Japan’s Open Future

 

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At long last, my book Japan’s Open Future: An Agenda for Global Citizenship (co-authored with Tomas Casas i Klett and Jean-Pierre Lehmann) has landed in warehouses in the UK and the US. My fellow bloggers at Sans Everything will know that this has been a long time in the making, and I thank them for some very helpful feedback on earlier drafts. 

 

Japan’s Open Future is ambitious, drawing on a range of disciplines and themes including history, communication, business, economics, politics and geopolitics. It seeks to present a grand strategy for Japan by showing how all these issues are connected. Over the next couple of months I will be posting commentaries and excerpts here that draw on specialist topics from the book; as I do I will invite people with a stake in those topics to drop by and join us for a discussion.

 

Let me start by sharing an opinion piece I wrote for the Huffington Post, “Japan in a Post-American World.” It provides a summary of our argument as it relates to these acutely challenging global circumstances. In our book we argue that Japan has no choice but to look outward and become a global citizen if it would like to have a more secure and prosperous future. The alternative, of remaining insular and closed to new ideas, immigration and trade, would be a loss for the global community and would exacerbate Japan’s current problems. The financial crisis has only served to reinforce our argument on many levels.

 

Yet more than one recent commentator has underscored the absence of good ideas and creative reform efforts emanating from Japan. Let me share four recent examples.

 

First, here is Gerald Curtis:

 

” … Once [reform minded Prime Minister Koizumi] left office, traditional forces that had been knocked down but not knocked out recovered a lot of ground. The result has been a succession of inept leaders and the absence of a coherent policy agenda.

 

It would be comforting to think that this is all part of a Schumpeterian process of creative destruction. But since Mr Koizumi’s 2006 departure, it has been a process without creativity. There will be more destruction, perhaps including the demise of both the LDP and DPJ and the formation of new parties. Whatever the political goings-on, there is no optimistic short-term scenario for Japan.

 

At some point the public will grasp the seriousness of the economic troubles and demand change. But that crisis mentality does not exist today. Therefore things will not only get worse before they get better. They will get worse before the political system comes up with policies that even stand a chance of making them better.”

 

Second, here is Tobias Harris (Mr. Harris kindly mentions and responds to our book):

 

“… Meanwhile, a new Asahi survey provides a detailed account of public discontent with the political system. The picture is of a people that has basically given up on its political leaders, but uncertain of whether and how the system can be changed.

 

… The Koizumi revolution is dead, if it ever even existed.

 

This survey does not bode well for Japan’s future. The deep pessimism and desire for economic retrenchment may be symptoms of the economic crisis, but given that Japan’s great adjustment will take years to unfold, these symptoms may be characteristic of Japanese politics for years to come. The argument made by John Haffner, Tomas Casas i Klett, and Jean-Pierre Lehmann — a spirited call for an open, globally minded Japan — is certainly admirable, but I fear that there is little desire for openness and optimism among the Japanese people. The public seems first and foremost concerned about ensuring that they will have some degree of comfort in the old age, along with employment, preferably secure employment, for those of working age. If that means greater protection at home and abroad, the public seems willing to accept the consequences. This is undoubtedly a recipe for declining regional and international influence, but such concerns appear to be far from the minds of Japanese citizens as they experience economic ruin.”

 

Third, here is Dennis Gartman of the Gartman Letter (as quoted on the HS Dent financial blog):

 

“We have long argued that Japan has put itself into a horrid place demographically as her birth rate keeps on plunging … Things have gotten so bad … that the government itself says that Japan’s population shall halve in another 50 years…. We are watching a demographic train wreck happen in very slow, but inexorable motion … Demographics drive everything. They are tidal in nature, and demographic trends are monstrous in size and not readily turned around … Japan’s trend toward demographic self-destruction is now well established … This has been and this shall be sad to watch.”

 

Gartman (at least in the excerpt I have seen) does not consider the degree to which immigration could make up for this decline, but most observers believe Japan will be reluctant to admit immigrants on the level required to compensate for the declining birth rate. I count myself in this group, although our book is meant to encourage debate and at least try to influence policy makers in Japan towards greater acceptance of immigration.

 

Lastly, here is Masaru Tamamoto writing in the New York Times:

 

“… The truth is, Japan is a mess. Mr. Aso’s approval rate recently hit 11 percent, and his ruling Liberal Democratic Party is in open disarray. His predecessor barely lasted a year. The opposition Democratic Party of Japan just offers more of the same. This is largely because we have become a nation of bureaucrats.

 

… Signs of despair are everywhere. Japan has one of the highest suicide rates among rich countries. There may be as many as one million “hikikomori,” from teenagers to those in their 40s, who shut themselves in their rooms for years on end … But by far our most serious problem is a declining and aging population. Given present trends, total population will likely decline from around 130 million to under 90 million in 50 years or so. By that same time, 40 percent of Japanese could be over 65.

 

If we want to survive as a nation, we must shed our deeply rooted resistance to immigration. Contrary to widespread prejudices in favor of keeping Japan ‘pure,’ we desperately need to dilute our blood. Our aging nation will need millions of university-educated middle-class immigrants with high productivity, people who will put down roots and raise families, whose pride and success will be the affirmation of new Japanese values.

 

Japan desperately needs change, and this will require risk. Risk-taking is not common among the bureaucratically controlled … This same risk aversion translates into protectionism and insularity.

 

… Still, the idea that the Japanese are afraid of risk has no basis in history, for better or for worse. Remember Pearl Harbor? In fact, Japan’s passiveness today is in large measure a calculated and reasonable reaction to its behavior during the Second World War. But today, this emphasis on safety and security is long past its sell-by date.

 

We have run out of outside models to imitate. We must start from scratch, embracing an idea of progress that is based on innovation, ambition and dynamism. Doing so will take risk — and extraordinary leadership. But the alternative is to continue stumbling down a path of decline.”

 

So there you have it: grim outlooks for Japan, every one of them. Are there prognosticators of a more optimistic variety – observers who emphasize inspiring and exciting prospects for Japan’s future? There are a few stalwarts, like Christian Caryl writing in Newsweek, but of late they appear to be, like Japan’s population, a diminishing number.

 

I anticipated that our book would receive criticism of the politically correct variety, as in: “Just who do you think you are – a Canadian, a Frenchman, and a Spaniard – to engage in a work of advocacy about Japan?” What is interesting about early feedback from more than one source, however, is that if anything other commentators are saying that our argument is overly idealistic – that we are taking too seriously the possibility of significant reform in Japan. 

 

Maybe we are. But then again, ours is a work of advocacy, not prediction. We are not saying what Japan will do, only what we believe it should do. What we share with some other observers, however, is a belief that the stakes are high: decline or renewal. As Dr. Tamamoto was kind enough to say of our argument, “The future could spell deep trouble if the Japanese do not understand the message of Japan’s Open Future.”

 

3 thoughts on “Japan’s Open Future

  1. Congrats John! Sounds very interesting, I look forward to reading it.
    From the little I understand of the subject it sounds like a fascinating case of sleepwalking to suicide. That is, it seems like a very explicit example of an archetypal problem: whether a group can collectively decide to do something uncomfortable, maybe unpalatable, vs an inevitable decline. Decline is just so easy: its powered by inertia and doesn’t require any decisions. It will just happen on its own. And any pain that ensues was destiny.
    Sigh. My bet, as always, is on the ostrich-people.

  2. Thanks, David.

    There are some optimists on Japan, including those who point out that the country might find ways to thrive with a much smaller population.

    Other optimists emphasize Japan’s ability to reinvent itself, to thrive during times of global upheaval and regional change. Jesper Koll’s piece in the March issue of the Far Eastern Economic Review, “Why I’m Bullish on Japan,” reprises this theme (http://www.feer.com/economics/2009/march58/Bullish-on-Japan).

    Time will tell …

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