The Japanese Malaise

[thomas]

Excellent article by the Swiss Neue Zürcher Zeitung, 27 March 2002:

The Japanese Malaise

The Self-Doubts of an Insecure Nation

Urs Schoettli

Japan's protracted economic crisis is consuming the country's substance, not only in the material sense but increasingly also emotionally. A growing number of Japanese have doubts about their nation's future. The spreading malaise threatens to obscure the true proportions of the situation and to turn the country's decline into a self-fulfilling prophecy.

With increasing frequency in recent months, talks with Japanese of varying ages and a broad range of occupations has placed this correspondent in the position of the one trying to keep excessive pessimism down in evaluating current political and economic developments. Often I am asked whether I really have faith in Japan's future or if I am refraining from joining the general chorus of melancholy out of politeness, friendship or even self-deception. At any rate, the arrogance which was so much in evidence in the heyday of the "Japanese model," when people like Shintaro Ishihara foresaw a Nippon that would leave a decadent America in the dust, has long since evaporated. A mood shift as drastic as that among foreign economic analysts appears to have also occurred in the offices, bars and even homes of average Japanese. The fact that the hoped-for medals at the Winter Olympics in Salt Lake City failed to materialize only added to the general wintry gloom.

Painful Contrasts

Statistics as well as trips through the country indicate that the economic downturn so far has had a much greater impact on the provinces than on the capital. As I drive with a companion through the streets of Tokyo's Ginza quarter, busy and crowded in the evening, my friend is astonished at all the action. There are few signs of recession here, while in his hometown of Sendai after business hours one feels keenly that the "salary men" have much less money in their pockets these days than they did before. And strolls through Osaka's city center reveal striking contrasts. The homeless have disappeared from the streets around the massive and lavish municipal government buildings – doubtless partly with an eye to the forthcoming Football (Soccer) World Cup games. One shopping cart bearing the pitiful possessions of a homeless individual is parked against the imposing, timeless solidity of the Sumitomo Mitsui Banking Corporation's headquarters building. Like the bank itself, in the spacious halls of which no security guards are to be seen, this homeless person apparently feels that his private property is quite safe where it is.
Most of the fashionable clothing stores along Osaka's elegant shopping streets are empty, yet even the expensive restaurants seem to be busy enough. In one place, which features cultivated French cuisine, not a table is to be had at lunchtime. There are no men among the clientele, though, just young and a few middle-aged women all dressed in the latest fashions. In the evening, an elderly gentleman is bedded down on the wintry-cold sidewalk in front of a five-star hotel in the Umeda business quarter, his head resting on his briefcase, his glasses on his nose, his legs drawn up so as not to get in the way of passersby. He does not seem impoverished, has the same orderly, middle-class look as the countless suburbs that follow the railway line in almost unbroken succession along the Kyoto-Osaka-Kobe axis. Like so many other Japanese, he no doubt asks himself what has happened to all the old safety nets and why, in these turbulent times, the carefully nurtured civic virtues have suddenly ceased to matter.

Exhaustion or a Breathing Spell?

Osaka's skyline gives one answer to the question of what went wrong during the boom years. While the Sumitomos and Mitsuis – the classical samurais of Japanese business – impressed the public in the 19th and early 20th centuries with headquarters buildings which seemed built to last forever, the era of easy money brought the architectural extravagances of the nouveaux-riches. One can see in many of the post-modern monstrosities how the client insisted that money was no object and how the orders to throw the yen around was willingly obeyed by architects and builders with the requisite quantity of high-priced kitsch. Glass palaces standing half-empty, buildings put up for speculation and needing renovations after just a few years, a grandiose hotel closed due to bankruptcy – such things bear mute but concrete witness to what lay behind the billions in bad loans on which politicians and economic experts have been expending so much rhetoric in recent months.
Like all empires, the economic empire known as "Japan Inc." appears to have fallen victim to recklessness while at its zenith. As world history has demonstrated time and again, the fall from the pedestal generally comes more quickly than expected, after which there begins a long period of sobering-up and decline. As a rule the milestones and their causes are much more evident in retrospect than they were in the turbulence of the moment. Now that the Japanese malaise has lasted for about a decade, the search for causes is in full swing. Paul Scott, who teaches modern Japanese and Chinese history at Kansai-Gaidai University, has come up with a surprising question: Has anyone ever asked the Japanese whether they want to remain top dogs always or if they might not prefer to content themselves with what they have already achieved? Is Japan ready for the cultivated, subtle exhaustion to which the British Empire has fallen victim after two centuries of expansion, or is Japan's current crisis merely an interlude, a breathing spell in preparation for the next quantum leap?

The Erosion of the Tried-and-True

If one examines the background to the Japanese malaise, it becomes evident that its causes go beyond the economic crisis. The average citizen has a subliminal sense that not only the economy, but also the very foundations of Japanese society, have been shaken. Author Ian Buruma speaks of a "social, political, or even perhaps cultural malaise," in which the entire political and economic structure which made the rise of modern Japan from the ruins of the Second World War possible is now in the process of crumbling, as the social contract created back then has reached its end.
This may be an overly drastic judgment. But the fact is that, in the media and in private conversations with individual Japanese, there are repeated references to the erosion of the tried-and-true. Most frequently, one hears laments about rising crime rates. Even in its big cities, Japan is still one of the safest places on earth, but statistics do show an increase in crime, mostly theft. As always, however, the general mood is being generated not by abstract figures but by the concrete experience of people themselves or someone they know. When commuters exit from a subway station only to find that their parked bicycle has been stolen or their car broken into, as seems to be happening with increasing regularity, the result is a rapid and general climate of insecurity.

Many people also see the rise in drug consumption, along with the crimes associated with it, as an indication of the society's decline. But solid middle-class citizens, people proud of proverbial Japanese thrift and scornful of the American habit of living on credit, are shocked most of all by reports of the steep rise in private bankruptcies in the past two years. The number of such bankruptcies has increased ten-fold within the last ten years. This development must be seen in conjunction with the recent growth of consumer credit companies, which extend unsecured loans at exorbitant interest rates. According to a study by the National Center for Consumer Affairs, in the past loans were taken mainly to purchase expensive consumer goods, but since the worsening of the economic slump more and more people – ranging from workers whose companies have fallen behind in paying wages to unemployed persons not covered by the social safety net – are apparently constrained to borrow just to cover daily expenditures. Even more alarming is the growing number of suicides caused either by economic despair or shame over social disgrace.

Loss of Prestige

Unemployment that is high by Japanese standards, massively reduced real estate and stock prices, emphatically lessened workplace and career security, a marked increase of crimes committed by foreigners and a drastic downgrading of the country in the eyes of the world: all these factors should provide a very effective platform for nationalistic populists of the stamp of a Le Pen, Fini or Haider. But while Tokyo's Governor Shintaro Ishihara is known for acid pronouncements and occasional xenophobic remarks, he does not enjoy the support of a nationwide political movement. So far, the rather inefficient governments of the last ten years have not driven the politically lethargic citizenry into the arms of a dangerous Pied Piper. The two largest parties, the Liberal Democrats (LDP) and the opposition Democratic Party (DP), control about three quarters of the seats in the lower house of the bicameral legislature. Centrist forces dominate in both major parties and, apart from Prime Minister Koizumi and his former Foreign Minister Tanaka, there is a decided lack of charismatic leadership figures. Nor are there any populist-led parties or protest movements which could shake the stability of the government, much less call the existing system into question, today or in the foreseeable future.
All this can undoubtedly be chalked up as positive. But the question might also be posed of whether the colorlessness of Japanese politicians may not ultimately be a part of the Japanese malaise. The difficult situation in which the country has found itself for some time, which has radically depressed Japan's prestige in the eyes of international rating agencies, banks and the serious media, calls for a kind of leadership that not only dutifully undertakes necessary reforms with more or less success, but also can convincingly demonstrate to its own people and to the outside world that Japan has a promising future. Japanese politics is known for understatement, and in their colorlessness and noncommittment the great majority of its parliamentarians and ministers are a very faithful reflection of the uniformity of the country's "salary men." But Japan no longer lives in splendid isolation. It is in the immediate neighborhood of a rising power, China, which has gained self-confidence (parallel to Japan's loss thereof) over the last ten years, and sometimes lets the world know it in a fairly arrogant manner.

Flight to the Future

Anyone who believes that Japan is condemned to an apparently irrevocable decline and will sink into self-satisfied exhaustion, would be well advised to take a look behind the scenes. During a recent stay in Osaka, I had an opportunity to visit a plant of the Matsushita electronics concern. It was an expedition into the future. In its Hall of Science and Technology, where the exhibits have to be changed frequently to keep up with the latest technological progress, a layman gets a glimpse of the undiminished dynamism of Japan's inventive spirit and the extraordinary feel for quality on the part of Japanese technicians.
The latest results of this constant push for perfection displayed there range from the completely automated and environmentally friendly supplying of electricity to private homes, to the diverse ways in which information technology can be integrated into daily living, including kitchen, bedroom, bathroom and waste disposal, all the way to consumer electronics that truly bring the concert hall into the home. What often appears to be playful extravagance can result in very useful applications. There is, for example, a camera that can take clear pictures even against the sun or in glaring light, and so is especially well suited for surveillance work. Highly impressive, too, is what Matsushita has accomplished in the field of care for the elderly, one of the Japanese economy's surest growth sectors. In future, it will be possible to transmit a patient's medical data daily right to that individual's personal physician. Without the patient or the doctor leaving their own premises, the constantly updated medical data for a large number of people can thus be transmitted and checked. Also in the exhibit is a bed which automatically measures the pulse and respiration rate of a bedridden patient and notifies the physician when irregularities occur.

Shortly before the end of the Japanese financial year on March 31, the attention of Japan's public, its politicians and international business and economic observers turns to the solvency of the country's financial institutions. Extending well beyond that date, however, the Koizumi government – which has suffered a drastic drop in popularity in recent weeks – faces the longer-term challenge of giving new impetus to Japan's confidence in its own future. In its effort to do so, the government has two serious obstacles to fight against.

Although the Japanese were among the world's most travel-happy tourists in decades past, their view of developments in the rest of the world often remained fragmentary, even distorted. The present pessimism is in part a result of the faulty estimate of the country's own strengths and weaknesses in comparison with other nations. Having held themselves up for a long time as models for the world to emulate, the Japanese have become extremely insecure now that much of the world no longer looks up to them. As a result, there is a danger of losing the enormous advantages which Japan still enjoys in comparison to most other industrialized countries.

An even more serious handicap, one which is equally difficult to overcome, is totally inadequate self-presentation. Younger Japanese in particular have become aware that, in a world dominated by the American values of transience and inflated self-representation, one must strike a different pose than was customary in former times. Japan's fashion and consumer industries have grasped this fact, but the traditional spokesmen for Japanese society continue content to labor in obscurity. It is, however, not only in Japan's best interest, but also in that of the broader world – which cannot desire a second vacuum in East Asia following Russia's decline – that the Japanese elites pull themselves together in an act of collective will to swiftly overcome the malaise which presently reigns.

http://www.nzz.ch/english/background/2002/03/20_japan.html