Tuesday, March 17, 2009

TIMEly* Report on Ichiro Ozawa and Japan’s Future

*Couldn’t resist it.

I’ve knocked Coco Masters’ reports before*, so I might as well give credit where it is due. The TIME cover article on Ichiro Ozawa and Japan’s future that she co-wrote with Michael Elliott is good. I think it does a fine job of capturing the sense of the man, the paradox and the ambiguities that make him so compelling at the core of the DPJ, rendering a profile of Japan at a crossroads, and bringing the two together. There are captivating turns of phrases, such as “backroom maverick”, but there are also some points that I disagree with, which I’ll lay out there, because that’s what I am.

Convincing Japanese of the need for change is never easy, but Ozawa finds himself tantalizingly close to power precisely because the country so urgently needs fresh ideas. The global recession has hit Japan harder than any other developed nation. Exports are plummeting, Japan's economy is contracting at double-digit rates and the country's industrial giants are reeling. Rarely has "stay the course" seemed so grossly inadequate as a solution, yet the LDP seems unable to mount a credible recovery effort, and the public is fed up with the bumbling half measures of party hacks.
The report mixes two things. One is the Japanese public’s sense of sheer incompetence and institutional rot directed at the LDP despite the latter’s desperate efforts to blame it all on the bureaucracy that had been accelerated by the collapse of two short-lived administrations and led to an Upper House general election defeat even before the economic downturn set in. (I mention in passing that I think that it is more a crisis of confidence in the LDP than any “new ideas” that the DPJ has been putting forward, but that’s just my opinion.) The other is the consequences of the economic fallout resulting from the global financial crisis that began in earnest in 2008 4Q (the economic fallout, that is), which more or less coincided with the beginning of the Aso administration. Here, questions over Aso’s competence were magnified by the bumbling around what ended up as the 2 trillion yen giveaway in the second stimulus package. But this is only tangentially related to what the report somewhat misleadingly appears to be calling “stay the course” and relates to the more enduring problem that the report narrates. It is notable that the DPJ has been very quiet regarding its own ideas about dealing with the economic ramifications of the global financial crisis. Nobody has good ideas, at least the kind that has staying power.

The donations [from Nishimatsu Construction] are alleged to have been funneled through Ozawa's political fund.
Actually, nobody is denying that the Nishimatsu money was funneled to Ozawa’s political funds. What is in question is the legality of the arrangement and the extent of involvement by and criminal complicity (if any) of Ozawa’s secretary and (less plausibly) Ozawa himself.

China's economic model is now admired around the world as a model, as Japan's once was.
Admired? Really? Feared, yes, just as the Japanese model was also feared as an alien, inimitable system. But if there have been management books and op-eds exhorting North Americans and West Europeans to emulate the Chinese model, I’ve yet to see them. Some authoritarian regimes may see the Chinese system as a way to perpetuate themselves in power and welcome and emulate the Chinese government’s policy of keeping its hands out of values issues in host countries, but is that what the report means by “widely admired around the world as a model”?

Asia has never seen a time when both China and Japan were simultaneously strong. That does not mean such a state of affairs is impossible; it does mean that both nations will need wise leaders if they are not to turn into bitter rivals.
Now I know that this suggestion of a major, structural geopolitical conflict between Japan and China is a very popular piece of conventional wisdom; I happen to think that it’s a piece of rot. It’s not worth going into at length now; suffice to say that there are few politically and militarily contentious issues between Japan and China and the one that there are happen to be minor and, more important to the issue at hand, have little to nothing to do with the rest of Asia (except (only obliquely) with the two Koreas). The “rivalry” is actually a mish-mash of political and economic talking points that reside mainly in the imaginings of journalists, academics and conservative-nationalist politicians. They gain some currency in the real world when people in positions of some influence begin to take voiced concerns seriously. I’ll be more than happy to deal with this in more detail in an appropriate forum. And no, I’m about as far from a pacifist internationalist as can be without seeking nuclear weapons of our own.

Japan's spectacularly successful export-oriented industries were responsible for creating the world's second largest economy, and their lifetime-employment policies, with generous benefits, obviated the need for a comprehensive social safety net of the sort familiar to Western Europeans.
There’s a lot of truth to this particular piece of conventional wisdom, but keep in mind that a large part of the Japanese labor force had always lived outside this system. Japan, playing catch-up, was for a long relatively poorer than the rest of the West. It was the family, immediate and extended, that bore a large part of the burden of maintaining the social safety net.

After financial markets were liberalized in the 1980s, Japan went on a debt-fueled binge that made modern Americans look as thrifty as Amish farmers.
Really? Do you have the numbers to back that up? In passing, I note that “Japan” and “Americans” belong to two very different categories; journalists routinely make these logically jarring juxtapositions. I suspect that they are all English majors.

The last section Getting Out of a Funk has a logical flaw that fails to properly connect the first two paragraphs to the remainder and the last paragraph is the kind of empty rhetorical flourish that I hate, but everybody seems to do it, so it’s probably just me.

All in all though, I think that this is a good report; my comments are mostly about subsidiary facts and issues. Besides, any time a sentence like The question is not simply whether someone who is as deeply steeped in Japanese political culture as Ozawa — who at times seems as motivated by replacing the LDP as he is by a clear analysis of where Japan should be headed — can be a sexy agent of change. captures the essence of the man for Western readers, it’s worth the read.

Okay, too much time on my hands today. That’s it for now.

* Though not nearly as thoroughly and devastatingly (I hope) as I slammed another TIME reporter back in the day. And I’m planning a lulu of a hit on Thomas Friedman’s latest op-ed…


Janne Morén said...

It's a good point to make that the famed Japanese salaryman - career white-collar worker - has never been more than a minority. Because of the social and economic status and the overall high level of education, the group has an outside influence on both politics and the public image, but that is more or less true of the upper middle class anywhere. The "salaryman" is nothing if not a brilliant piece of accidental branding.

It's also worth remembering that the lifetime employment and associated systems in Japan were not planned or desired, but accrued as ad-hoc responses to early labor rights court cases that established very far-reaching rights and work security for those with permanent employment.

Jun Okumura said...

Janne: Your comment is well-taken here. But I think that in Japan’s case, the support for the conservative LDP/bureaucracy/business establishment has been broader than “white collar” or “upper middle class”. If your business card said Toyota, the color of your collar didn’t matter. And with a rapidly expanding economy, there was more urgency to the “hire” side of the hire-and-fire equation. No law court can protect jobs from bankruptcy, but seasonal workers and first-generation immigrants from the rural areas (when rural areas were truly rural) had a place to go back to, family ties that served as a social safety net in the meantime. These and other conditions have changed over the years, and Japan is now in a difficult period of transition. The courts can change their views on the sanctity of the employment contract, but only if there is a clear national consensus on the point. In which case, of course, simple legislation will take care of the problem before the court does, as happened with regard to tenants’ rights.