Michael Connors, advisor to the Redwheel Japan Active Engagement strategy, landed in Japan days after the recent re-opening and spent a month there. Here, he provides his perspectives on the country as it opens up post-Covid, and on what the future may hold.
It is fifty-two years since I first rattled into Japan, aboard an old Russian turboprop in the teeth of a typhoon. Of those years, I spent fifteen in Japan, studying, working, and raising a family. As a rookie equity analyst, armed with a utilitarian grasp of written and spoken Japanese, I gumshoed around then little-known companies (such as Nintendo, whose visionary president Yamauchi wore a broader smile each time I met him) and later headed up the Japanese investment banking operations of a British bank. I negotiated with bureaucrats, lobbied Japanese politicians on corporate governance and stewardship and variously encountered royalty (corporate, political and actual), prime ministers, policemen, yakuza mobsters, potters, sake brewers, sumo wrestlers and countless others. I became, in other words, what my younger self would have disparagingly described as an “old Japan hand”, but with an abiding respect and affection for the Japanese people.
During the “lost decades” since I returned to the UK, I have been a frequent visitor to Japan and have attempted to keep up with events there. Since I left Japan, however, my children have grown up and had kids of their own, and I recently started to wonder if some of my Japanese mental furniture has been stowed in a time capsule from a different era. Time, then, I thought, to reconnect in a more visceral way with whatever Japan is today and where its people think the nation is heading.
With this in mind, and with as much open-mindedness as I could muster, I recently spent a month travelling around the central part of Honshu, from the Keihin megalopolis, through cities and towns of varying sizes to remote mountain villages. My aim was to reset my understanding of Japan through everyday observation and largely undirected conversations with friends and acquaintances, old and new and spanning two and a half generations. My informants included professors, journalists, management consultants, company directors and scions of political families.
Although the methodology of this personal research project would not fare well in a peer review in any learned journal, the messages received were sufficiently consistent that I feel somewhat reassured that I have a more up-to-date understanding of the less quantifiable aspects of Japan today.
For what they are worth, here are some notes from my travels:
On Politics and Society:
The murder of former Prime Minister Abe Shinzo was shocking, and briefly raised the normally subterranean profile of Japanese politics in the international media. However, apart from the inevitable probe into the security lapses which allowed it to happen and discussions about whether a state funeral was in order, the only continuing political upshot has been a debate about the alleged links between some members of the Liberal Democratic Party (LDP) with the Unification Church.
There was none of the soul searching about gun control which inevitably follows such events in the United States. There is effectively no gun culture in Japan, nor any perceived need for one. Abe’s killer was obliged to craft the makeshift firearm which he used himself, the murder generally being regarded as a tragic but essentially random event.
Normality has since returned and looks likely to continue under a succession of LDP administrations, elected with little enthusiasm, for lack of any apparent, viable alternative. When I asked two professors of politics (separately) to assess recent political leadership in Japan, their verdict was “indecisive and mediocre”, while offering the caveat that any radical decision-taking would be difficult in the current circumstances.
When asked to name the best/most substantial post-war prime minister, none of my informants mentioned Abe, with most harking back to the days of Nakasone Yasuhiro (Prime Minister 1982-87) and Tanaka Kakuei (1972-4), or even to Yoshida Shigeru (1946-54). With a degree of unanimity which surprised even me – for long a jaded and cynical observer of the Japanese political scene – all my informants concluded that mainstream politics is essentially irrelevant, with the populace content to leave the running of the country largely in the hands of competent and cerebral bureaucrats like BOJ Governor Kuroda, while regarding Prime Minister Kishida as an inoffensive figurehead content to go through the motions while the business of state runs on autopilot.
Although this lack of enthusiasm for the engine of Japanese democracy is mildly disconcerting, when contrasted with the angry rupturing seen in so many other countries today, it should perhaps, on balance, be seen as reassuring and render the national polity quite shockproof.
Political division is, of course, often driven by perceptions of economic life and the fairness or otherwise of the systems which drive it and, in this context, the word which my informants invariably introduced into our conversations was kakusa (“diversity/difference/disparity”).
Although nobody introduced the issue of income tax rates into our conversations, perhaps the reduction in the highest marginal tax rates from the near-confiscatory levels which applied when I worked in Japan (Panasonic founder Matsushita Konosuke commented at the time that such tax rates would have given rise to rebellion in the Edo Period) to levels now similar to those seen in other developed economies has given rise to the view that, in this sense at least, Japanese society is less homogeneous than it used to be.
That said, while conspicuous consumption by a few inevitably fuels resentment in some quarters, this does not so far seem to be a major divisive issue. Rather, it is a growing sense of inter-generational disparity of opportunity, and apparent energy, which is troubling many.
Scepticism about “the youth of today” is, of course, very common amongst older members of populations everywhere, but the current Japanese version of this more an expression of sympathy for a generation of twenty-somethings, particularly twenty-something men, often referred to as “hopeless” (meaning “having no hope”, rather than “useless”).
Commentators ten or more years ago pointed to the rapidly tightening labour market and suggested that this generation should be sitting pretty, but that is not how it has played out, probably because Japanese labour laws make it nearly impossible to sack employees and employers have become increasingly reluctant, in an ex-growth environment, to increase their fixed costs any more than is absolutely necessary. The once ironclad link between labour market tightness and wage increases has broken and, in the absence of legal reform, no amount of political pleading for wage increases is likely to make much difference.
As young men contemplate a less than exciting economic future on modest incomes, young women have become, relatively speaking, more economically empowered and, assessing the lives of their husband-dependent mothers, are increasingly opting to stay single – perhaps an unintended consequence of Abe’s “womanomics”. As an increasing number of young Japanese say that they have no intention to marry , it is perhaps not surprising that, in the absence of the old-fashioned attractions of procreation and homemaking, in a less than exciting economic environment, this group may seem less driven than were earlier cohorts.
Appearances, however, may be deceptive, insofar as the more senior (in both age and status) members of the bureaucracy and the corporate world depend on traditional forms of communication for their understanding of Japan and its people. My younger informants, however, suggested that much of the livelier and more positive flow of information, perhaps unsurprisingly, is to be found in social media and that there is a strong entrepreneurial and forward-looking core to this. So, while the over-forties express a kind of benevolent anxiety about their younger compatriots, they are perhaps oblivious to ample evidence that this group should be ready and able to cope with whatever comes along and to shape the future of Japan.
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