Japan may be showing the way to the world

Adrian Hamilton: Japan may be showing the way to the world
International Studies


Thursday, 5 May 2011

...It is always a temptation to exaggerate the cultural difference of the Japanese. They are far more open to the world and ideas than we tend to credit them. Their calm under fire arises less from a culture of obedience than a lack of an alternative. They have endured a decade of little, if any, growth because they have been wealthy enough not to abandon restraint in the interest of growth and because their export industries have kept on adapting.

Now they are up against it. Confidence in politics, and in the efficiency of corporations, has been shattered (it was only last year that they changed government after 40 years of virtual one-party rule). Its export industries are having to reconsider their drive to ever lower costs. Government debt is near its limit at the highest in the world (200 per cent of GDP) even before the sums being allocated for reconstruction. The ordinary citizen has no choice but to live with electricity constraint and consumer caution.

The Second World War forced the country into a national drive to modernise its industry, to downplay nationalism and to compete in the world. Maybe the latest crisis will force a similar revolution, encouraging immigration, cutting back state expenditure and tearing up government regulations, in an effort to resume growth. It's what the Goldman Sachs of the world and nearly every outside economist is asking of them.

But then maybe it will turn Japan in the opposite direction, with energy shortages forcing changes in consumption and the need for social cohesion making an endless pursuit of growth seem the wrong way to go. If so – and I think it is the more likely result – then the Japanese could be not so much the exceptions as the leaders on a road which most of us in the West are going to have to follow...