rule is ended. Closed politics have helped close markets; if the political system genuinely opens up, the markets would likely follow-including, perhaps, the one for the construction of sewage systems in places like Oyama. Political reform may yet prove to be a charade. But if it proceeds, Japanese markets would be opened less as a result of U.S. pressure than because Japanese politicians did so on their own, in order to appeal to voters. Over time, this could dramatically reduce friction between the two countries.

Until now, the only true opposition party in Japan has been the United States. Under the rules of this unhealthy gaiatsu (foreign pressure) game, Japanese officials would often secretly ask the Americans to pressure them, then explain to powerful constituents that they had to act because the Americans demanded it. The only ones left in the dark were the Japanese people, who grew increasingly annoyed at Washington for pushing Japan so hard.

Change will continue to be fitful and slow. But a visitor can sense the old system swaying under the weight of its contradictions. Tokyo’s rotting political culture is merely a symbol of how the whole contraption-while remaining a fearsome export machine-isn’t working at home anymore. Tsutomu Hata, Japan’s likely next prime minister, seems to understand this. He may look like a Chicago-style hack; he even arrogantly clipped his fingernails during a recent interview. But Hata felt the tremors that others in the LDP ignored. “Those who live in Nagatacho [the Tokyo version of “inside the Beltway”] just don’t know what’s going on in this society,” he said.

The signs are, in fact, easy to miss. The Japanese are slow to get angry at their lot in life. After all, trusting the LDP had served them well. The holy grail of foreign-market share seemed worth the personal sacrifice, especially because everyone was living so much better than they had just after the war. Scandal after scandal was rationalized. To this day, the common expression shikata ga nai (" It can’t be helped") reflects a fatalism that may yet bolster the status quo. Indeed, had the current recession been worse, the stability-conscious Japanese might well have rallied around the LDP, just as they have during other crises.

_B_Armani suits:_b_But even for a spartan people, the paradoxes of their status are starting to sink in. The Japanese may dress in Armani, but one third of their housing stock has been classified as Third World quality. To foreigners, they often refer with embarrassment to their homes as “rabbit hutches.” The nation boasts modern subways and intercity rail, but the rest of its infrastructure-not just sewers but roads, insulation and even computer networks-is surprisingly primitive.

The basic bargain most Japanese have struck for the past 40 years is job security in exchange for relinquishing economic autonomy. But job security, while still in place for the vast majority, suddenly looks shaky in the future. And the wisdom of letting the central government decide each area’s economic fate is under serious assault. Morihiro Hosokawa, whose Japan New Party is one of the champions of reform, talks as much about regionalism as corruption. “When I was a governor, I needed the permission of Tokyo to move a bus stop 50 meters,” he says.

The force shackling Hosokawa and thousands of others like him is the almighty Japanese bureaucracy. And that, ultimately, is what this revolt from the middle is all about. “We’re not doing this to clean up politics, but to power it up,” says Susumu Yanase, a rebellious young Japanese legislator. As Karel van Wolferen explains in his brilliant book, “The Enigma of Japanese Power,” the real problem with the Japanese system is an almost total lack of public accountability. Restoring some sovereignty to the people through a genuine multiparty system would begin to roll back the power of the unelected.

If they’re for real, Japanese reformers will begin transforming their country into something the rest of the world would recognize as a free economy. Right now, it’s rigged. Take the yen. According to all Western economic theory, when the value of a currency goes up sharply, prices of imports are supposed to go down sharply.

That doesn’t happen in Japan. Politically connected middlemen eat up the money that is supposed to go to Japanese consumers in the form of lower prices. Entrenched interests have managed this by bribing the LDP, which has become essentially one big protection racket for Japanese businessmen and farmers. Even relatively honest politicians then turn around and use much of the cash to buy votes. The results of this cozy game are the highest prices in the world and a ridiculously low standard of living, considering Japan’s astonishing wealth. By discouraging consumers from consuming, this system also helps run up the huge trade surpluses that are causing so much tension internationally.

Creating a genuine Japanese democracy is the best remedy for this, but it will obviously require years of further nudging by the United States. Even though Japan will continue to be exceptionally resistant to foreign investment, Washington can do more to encourage those elements outside the Tokyo power structure who want it. Their cause-decentralization, deregulation-is America’s, too. But we’re not doing much to help it on the ground.

Oyama, for instance, is on the island of Kyushu, which has a GNP about equal to those of South Korea and the Philippines combined. Of the U.S. Department of Commerce’s 36,000 employees, exactly one is currently engaged in trying to promote American business in this vast economy. Kyushu’s biggest city is Fukuoka. Most Americans wouldn’t know Fukuoka from Joey Buttafuoco if their lives depended on it. We’d better learn. Real reform will make Japan even stronger than it is today. As it moves to take advantage of its political upheaval, so must we.