Dogs and Demons

15. To Change or Not to Change

The question at the beginning of the twenty-first century is: Can Japan change? The picture is not without hope. Japan has made abrupt about-faces, to the point of completely reinventing itself twice during the past 150 years, and could possibly do so again. But what if Japan cannot change? In seeking an answer, let's take another look at the bureaucracy.

Bureaucracy is the core institution of government, for its mission is to intelligently allocate the resources of the state. If it provides that service efficiently, it does its job. Japan's bureaucracy, riven with corruption and guilty of massive misallocation of funds in almost every area, fails this simple but crucial test. An indurated bureaucracy is Japan's single most severe and intractable problem, responsible for bringing the nation to the brink of disaster in the 1990s. The Ministry of Finance, for all its mistakes, is just one of many government agencies, and the damage it has done cannot compare with the Construction Ministry's burying the nation under concrete, the Forestry Bureau's decimating the native forest cover, the Ministry of International Trade and Industry's needlessly damming the Nagara River, or the Ministry of Health and Welfare's knowingly allowing 1,400 people to become infected with AIDS. So angry is the public that the last decade has seen bookstores overflow with books attacking officialdom, from Asai Takashi's 1996 best-seller, Go to Hell, Bureaucrats!, to Sumita Shoji's 1998 The Wasteful Spending of Officialdom. The public is ready for change.

During the past few years, it has become fashionable to speak of Japan's «three revolutions.» The first occurred after 1854, when Commodore Perry arrived with his «black ships» and forced the opening of Japan. Within twenty years, Japan discarded a system of feudal rule that went back almost eight centuries, replacing it with a modern state ruled by the army, wealthy businessmen, and government officials.

After the nation's defeat in World War II, a second revolution took place, under the guidance of General Douglas MacArthur and the U.S. Occupation. MacArthur dismantled the army and broke the power of the prewar capitalists – and in their place the bureaucracy took over, creating the Japan we see today.

It's now time, many believe, for a third revolution, which will differ from the previous two in one important way: pressure from foreign powers sparked both of the earlier revolutions; they did not spring from among the Japanese themselves. This time around, however, there is no foreign pressure. Nobody outside Japan is concerned about the fate of its mountains and rivers; nobody will arrive in a warship and demand that Japan produce better movies, rescue bankrupt pension funds, educate its children to be creative, or house its families in livable homes. The revolution will have to come from within.

It could. Dissatisfaction is rife, as may be gleaned from the many angry and frustrated people who are quoted in this book. Some readers might wonder how I can say such harsh things about Japan. But it is not I who say these things. Fukuda Kiichiro calls Japan a Kindergarten State, and Fukuda Kazuya asks, «Why have the Japanese become such infants?» Kurosawa proclaimed that Japanese film companies are so hopeless they should be destroyed. Asai Takashi titled his book Go to Hell, Bureaucrats! Nakano Kiyotsugu complains, «I don't know why, but invisible rules have grown up everywhere,» and Professor Kawai carries this much further in his report to the prime minister, declaring that Japan's society is «ossified,» and that conformity has «leached Japan's vitality.» Dr. Miyamoto Masao describes Japanese education as «castration»; Inose Naoki compares Japan's environmental ills and bad-debt crisis with the unstoppable march to war in the 1930s. The people of Kyoto rose up and fought the construction of the Pont des Arts. In short, there is a strong and vocal body of opinion within Japan that recognizes its troubles and is increasingly prepared to fight for change. In this lies great hope. The question is whether the mood of dissatisfaction will ever gain enough momentum to seriously affect Japan's forward course. One can make good arguments for revolution, and – sadly – even better ones for another decade or two of stagnation.

In the realm of politics, the early 1990s saw unprecedented anger within an electorate that was among the world's most docile. In 1993, the ruling Liberal Democratic Party (LDP) lost its majority for the first time in forty years, and an opposition coalition, led by Prime Minister Hosokawa, took over briefly. The opposition, however, was no match for the bureaucrats. When Hosokawa sought financial information from the Ministry of Finance, the bureaucrats stalled, and there was nothing that the prime minister's office could do. Within six months, Hosokawa was out, and former members of the LDP, now scattered into a number of splinter parties, took over again. The electorate settled back into apathy, and at present the old LDP stalwarts are firmly back in power, beholden as before to bureaucrats and large businesses. In the political sphere, the score is Status Quo 1, Revolution 0.

One of the sharpest observations made by Karel van Wolferen is that the Japanese bureaucratic system has never relied on public approval for its legitimacy and power; it works in a separate dimension, far above and removed from the democratic process. As we have seen, even when voters do oppose ruinous construction projects and sign petitions requesting referendums, local assemblies are free to ignore them, and usually do. Outside observers see criticism in the media and hear complaints from average Japanese, and jump to the conclusion that these feelings will be translated into political action. The dissatisfied Japanese people are going to rise up and take matters into their own hands! But so far this has never happened.

Nevertheless, there is movement below the surface. Despite what Marxist theory tells us, the masses rarely start revolutions. The instigators tend to be the educated middle class and disgruntled low-level officials, what one might call «the soft underbelly of the elite» – and the soft underbelly is hurting. Since the publication of Lost Japan in Japanese, I am sometimes asked to speak on panels or write for specialist publications, even to act as a consultant to government agencies. What I have found is that the mid-levels of many organizations – mostly people in their forties – are disillusioned and frustrated by their inability to make changes. Mid-level disillusionment is a highly subjective area. There are no statistics on this subject, and elite-track officials and company employees don't write books and articles, which leaves me with very little in the way of published quotable material. I have only my own experiences to go by.

In 1994, I wrote an article lambasting the dreary displays and shoddy interiors of the Ueno National Museum. Soon afterward, at an opening, I met one of the top officials in the agency that runs the museum. He approached me, and I steeled myself for an angry denunciation of my article-only to hear him say that he personally thinks the mismanagement of Japanese museums is a disgrace. But despite his lofty position in the hierarchy there is little he can do. At the moment, the «soft underbelly» is hurting, but even elite managers are powerless against the inertia of their agencies.

The same official did manage to bring in a team of experts from the Smithsonian to give advice on modern museum management. To put most of that advice into practice he will have to wait – as enlightened middle-level bureaucrats and executives across Japan are waiting – for stodgy seniors to retire, or for their department to fall into such disarray that they can finally seize the initiative. This group of would-be reformers are like Madame Defarge in Dickens's A Tale of Two Cities, a secret revolutionary who sat for years in her tavern quietly knitting the names of hated aristocrats into her shawl. When the revolution finally came, she took her place at the foot of the guillotine, counting as the heads rolled. A lot of people in Japan are waiting to count heads.

You can hear the drumbeat of coming revolution in the rising level of anger in public opinion, fueled to a great extent by the sheer embarrassment of falling behind. There is considerable chagrin as the gaps between Japan and the United States, Europe, and newly wealthy Asian states widen. The thrust of the educational system is to make people highly competitive, and the hierarchical social structure gets people into the habit of ranking ethnic groups and nations as «higher» and «lower.» Naturally, they would like to stand at the top of the pyramid, and this leads to obsessive comparisons between Japan and other countries. This is where the frustration comes in.

When millions of Japanese travel abroad and return from Singapore's beautiful and efficient Changi Airport to the grim environment of Narita, the disparity is too strong to ignore. The decline of the Tokyo stock market, against a backdrop of explosive growth in New York and London, has been an agonizing spectacle for Japan's financial community. By the end of the century, Chinese-directed films featuring major Hollywood stars regularly took top spots in American box offices, and Chinese stars had become household names; in contrast, Japan's greatest success was Pokemon, a movie for ten-year-olds. The Japanese sense the contrast between the bright lights and excitement outside, and the mediocrity inside. They are embarrassed.

Yet while the groundwork exists, there is no assurance that the revolution will come. Against the dissatisfaction felt by the public is arrayed a complex system of bureaucratic control, infinitely more subtle than anything ever achieved in Russia or China in their Communist heydays. In order to visualize what is involved, let's do a «thought experiment» and ask ourselves what it would take to dismantle just a few bricks of the bureaucratic edifice – the system of licenses for aerobics instructors, for instance. The mind's screen goes blank, because the scenario whereby the Japan Gymnastics Association, the Central Association for Prevention of Labor Disabilities, and the Japan Health and Sports Federation will voluntarily disband and give up their lucrative permit businesses is simply unimaginable. What, then, can be done about the tens of thousands of other agencies and special government corporations – all working in secrecy and against whose fiat there is no recourse?

The public may be able to combat the bureaucracy over certain high-profile projects such as the Pont des Arts, or well-publicized scandals such as dioxin contamination. But power lies in the details, in the thousands of tiny Pont des Arts-type monuments rising quietly in every city and hamlet, in the myriad unreported dump sites not covered by the media, and deep in the impenetrable thicket of regulations in the form of unwritten «guidance» hemming in the life of the nation.

For those who hope that Japan is headed in the direction of greater freedom, it is sobering to see how brand-new industries create cartels in the old pattern. The Internet? Providers established the Japan Network Information Center (JPNIC) as the entity that approves new domain addresses. The JPNIC set to work right away, putting up the same barriers to outsiders and upstart businesses that we find in older cartels. For example, the JPNIC does not approve addresses unless they use Japanese Internet providers-despite global guidelines worldwide that say local authorities shall show «no preferential treatment for customers of a particular data network.» It's the old game of using a cartel to keep the foreigners out. Meanwhile, the JPNIC raised registration fees to the point where it costs four times more to list a new domain than it does in the United States. The result of battening down the windows to the Internet- the very room that everyone thought was going to bring fresh air into Japanese industry – is that by 1998 Japan had only 0.3 percent the number of domains in the United States, and ranked twenty-first in the world for domain names per capita. Multiply this cozy cartel by a million, and you'll get a sense of the complexity and power of the system. Seeking to reform the gigantic structure of the bureaucracy is a project overwhelming in its scale, involving nothing less than a radical change in social mores; the entire country would be turned upside down and inside out. That is exactly what Japan's leaders dread: they fear that if they make too many changes the whole jerry-built edifice of bureaucratic management will collapse and the nation will sink into anarchy. This anxiety acts as a powerful brake against change. For the moment, Madame Defarge faces a very long wait.

There has been much talk in recent years of Kaikaku, «reform,» and while the bureaucracy has made a few timid steps toward reform, especially in finance and trade, Kaikaku is hampered by one major flaw: it aims, by and large, to shore up the status quo. Bureaucrats find ways, in classic Dogs and Demons fashion, to make small, nonessential changes, rather than tackle serious structural problems both in the industries they control and in their own systems of management. The phrase Kisei Kanwa, used for «deregulation,» is highly symbolic, for it means «relaxation of the rules.» It does not imply a discarding of the rules.

Here's how it works. Gas prices in Japan average 2.7 times world levels due to a law forbidding direct import. After 1996, deregulation allowed JAL, the national airline, to buy fuel abroad – but JAL cannot use this gas on domestic routes, and sulfur- and lead-content standards are designed to exclude South Korean gas. Contractors, pressured by the cartels they belong to, will not unload shipments bought through newly opened channels. Even after deregulation, foreign gas still cannot enter Japan directly.

In 1997, Japan finally legalized transplants from brain-dead patients. The «legalization» involved so many compromises and restraints that two years later only one liver transplant and one heart transplant had taken place. Although the law has changed, dozens of desperately ill patients continue to raise money to travel abroad for organ transplants, as they have been doing for decades. For all intents and purposes, such transplants remain illegal in Japan.

In response to strong public discontent, the government set gyosei kaikaku, «administrative reform,» as a priority for most of the 1990s, but the real work in dismantling the top-heavy edifice of Japanese officialdom lags. Instead, in a titanic demonstration of tatemae conquering honne, much of the effort has gone into renaming the ministries. As of January 2001, several ministries have changed their names (and some have disappeared, subsumed into larger entities). For example, the Construction and Transport ministries are being combined with the National Land and Hokkaido Development agencies into a Land, Infrastructure, and Transport Ministry. At tremendous expense, these new ministries will shuffle personnel and departments between them, setting up new signs and offices to indicate their new functions-and then will go on to do business more or less as before. Halfhearted reforms such as this are endemic, and highly deceptive, if taken at face value. As for the investigations and scandals in government ministries, once public anger dies away, it's back to business as usual. «Reform» of this nature would be called «stagnation» in any other country.

William Sheldon, famed for his studies in anthropometry, drew a distinction between two fundamental types of human psychology, inspired by the mythical Greek brothers Epimetheus and Prometheus. Epimetheus always faced the past, while Prometheus, who brought fire to mankind, looked to the future. An Epimethean values precedent; a Promethean will steal fire from the gods if necessary in order to advance humanity's progress. In thinking about Japan's future, it's a good idea to briefly step aside from the mechanisms of bureaucracy and politics and look at psychology.

So far, the psychology of reform has been almost exclusively Epimethean: forced by public opinion, bureaucrats make minimal, often purely symbolic changes, while exerting most of their energies to protect the status quo. Reforms look backward, toward shoring up established systems, not forward to a new world. In general, Japan has settled comfortably into an Epimethean mind-set, and this is central not only to reform but to the overall question of how Japan failed to become a modern country. Modernity, if nothing else, surely means a love of the new. However, as we have seen repeatedly in this book, if new technology was not aimed at export manufacture – like cameras or cars – it never took root. Society frowns on people who steal fire from the gods. Too much fire too fast would undermine the role of officials in the Cold Hearth Agency, who tell people what to do with their flameless hearths, and it would bankrupt the powerful Hot Stone Cartel, whose existence depends on a lack of fire.

At the moment, the trend is toward an increasingly Epimethean bent. Change will get harder, not easier, as the population ages. At the very moment when Japan needs adventurous people to drastically revise its way of doing things, the population has already become the world's oldest, with school registrations on a strong downward curve. Older people, by nature, tend to be more conservative than young ones, and as they tip the balance of the population, it will be harder to make changes.

Meanwhile, youths, whom one would ordinarily expect to be full of energy and initiative, have been taught in school to be obedient and never to question the way things are. Young people are thinking about shirts printed with bunnies and kitties – with platform shoes to match, and some really amazing makeup and hairdos – rather than about heavy issues like the environment.

Epimethean nostalgia for the past is a natural reaction in Japan, for many of the systems that now slow the nation down were the source of its success only a decade ago. One cannot underestimate the shock that true globalization would bring to a social system and economy like Japan's, which depends so much on being cut off from the world. Mikuni Akio writes:

Under great economic and political pressure, foreigners have been allowed into certain designated sectors of the economy [such as Nissan Automobiles and Long Term Credit Bank]. The government is finding it an expensive proposition to compensate those hit by this first taste of genuine market forces, and understandably quails at the prospect of pacifying the millions who would suffer in a full-scale opening of the economy. Opposition in Japan to further liberalization, deregulation or globalization is thus steadily gathering momentum.

So strong is the longing for the past that there is a good chance that Japan will turn reactionary. The success of the rightist politician Ishihara Shintaro, the author of the popular Japan That Can Say No series and the mayor of Tokyo, augurs for a political step backward, not forward. Ishihara and his group blame Japan's troubles on evil foreigners, especially the United States. In academia, a quiet sea change is taking place. In the decades after World War II, leftists and rightists argued heatedly over national policy, with leftists often wielding the upper hand in the control of universities. However, by the end of the 1990s the leftists were in full retreat, and nationalist thinking took over the academic vanguard. The new nationalism may prevent Japan from looking inside at what the nation has done to itself.

A popular argument among Japan watchers is that as Japan becomes more international, people's perceptions will gradually come to harmonize with the outside world. There is some truth to this, for while internationalization at the official level has largely been a conspicuous failure, millions of Japanese have traveled and lived abroad. Every organization has at least one, and maybe even dozens of people, with international experience working within its ranks.

On the other hand, it was perhaps naive to imagine that foreign travel would broaden Japanese horizons. One of the most remarkable phenomena of the 1980s and 1990s is the creation of special worlds abroad made just for the Japanese. Most Japanese tourists travel in groups, and their itinerary consists of a «package» – including attractions, hotels, and restaurants that cater only to them. In Thailand, for example, the Japanese have their own entertainment street lined with «Members Only» signs, and even their own crocodile farm, which insulates them from having to deal with Thais and tourists from other countries who visit the ordinary crocodile farms.

Recently, an interviewer questioned veteran Japanologist Donald Richie about a statement in his book Inland Sea (1971) in which he predicted that as the Japanese traveled abroad in greater numbers, they would become more like everybody else. Richie replied, «I meant that when people got out and saw how other people lived and felt, they would not be able to come back with any complacency. I was exactly wrong. I hadn't envisaged Jalpak. The Japanese go abroad in a package; they have their own crocodiles, and their own flags and their own must-see stops. This is the way the vast majority travel, and they are not touched.»

As for refugees and longtime expats leaving Japan, few will mourn their exodus. Their departure from Japanese shores serves only to remove destabilizing influences, and well-heeled «international departments» will quickly replenish the missing foreigners with new ones, better behaved and more manageable than the old. «What is in store for Japan?» asks Kamei Tatsuo, the former editor of the influential opinion journal Shincho 45, with an ironic smile. «We will go back to sakoku of the Edo period. We Japanese like it that way.»

How on earth did Japan get itself into such trouble? Iida Hideo, a finance lawyer, describes what he calls the Boiled Frog syndrome: «If you drop a frog into a pot of boiling water, he will jump out immediately and be saved. If you put him in warm water, he feels comfortable and does not notice when you slowly raise the temperature.» Before the frog knows what is happening, it's cooked.

The Boiled Frog syndrome is what comes of failing to change as the world changes. Techniques such as tobashi keep the water lukewarm, hiding disastrous mistakes. The policy of shoring up insolvent firms and wasteful government agencies at public expense creates no incentive for those in charge to rethink their mistakes. Meanwhile, the government croons the public to sleep with reassuring lullabies about Japan's unique form of government by bureaucracy, and its superiority over the degenerate West, exemplified by Sakakibara Eisuke's book Japanese-Style Capitalism as a Civilization.

Death at a slow boil is also behind the sad condition of Japan's rivers, mountains, and seashores, as well as the landscapes of towns and cities. Ill-planned development, monuments, and bizarre public works have ravaged all these parts of the national heritage-but the heat doesn't scald, because the propaganda of «ancient culture» and «love of nature» continues to lull the public into blissful unawareness.

Radical change will come only when conditions have grown completely intolerable, and in Japan's case that day may never come. To put Japan's financial troubles into context, we must remember that it remains one of the wealthiest countries in the world; the bankrupt banks and deflated stock market are not going to deprive most people of their television sets, refrigerators, and cars. From this point of view, Japan remains a reasonably comfortable place to live.

In using the word «comfortable,» I would never suggest that Europeans, Americans, or most middle-class Southeast Asians envy such a lifestyle. For the Japanese, cramped low-quality housing, lack of time for private life, and a degraded environment in cities and countryside are so all-pervasive that most citizens can hardly imagine an alternative. Goals set in the 1950s and 1960s – to own television sets, toasters, and cars – froze to where even now they define the limits of Japanese modernism. As long as people get to keep their toasters, very few will complain if it becomes a little harder to buy a house, or their companies make more severe demands on their time, or their surroundings get a little uglier. Such things seem such a normal, even predestined and unavoidable part of life that it is hardly worth thinking about. Japan has trained its population to believe in the old military virtues of hard work and endurance. Hence people will bear hardships without necessarily asking how they might avoid or decrease them, especially if the hardships are quiet in the coming.

The best word to describe Japan's modern plight is Chuto Hanpa, which means «neither this nor that» – in other words, mediocrity. Stunning natural scenery exists, but rarely does it truly uplift the heart, for somewhere in the field of vision the Construction Ministry has built something hideous and unnecessary. Kyoto preserves hundreds of temples and rock gardens, but a stream of recorded announcements disturbs their meditative calm, and outside their mossy gates stretches one of the world's drearier modern cities. The educational system teaches children facts very efficiently, but not how to think by themselves or to innovate. The nation has piled up more savings than any other people on earth, and at the same time sunk into a deep quagmire of personal, corporate, and national debt. Everywhere we look is the same mixed picture – that is, Chuto Hanpa. Japan's ability to rescue itself will depend partly on the rate of technological advance in business, but here, too, Chuto Hanpa rules. Despite an industrial structure aimed single-mindedly at international expansion, there is no question that, technologically, Japan fell behind in the 1990s. Again and again, Japanese firms and agencies were slow to see that their industries were entering new paradigm shifts – for example, the shift in television from analog to digital. In the early part of the decade, MITI encouraged electronic firms to pour billions into developing high-definition television based on analog technology. It seemed that another Japanese monopoly was about to be established – and then a small Silicon Valley start-up figured out how to do it digitally, and all the money went down the drain overnight. That Japan bet wrong was merely unfortunate; the most telling aspect of these fiascoes is the attempt by government to force people to continue in the use of clearly outmoded technology. A similar pattern afflicts medicine, where, in an effort to protect domestic pharmaceuticals, the Ministry of Health and Welfare refuses to approve foreign drugs. As a result, the Japanese are denied medicines that are in common use around the world for the treatment of arthritis, cancer, and numerous other ailments from headache to malaria. Rather than use a foreign drug with proven value, the MHW encourages local firms to produce copycat medicines with little or no efficacy and sometimes with terrible side effects. These are known as zoro-yaku, «one after another medicines,» because firms put them out one after another. In order to protect the zoro-yaku business, the MHW collaborates with drug companies in hiding deaths from side effects. In one notorious case in the 1980s, the MHW allowed drug firms to continue distributing a zoro-yaku polio vaccine even after it had killed dozens of children, the aim being to protect the makers from the financial loss of recalling unused supply After decades of producing zoro-yaku, and failing to test or monitor medicines properly (the United States' FDA has a hundred drug inspectors, while Japan's MHW has two; the FDA has elaborate drug-testing protocols, while the MHW has none), Japan's pharmaceuticals are hopelessly behind in technology and today have only a tiny international presence. Where the big European and American drug makers are inventing revolutionary treatments for arthritis, Alzheimer's disease, and cancer, not to mention drugs like Viagra and Rogaine, Taisho Chemical, one of Japan's major pharmaceuticals, is pinning its hopes for foreign expansion in Asia on Lipovitan D, a sweet tonic drink that has no medicinal benefit. The very existence of a word like zoro-yaku should set off alarm bells for those who believe that Japan is dedicated to technological advancement. Medicine and biotechnology rank among the biggest growth industries in the world – and Japan is missing the boat. Computer software is another major business that Japan has neglected to develop. Japan imports leading-edge software from Microsoft, Apple, and Oracle; it exports computer games for children. Most surprisingly, Japan also failed to make the leap in chip manufacture, once an area of great strength. Manufacturers did not advance from DRAM production to microprocessors, and thus abandoned the high end of the industry to Intel. Korea and Taiwan, meanwhile, have moved in from below and are eating the Japanese alive at the lower end of the chip business. By 1999, all of Japan's major chip makers were reporting huge losses, while American and other Asian manufacturers had a bumper year. In the area of satellites and rockets, Japan's NASDA space agency, after spending billions of dollars to develop a «Japan-only» rocket, has suffered a humiliating series of failures, most notably in November 1999, when the launch of an H-2 rocket went so badly that ground control had to order it to self-destruct. All this said, the Japanese have one of the world's most sophisticated industrial infrastructures, which annually runs a huge balance-of-trade surplus with the rest of the world. Sony's visionary leaders created a truly international corporate culture that continues to make world-class innovations. The Japanese have commanding leads in LCD screen technologies, as well as in numerous niche fields in precision machinery. So secure are Japanese monopolies in certain specialist components that hardly a computer or advanced industrial device can be built without them. Steel firms and shipbuilders boast some of the world's most efficient factories. Car manufacturers, though greatly weakened, are still a towering presence in world markets. It's a story of strengths inherited from the industries of the 1970s balanced against severe weaknesses in the industries of the new millennium. Technology in Japan is good, but not nearly as good as was once thought; it's «neither here nor there» – that is, Chuto Hanpa. Because of this mix of qualities, Japan will not crash. There is more than enough industrial power to support the population at roughly present standards. On the other hand, given its deep systemic weakness in finance and technology, Japan is not going to boom. The long-term prognosis is for more Chuto Hanpa, with GNP growth slow, unemployment edging upward, and the debt burden mounting year by year.

Part of the undertow against change is Japan's dream of becoming the leader of Southeast Asia. The old desire for empire, previously called «the Greater East Asian Co-Prosperity Sphere,» never completely faded, and in recent years it is enjoying new life. Japan is pouring huge amounts of industrial capital, ODA funds, monetary loans, and cultural grants into Southeast Asian nations in the hope of integrating Thailand, Malaysia, Indonesia, and other nations into a new Asian bloc, with Japan at the helm. The dream is that Southeast Asia will join hands with Japan and act as a new engine for industrial growth; Japan will then take center stage once again, and all the old policies will be vindicated. Typical of the group of theorists beating the drum for a new co-prosperity sphere is Professor Shiraishi Takashi of Kyoto University's Centre for Southeast Asian Studies, who argues that Southeast Asia at the dawn of the new century must now «choose» between the United States and Japan for its model and controlling partner. The choice, of course, should be Japan. Shiraishi represents a strong body of academic and official opinion that is angry at foreign criticism of Japan, especially what Shiraishi calls «stereotypical Anglo-American triumphalist statements that both the Japanese model and developmental authoritarianism are now bankrupt.» He longs for the old days when Japan produced an economic miracle without having to update or rationalize its internal systems. «Free-market ideas of legal contracts, impartial regulations, and transparency are all fine, and perhaps these are all portfolio investors need,» he says with some bitterness. «But can we rely safely on markets for long-term investment for industrialization, technological development, and, above all, human-resources development?» Shiraishi's question – what to rely on? – touches on many of the questions raised in this book. The value of free markets is only one issue; there are numerous others, such as the role of bureaucracy and the importance of clear and correct information to the efficient running of a modern state. Getting Southeast Asia to «choose now» between the United States and Japan is Japan's last big bet at the beginning of the twenty-first century. Perhaps Japan will indeed win the bet and succeed in reviving its old hegemony over Southeast Asia. Backed by new industrial might based on control over Southeast Asia, and with a whole new continent of rivers and valleys to profitably cement over, Japan's academics and bureaucrats will not then feel that they need to give a backward glance at home to ravaged cities, sterile countryside, and a culture of big-eyed baby faces. All complaints can be easily dismissed as «Anglo-American triumphalism,» and Japan can revert happily to business as usual. Perhaps, but then again, perhaps not. For one thing, Southeast Asian nations may not feel that their only choice is between the United States and Japan, or that they have to make a choice at all. The world is a far more complex place than Shiraishi dreams – including a newly unified Europe, a powerful China, and wealthy tigers and dragons in Asia itself, such as Hong Kong, Singapore, South Korea, and Taiwan. Meanwhile, Japan's internal problems affect its position in Southeast Asia, as the elites of these countries discover that Japan is not the cultural or economic paradise they expected. «Korean business is following America rather than Japan,» says Kang Dong Jin, director of Paxnet, a South Korean financial-information Web site. «Korea has seen America enjoy a decade of prosperity and Japan the opposite, so in some ways the choice is easy.» Foreign observers, Western and Asian alike, are asking whether ideal "human-resources development" means millions of construction workers flattening valleys at government expense- and lackluster tourist and software industries. When Thailand's telecommunications agency suffers huge losses from being forced to install the failed PHS cellular system; when educated Indonesians like Yau-hua Lim start saying, «The Japanese have such pathetic lives,» hopes that the leaders of Thailand and Indonesia will «choose» Japan as their preferred and exclusive model dim. The Asian Bet, like many other modern Japanese policies, is likely to turn out neither heads nor tails but something in between-that is, Chuto Hanpa. Japanese industry already has a huge presence in Southeast Asian nations, and Japan's voice in policy is likely to grow. On the other hand, it's doubtful that these nations will sign on the dotted line to unquestioned Japanese leadership.
For the next few decades, Japan has enough savings to coast on. This is Japan's tragedy, for only bankruptcy could shock people out of Chuto Hanpa. After the Asian crisis of 1997-1998, Korea, which did not have the luxury of relying on its savings, was forced to make major structural changes. By 1999, the results were making themselves seen in a jump in growth and a revivified political life. However, Japan has not yet suffered such a shock, and despite the loud calls for change, one cannot underestimate the public's complacency. Schools have taught people to ask few questions and to follow a routine, to «endure.» The propaganda machine continues at full tilt, with the voice of Hal reassuring everyone that the rivers and lakes are beautiful, the banking mess has been cleared up, recovery is around the corner, Japans «unique model» is superior and will lead Asia, have a nice day. Children who have grown up in the Chuto Hanpa environment of Japan's cities and countryside reach adulthood knowing of no other way to live. The feeling that it is «too late» exerts a psychological undertow in all Japan's cultural and environmental movements. People naturally wonder what is the merit of enacting new zoning and environmental legislation when the cities and countryside have already been damaged almost beyond repair. What it would take to restore Japan's rivers, mountains, and seaside to ecological health boggles the imagination. What do you do? Strip cement away from river bottoms, grow vines over concrete embankments, cut down the sugi cedar plantations? How will you keep the vast number of people who depend on construction employed? These are difficult questions, and only a determined few have the bravery to face them. Meanwhile, the bureaucracy continues on autopilot for one simple reason: the funds are still flowing. There is no lack of money to continue to build highway loops in the shape of eight-headed dragons and fill in a few more meters of Osaka Bay. Foreign economics experts insist that Japan «must» rein in its overspending on construction, but why must it? The country is eating into its savings-of this there is no doubt. But for the time being there are still trillions of dollars of assets in savings, much of it deposited in the postal-savings system, one giant piggy bank for the bureaucrats to play with. At the turn of the century, hopes for the future remain balanced between revolution and stagnation. Stagnation is most likely in the absence of a major shock to the system, such as a wholesale economic crash. But revolution could happen. The world is full of surprises – who would have imagined in 1985 that by 1990 the whole of Eastern Europe would have shaken off Communism? It is exactly such a surprise that millions of Madame Defarges are quietly waiting for. Sadly for Japan, a crash is highly unlikely. The chances are that for the next decade or two there will never come a moment when the nation stares disaster right in the face. The water will remain lukewarm, and the public will sleep comfortably in a soup of Chuto Hanpa while their country slowly degenerates. When it comes time to carve the epitaph for «Japanese-style capitalism as a civilization,» the legend on the tombstone will read «Boiled Frog.»