New Part Three - July 6:
James Fallows
Alex Kerr
Part Two - June 26:
James Fallows
Alex Kerr
Part One - June 21:
James Fallows
Alex Kerr
Alex Kerr, educated at Yale, Oxford, and Keio universities, is the author of many monographs and articles in both Japanese and English. His last book, Lost Japan, originally written in Japanese, was the first by a foreigner to win the Shincho Gakugei Literary Prize for nonfiction. He lives in Kyoto and Bangkok.
James Fallows is The Atlantic's national correspondent and the author of Breaking the News: How the Media Undermine American Democracy (1996) and of Free Flight: From Airline Hell to a New Age of Travel, published this month. To learn about his new book and look through an archive of his recent articles, visit jamesfallows.com.
Previously in Fallows@large:
Working Classes (May 2, 2001)
An e-mail exchange with Barbara Ehrenreich, author of Nickel and Dimed.
The Work of Words (February 21, 2001)
An e-mail exchange with Christopher Hitchens, author of Unacknowledged Legislation and would-be prosecutor of Henry Kissinger.
Darwin Had It Backwards (January 17, 2001)
An e-mail exchange with Joseph J. Ellis, author of Founding Brothers: The Revolutionary Generation.
More by James Fallows
More on books
More on foreign affairs
Join the conversation in Post & Riposte.
Atlantic Unbound | June 26, 2001
fallows@large |
Dialogues with James Fallows
.....
From: James Fallows
To: Alex Kerr
Subject: The true Japan - Part Two
Dear Alex:
Ah, the weather paragraphs. It all comes back to me now! When my family was living in Yokohama, my wife and I used to marvel at the ways in which we would unknowingly blunder each day. One of them that took me months to figure out was my failure to include preliminary chat about the weather in the first few moments of meeting a Japanese person or the first few lines of a letter. Have you read Edward Seidensticker's collection of essays, This Country Japan? It's been almost fifteen years since I looked at it, but I think I remember one poignant chapter composed of fictional letters between a young Japanese woman and an older American man. Each letter began, of course, with a discussion of the season. These served as markers for the change from springlike warmth to chill between the two of them.
So let me say that it is delightfully sunny now in Berkeley, as it is through most of the year, but as I look across the San Francisco Bay toward the city, I can see the evening bank of fog beginning to move this way. Midsummer can oddly be the coldest season in San Francisco. As the sun beats down on the interior valleys of the state, just beyond the gentle Berkeley hills, it superheats both land and air and creates rising currents, which in turn draw in the cool, cloudy air from the sea. Already the tips of the Golden Gate are the only part of the bridge visible above the fog, and Alcatraz is about to disappear. Yet when I think of the clammy misery of the tsuyu, or month-long "rainy season" that must be underway in Japan just now, I am newly grateful for the comforts of the coast on this side of the Pacific.
Enough of that! For this installment I'd like to take you in a slightly different direction, away from specific discussion of your book and toward larger explanation of what's been happening in Japan. What I'll be asking about is indirectly connected to your book, since after all you are describing how Japan struggled to "catch up" economically with the Western world and what happened when it did. But I'd like to summon you as a kind of expert witness. You've been in Japan during its economic ascent in the 1980s and its perceived stagnation, even collapse, since then. Let me tell you what I find puzzling about this sequence, in hopes that you can tell us how it has looked on the scene.
Let's step back fifteen years. You probably remember, but many readers won't, that in the fall of 1985 the "Plaza Hotel Agreement" began an enormous change in relations between Japan and the rest of the world. Through the early 1980s, Japan was piling up trade surpluses like crazy. The yen was still cheap—an incredible 250 or so to the dollar! At the Plaza Hotel, James Baker, then the Treasury Secretary, agreed with his Japanese counterparts to start moving the yen up and the dollar down. (His main counterpart was Noburu Takeshita, Finance Minister of the time, later Prime Minister, epitome of the deal-making, patronage-dispensing career Japanese politician.)
Less than a year after the Plaza agreement, the yen had doubled in value against the dollar. I know! I'd calculated all my expenses for living in Japan in the summer of 1985, at 250-per-dollar, and when I got there in early 1986 everything cost twice as much as I expected (or could afford).
The point of jacking up the yen's value was, of course, to try to equalize trade flows—fewer Toyotas into the United States, more Intel chips into Japan. But its main effect was for a brief time to make Japan seemingly the richest, and certainly the costliest, nation on earth. With their mighty yen Japanese corporations could buy up French art, American companies, Asian resorts, and practically anything else they chose.
What they didn't do, contrary to most expectations, was start importing dramatically more or exporting dramatically less. Exactly why this was so is part of what I want to ask you about. But nearly everything about subsequent Japanese history seems traceable to those two or three years after the Plaza agreement, when Japan became on paper stupendously rich but didn't behave the way the world's finance ministers had foreseen.
How is it traceable? Well, that's what the argument is about. Let me tell you, first, what conventional American wisdom now holds; then give you my hypothesis, as someone who has not visited Japan in four years. Your job will be to tell us what has really gone on.
To the extent Americans think about Japan anymore, they think: it had its boom back in the 1980s, a lot of alarmists (like Fallows of The Atlantic) got worked up about Japan's potential, but since then it has fallen flat on its face as America has recovered. Japan is politically paralyzed, despite minor blips of excitement about reform; it has no influence in the world; no one pays attention to its pop culture; it can't clean up the bad loans from its banking system; its managers are killing themselves. Meanwhile, America is the undisputed world titan, the dollar is stronger than ever, we have led several waves of entrepreneurship and wealth-creation, and despite the recent slowdown we're in shape any other country should envy. In short: the idea that there was ever anything interesting, instructive, or above all menacing about the "Japanese model" is preposterous.
My own view, you won't be surprised to hear, is at odds with this. To my mind, the fundamental argument that began fifteen years ago was not whether the Japanese model of economics was superior to the Western model. Rather, the question was whether it was different. Now that Japan looks weak, everyone seems willing to concede that point. Sure, Japan is different—and worse! But at the time, "Japanese version of capitalism" amounted to fighting words. Everyone could agree that operational details and principles differed between Japan and America. Shareholders had much less influence in Japan. Government planners had much more. Consumers did well in the United States and poorly in Japan. The American ideal—as long as it could be sustained—was a trade deficit, since that allowed us to consume more than we actually produced. The Japanese ideal—as long as it could be sustained—was a trade surplus, since that allowed more people to stay at work than the country's own purchases could support.
The real disagreement about Japan was whether these differences should be taken as signs of Japan's "immaturity," which would by definition melt away as Japan converged on the American model. Or whether, on the contrary, Japan might for years and years operate an economic system that was recognizably capitalist but also different in its goals and methods from the American version.
I contend that the years have vindicated the "different system" rather than "converging systems" view of Japan. Some things have surprised me, compared to what I would have expected a decade ago. The improvement in America's overall social-political-productive fiber has been better than I expected—and better than practically anyone else foresaw. Hey, in 1994 Bill Gates didn't know the Internet was coming! I've been surprised by how fractious Korea has remained over the years. But the only thing that has surprised me about the Japanese system is that it is even more rigid than I had foreseen. A dozen years ago, mainstream American economists argued that Japan would "inevitably" switch to a more consumer-driven, open, liberalized economy. But the forces backing up the old, closed ways are even stronger than almost any observers claimed. The American press swooned in 1993, when Morihiro Hosokawa (remember him?) stormed in as a fresh, "reform" leader of the country. That "Tokyo spring" lasted about as long as the Prague Spring of 1968. And still the system grinds on: emitting exports, providing jobs, bilking its consumers, and creating adjustment problems (through chronic surpluses) for the world economic system.
In short: most of America sees Japan as a pathetic failure, a less threatening version of the old Soviet Bloc states. I see its struggles in the 2000s as directly connected to its allegiance to a "different" model of capitalism, and I still see little evidence that the models are about to converge.
So could you please tell us: How should we think about the past decade's worth of struggles in Japan? Does the latest political "upheaval" portend a more serious change? Are the chronically pent-up forces—unhappy "salarymen," unhappy women, unhappy and overworked students—sufficient to change the nature of the system now? Is the prevailing, dismissive view from the United States warranted?
As I turn from my computer, I see the sun, fat and red, slipping beneath the bank of fog to the west. Across the broad Pacific you are sitting in the rain. Glad there's no tsuyu here.
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