In Japan on election eve
TOKYO -- So I suppose you might want to know why I'm in Japan. Here are some answers:
Think back to 1997 - if at the UK general election, the Tories had been in power not for 18 years but for more than a half a century, would the Labour victory have been a big story?
If the world's second biggest economy is about to fall into the hands of a left-of-centre government headed by a party that has never before held office, might that be interesting?
If the country that brought you the world's biggest seller of cars (Toyota), some of the biggest names in electronics (Sony, Toshiba, Panasonic), the country that is America's closest ally in Asia and a major provider of aid to Africa - if that country were about to embark on a journey into the political unknown, might it be of interest?
That's why I'm in Japan. All the signs are that the opposition party, the Democratic Party of Japan, is about to win a landslide victory in Sunday's general election. If it does, it'll be the first time - with the exception of a few months in 1993-4 when hardly anyone noticed - that the Liberal Democratic Party has been out of power. It will be a watershed moment.
(Interesting little nugget: the man on course to be the next Prime Minister, Yukio Hatoyama, is the grandson of the man who replaced the grandfather of the current Prime Minister, Taro Aso. They like to keep politics in the family here.)
Japan is a country in transition. And like all transitions, this one is breeding uncertainty and instability. Remember the "salarymen", the Japanese workers who had jobs for life in companies that took care of them and their families virtually from cradle to grave? They're a disappearing breed, replaced increasingly by workers on short-term contracts with little job security.
Remember how Japan used to have a reputation as a country with one of the narrowest wealth gaps in the developed world? Not any more ... it now has the second highest rate of relative poverty in any of the major economies (the US comes first).
Remember the Sony Walkman, which brought the joys of music on the move to a generation of music fans in the 1980s, developed and produced here in Japan? Now, the Walkman has been replaced by the iPod, developed not in Japan but in the US.
So is Japan falling behind in this fast-moving digital age? Yesterday I visited a company where they make the chemicals that coat the metals that conduct the data in your PC, mobile phone and TV set. They employ a mere 50 people. Do they want to expand? Not really, they like it the way they are. That's not how Bill Gates built Microsoft, but it's one reason why most Japanese companies are failing to develop a global presence.
I also visited Panasonic, where they are working to develop a whole range of environmentally-friendly technologies that have little to do with your flat-screen TV or your digital camera. They showed me an eco-washing machine and an eco-microwave in an eco-house which can generate all its own power almost entirely from renewable sources. This, they believe, is the future.
And I met a man who runs a second-hand shop, which he calls the epicentre of his anti-capitalist revolution. We must learn to live with less money, he told me, which isn't a message you'll hear from the thousands of Japanese workers still scared of losing their jobs even as the economy seems to be climbing back out of recession.
So is Japan interesting? It is. Is it important? Ditto. I'll be reporting from Tokyo in tonight's programme, and again on Monday and through next week after the results of the election are known. I do hope you'll try to tune in.
© MMIX~RS~q~RS~~RS~z~RS~42~RS~)
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Good article, i wonder why it has no comments :-)))
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Liberal Democratic Party (LDP) seems ready to be punished for its inability to get the Japanese economy going for the last decade or so. However so far as I am aware the opposition (and likely victors) The Democratic Party has very little experience.
There is I think a deeper rational behind the decline of Japan and that basically boils down to relative labour costs and the associated undervaluation of the Yuan. This is same force that destroyed the manufacturing businesses of the rest of the World has done so in Japan. However the 100 million of so Japanese have no been as stupid as the UK in responding by further destroying their own industry by relying on financial services that if that path had been chosen then they would have added to the overvaluation of the Yen and hindered the real economy of Japan further still.
Roll on the Democratic Party that is what I say! But it is not going to the pretty!
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Mr. Lustig has certain themes to develop. I hope that he does so in various essays.
His perception of the themes is acute, and their possible applicability to the rest of the world is also a timely concern.
I anxiously await Mr. Lustig's development of these themes.
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John from Helldom;
You are a most remarkable man. It is hard to see how someone can be so consistently wrong about everything when even a broken clock is right twice a day;
"However the 100 million of so Japanese have no been as stupid as the UK in responding by further destroying their own industry by relying on financial services that if that path had been chosen then they would have added to the overvaluation of the Yen and hindered the real economy of Japan further still."
One of your major problems I think is that you either don't read history or what is actually going on or your forget. Have you forgotten the Japanese bubble economy? The real estate market soared. A small apartment in Tokyo was 2 million dollars. Membership in prestigious golf clubs was one million dollars a year. Japanese therefore speculated on the real estate markets in Hawaii and California paying rediculous prices for houses because they looked so cheap by their own domestic standards. It helped keep the California real estate bubble alive until Hong Kong took over worring about what would happen to freedom when China took over from Britain. That also extended the California real estate bubble. I think it was Mitsubishi bank that lost about a billion dollars on a reckless investment in Rockerfeller Center in New York City. Meanwhile the Nikkei soared to 40,000 before it crashed to about 9000. This was all in the 1980s. Decades later I think it's around 12,000 or 14,000 which is not much of a recovery. They had their own financial fiasco only it was tweny years before ours. They still haven't recovered from it. Much of it is blamed on the lethargy of the government. It also has a wierd financial system where the post office retirement fund? controls much of the nation's wealth. I think they have about 3 trillion dollars in assets. Stimulus has been very little and interest rate stimulation has been slow but ultimately reached about zero percent. That's about where the US Treasury short term bills are now. If the US followed the Japanese model, it would never recover. BTW, Japan is a huge investor in China. Much of its domestic manufacturing employment economy has been outsourced to far cheaper labor in China. This has kept Japan going. Its ultraconservative fiscal policies have caused the Yen to be very highly valued making its labor very expensive compared to foreign competition. Its financial culture is similar to that of Britain's where the investors go drinking late at bars every night after work.
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#4. MarcusAureliusII wrote: that he disagreed with me.
Barbarious, so I must be right as you are never right! (It has repeatedly struck me that your adopted name is in fact a prime example of an oxymoron!)
Specifically, the Japanese economy did not destroy its own manufacturing sector to support its own banks as we did in the UK. We make next to nothing in the UK because for thirty years the economy of the UK has been run for the benefit of the self defined 'socially useless' banking and financial services sector. The Japanese did not do this.
The Japanese did however encourage a housing bubble with absurdly low interest rates - Just are we are doing now on both sides of the Atlantic. But that is another story.
However, the one sentence in your otherwise idiotic ramblings that I may agree with is your jibe about so called 'conservative' fiscal policies and the hugely destructive consequences of these policies. These policies benefit only bankers but destroy the economy via overvalued currencies. The tragedy both you and I, are, in your case, and, will be in mine, experiencing is that conservative policies are being seen as a solution to the credit crunch when they are in fact indistinguishable from re-inflating the busted bubble! This is the oncoming disaster - Ben Bernanke and Mervyn King are the twin destroyers of the World but they are both being kept on, when they shared an office at Harvard, and are both wrong. They did not see that how they were running the economy was doomed as their education must have been, by virtue of its failure, wrong.
The factories in China do not use less Labour hours to make the same goods as we make (or used to make) in the UK, Japan and the USA it is just the price of the labour is different. And that is down to Politics and Bankers! The Yuan needs a massive upwards valuation against most of the World's currencies and until this takes place the World's economy will remain extremely unstable - the massive error that we, the Japanese and the USA have made is to believe that the financial shenanigans of our bakers will give us the value we used to get from the labour of our skilled manufacturey.
It all started with us with Margaret Thatcher, and with you, Ronald Regan - theses are the twin political destroyers of the Western World. (along with the Chicago School Economics of Milton Friedman) In Japan the ossified political system largely structured by the USA after the war gave rise to similar stupidity. Somehow the German's have managed to still make things despite the best efforts of the USA. As indeed have the French.
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John from Helldom, I'll give you a more complete explanation of your latest blunders at another time but for now;
"In Japan the ossified political system largely structured by the USA after the war gave rise to similar stupidity. Somehow the German's have managed to still make things despite the best efforts of the USA."
Japan has a Parliamentary system similar to Britain's. Germany is a Federal Republic like America.
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#6. MarcusAureliusII wrote:
"Japan has a Parliamentary system similar to Britain's. Germany is a Federal Republic like America."
Maximus Cretinous: There is no point of having a 'democratic' system unless it provide a mechanism of changing the management of a country. Many of the World's greatest dictators were elected time and time again. You clearly don't grasp why democracy is a good system - it permits changes of personnel without requiring revolutionary violence - but come to think of it, as you prefer, and always advocate genocide as a solution to everything perhaps you don't appreciate this!
The mechanisms of democracy may be necessary but they are not sufficient. Also there has to be a real change and real difference in policy between potential governments to permit democracy's virtues to work. (Are your Democrats too similar to your Republicans? Or our Labour too similar to our Conservatives?)
(NB the LDP has been in power in Japan for all by 11 months since the last war.)
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" Many of the World's greatest dictators were elected time and time again."
This shows your true ignorance of what democracy is. Elections do not equal democracy. There were elections in Iraq under Saddam Hussein. He got 99.997% of the vote. I can only imagine that the 20 people who didn't vote for him were tortured to death. Elections must be free and fair and that means that all candidates who want to run have equal access to the media to present their ideas before the election. Hitler was elected. One man, one vote, one time. And then it's a dictatorship...just the way it's going in Venezuela right now. I don't know what you call secret police and military enforcement of a dictator's political will to remain in power but that is also voilence even if it isn't called revolution.
Don't tell me Britain has a democracy. Not when the last time the people had a vote on membership in the EU, it was to join a trade pact and then the government wound up giving the nation's sovereignty away without even a national debate let alone a vote. Not when 600,000 Poles emigrated to Britain without one word of opposition to the policy that allowed it. Not when the media is dominated by one government subsidized corporation that controls most of the news. Not when an entire nation lays down like a herd of sheep doing whatever the government tells them to do and at most grumbles about it. Democracy demands revolution in the face of tyranny like that. That's how America invented democracy, that is how it was born. And it was asserted from the very beginning that revolution in the face of tyranny is the People's right. In America, the people own and control the government. In the rest of the world it's the other way around. It is YOU who doesn't understand it John from Helldom. Why do you think I call it Helldom anyway? Just look around you. Are there people in your country in large numbers who emigrated there under a policy you had no say over? Now that they are there and are citizens, do they feel connected to the system, empowered, loyal? Why do they identify with Pakistan instead of Britain then?
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