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January 25, 2011

Japan is still worth discussing

In today's world Japan is generally forgotten. Japan itself is to blame for that; its government and the elite cannot convince the people of the need to be more active in the world.
But just like in Europe, where England, France, Germany and others equally matter, Japan still greatly matters in Asia.

And Japan is a very unique historical specimen, an amalgam of many civilizations and values. It has been a very interesting observation point, which demonstrates how economic development modernizes values in the society.

Japan is still worth discussing and studying especially when you check the history and think about the perspective of the world civilization.

Below are several of those points.

In all intellectual gatherings and writings most people too easily take for granted the current way of Japan's being as a nation state, and formulate their opinion on a premise that the Japanese society and companies will remain a racially and culturally homogeneous entity. But things and values are becoming relative today, as if the ground were cracking open under our feet. What is the cause of this uncertainty? What kind of change will the statehood of Japan have to undergo? What should be the general direction for Japan, if it is allowed to remain as one monolithic entity?

Global vacuum of values
When Japan opened itself to foreign trade (in mid 19th century) and started industrialization in order to cope with the European colonialism, it also imported the European values: the concept of freedom by John Locke, egalitarianism by Jeremy Bentham, and the rule of law by Montesquieu and Jean Jacques Rousseau.

After industrialization these values took their roots in the Japanese society, and its people are enjoying the freedom to the fullest degree. I, for example, from the bottom of my heart propagated these values in Russia and Uzbekistan when I served as a diplomat. But in the Iraq War we witnessed how "democracy" was imposed by coercive means, and how some of the Western forces allowed themselves to cynical and amoral torturing.

Now many people in the world have realized that the values are relative; freedom, for example, is the privilege for strong and rich people. At the same time the life in the U.S. is becoming tougher, in which the charm of the "American way of life", the basis for its "soft power", is being worn away. And the U.S. government, flag-bearer of the market economy, now does not hesitate in providing huge subsidy to the private companies.

The European countries, where the afore-mentioned values were originally formed during the economic growth after the 17th century, are also undergoing profound deformation with a more pragmatic education in schools and with a huge influx of new immigrants, who do not share these values. Besides, reforms in their economy are not sufficient, and if Europe will lack in a sound economic basis for its prosperity, it will have a difficulty in upholding their values.

Democracy turned populism--political stalemate
Japan is a little different in this regard. Though the Japanese society is generally westernized, its democracy is diverse from the Western ones. If the Western democracies were originally formed to fare battles, be it with the king, or be it with other colonialist powers, and they are made to allow dynamic decision making with strong-willed leadership, the Japanese democracy reflect the rural community decision-making procedure. It has a strong propensity toward egalitarianism and almost socialist way of benefit sharing.

Therefore, even after the establishment of a centralized modern state in 1868 Japan never had strong leaders, and its leadership was always collective and amorphous. Nevertheless, Japan could fare in the world when its task was set from outside: be it coping with the Western colonialist powers, or be it to follow the suit of the U.S. foreign policy during the Cold War. But after the demise of the Cold War Japan was largely left on its own.

Exactly at this moment the frustration of the people, accumulated during the long-lasting recession, finally lead to the change of the ruling party in 2009. And this brought to the fore the pacifism and skepticism toward the U.S., which were deeply embedded in the minds of some part of the Japanese. I see that many old-guards of the student movement in late 1960s now take the front podium, thinking that their time has finally come (I did vote for the Democratic Party, but not for these revolutionaries).

The Japanese ordinary people started to assert their rights more, and to demand more transparency, accountability and competence from their government. The government officials have lost the authority which they had been enjoying all through the history. People's voices are guided and magnified by the mass media. Now all politicians have to obey (and not to lead) the voices of the society. Major elections take place almost every year and the winner party changes every time too often. The gridlock between the Upper House and the Lower House of the Diet has become a norm, clogging the decision-making.

Japan's populism is not an exception, and all developed countries are suffering from the same malaise. But Japan's case is outstanding because of the shortage of strong leaders and initiatives. The elite do have realistic strategies in their brains, but other parts of the intellectual circles strongly promote another set of strategies, and all of them have their hands tied by the "vox populi". Therefore, foreign policy is often decided not so much for the benefit of raising Japan's status in the world as for the sake of lifting the status of the ruling party within Japan.

Real globalization (Diaspora) of the Japanese companies and its bearing on the government
Japanese companies have been bearing a large part of the social welfare. Not to speak of the medical and pension fee, the life-time employment was a huge social benefit for their employees, and the corporate tax is one of the heaviest in the world. Today facing competition with China and South Korea, the Japanese companies are seriously considering whether or not to move their headquarters abroad.

As a stark difference from the past, the managerial staff of Japanese large companies is becoming truly multi-national. As compared to the cosmetic "internationalization" up to now, in which leadership of the company was kept to the Japanese, current globalization presupposes real multi-nationalization of the managerial staff and even transfer of the headquarters outside Japan. In other words some of the Japanese companies are ceasing to be mere interest groups of the life-time Japanese employees, becoming more open and dynamic entities.

In such companies the Japanese identity becomes thin (their managers may become "nomads" as Jacques Attali put it in his work "Millennium," [1990]), and they become virtual: a composite of cosmopolitan capital and multi-national managerial staff, unified under their brand's flag.

If this tendency becomes wider, the Japanese government will lose a large sum of its tax revenue and employment. Then what will be the status and the role of the government, and what will be the society like, losing a large chunk of its elite as Japanese staff abroad? Will the government become like an second-rate insurance company with permanent losses and like an ill-equipped security company?

Will this really happen? In any country the number of people who are willing to become "nomads" is rather limited, and the companies originated in the countries larger than medium size are still staying in their countries of origin.

If the status of "state" becomes relative, then the "strategy" will also change
The modern "nation state" was formed as a machine to directly collect tax and to recruit soldiers. In a way it was a war machine. Today, war is not needed to acquire colonies and wealth; the global free trade made it possible so that, if you possess capital and technology, you can obtain wealth. The main function of the state changed from being a war machine to social welfare. This change is most visible in Europe, where the nation states formed the EU, transferring a part of their power and financial resources.
Japan, too, would not need the classical form of a nation state: strong army, strong police and strong intelligence. Being dependent on the alliance with the U.S., and avoiding the burdens of being a classical type of nation state, it has been able to fully enjoy the fruits of the free trade system, which was also ensured by the power of the U.S.

Now Japan needs a stronger apparatus as a nation state in order to cope with the potential threats posed by rapidly growing Chinese military power. However, Japan should not overdo it. The majority of the Japanese prefer an approach balanced between two needs: engagement and hedging. Japan should stay on the course of less political confrontation and deeper economic cooperation.

If Japan manages to establish a more effective decision-making procedure, then it will be able to keep a sizable weight in the world just as Germany does now. The change of the ruling party in 2009, the ensuing confusion and several diplomatic mishaps may have made the Japanese people more realistic and mature about international politics. Japan's economy and its companies will still remain robust with population over 100 millions (though toward 2050 the people over 65-years old will constitute over 40% of the total population), with relatively high personal income and with technological edges. All in all Japan will remain to be a fairly important actor in the world, even if it may lose head offices of some companies.

The year of 2011 is the year of hare. Instead of making reckless leaps Japan should be intent on making steady reforms one by one, maintaining balance between the needs for even deeper globalization of its economy and the needs for social equity. It also should continue its efforts to keep the political stability and free trade in East Asia.

All this is easy to say, but will be hard to implement. But even today Japan is making large contribution in maintenance of balance of power in East Asia and the up-keeping of the functions of IMF and ADB (Asian Development Bank) in the current global financial crisis. Japan should not be overly dismissed. It still can produce positive differences for others. Anyway, in spite of all talks about stagnation the life in Japan today is full of amenity and vibrancy.


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