20 May 2005 Blog Home : May 2005 : Permalink
During Japan's crisis, western - mainly American - witch doctors advised that the only solution was to abandon Japanese customs like lifetime employment and adopt more Anglo-Saxon practices such as shareholder value.[...]In the event, Japan largely ignored the advice and has emerged from its long, post-bubble recession looking remarkably like it did before the crisis.
In the decade and a half since the height of the Japanese bubble, Japan's government debt has mushroomed to 140% of GDP from under 50% and its economy has suffered from persistent deflation and low growth and which, contrary to Jacques assertion, is not clearly over yet. The stock market, although it has recovered from is 2003 lows, is still at the level of the mid 1980s and unemployment is still over 5% compared to the pre-1990 levels of 2% or so. If this is success then failure begins to look attractive.Even a casual observer who cannot understand Japanese will almost immediately notice the differences: the absence of antisocial behaviour, the courtesy displayed by the Japanese towards each other, the extraordinary efficiency and orderliness that characterise the stuff of everyday life, from public transport to shopping. For those of a more statistical persuasion, it is reflected in what are, by western standards, extremely low crime rates.
Gotta love those clichés. God forbid that one point out that Japan is not alone in these characteristics - Switzerland springs to mind, as does (or did - I haven't been there for a while) Norway. It is worth pointing out that Japan has a miniscule number of immigrants, unlike any other major developed economy - though I note that Switzerland doesn't have very many, and I can't help but wonder whether that has anything to do with the lack of "anti-social behaviour" etc. It is true that there aren't any gangs of unemployed druggie petty criminals, but just possibly that has to do with the 5% unemployment rate and the lack of much government social security.Not least, it finds expression in the success of Japanese companies. This has wrongly been attributed to an organisational system, namely just-in-time production, which, it was believed, could be imitated and applied with equal effect elsewhere. But the roots of the success of a company such as Toyota lie much deeper: in the social relations that typify Japanese society and that allow a very different kind of participation by the workforce in comparison with the west. As a result, non-Japanese companies have found it extremely difficult to copy these ideas with anything like the same degree of success.
It's such a pity that Mr Jacques is still trawling around in cliché-land. A more sensitive economic observer would note that there are essentially two Japanese economies - the successful, market driven product companies and the bankrupt and hideously innefficient service companies. Mr Jacques might be interested to note that even though Toyota is a world leader not all Japanese manufacturers are so wonderful - Mitsubishi Motors to pick an example not completely at random. At Mitsubishi Motors the workforce was able to participate in coverup after coverup and the social cohesion he raves about meant that whistle-blowers were strongly discouraged.Following the recent train crash in which 106 people died, the president of the operating company, JR West, was forced to resign: this is the normal and expected response of a company boss when things go seriously wrong. Income differentials within large corporations are much less than in their Anglo-Saxon equivalents, because it is group cohesion rather than individual ego that is most valued.
Resignation does not always mean what Mr Jacques thinks it does. Frequently the gentleman who resigns just takes up another position in the company. And the reason for the lack of income differential is that the Japanese tax system which punished severely large salaries. However the chaps at the top get numerous perks which don't seem to flow down to those lower down - a company provided car and driver or very nice expensive restaurant meals for example.Even the preferred choice of car reflects the differing ethos: whereas in the US and Britain, the fashionable car of choice is a 4x4 - the very embodiment of a "bugger you and the environment" individualism - the equivalent in Japan is the tiny micro-car, much smaller than a Ford Ka - a genre that is neither made nor marketed in the UK.
This one is one of the ones that Tim noted. Just as with the income differential the micro-car is a product of a tax differential. It is also something to do with the street widths in many Japanese cities. However notwithstanding that there are plenty of big cars, 4x4s etc. on the streets and even more when you go outside the cities to the countryside. "Bugger you and the environment" is alive and well in Japan from its spread of concrete everywhere to pervasive loud speakers and other noise pollution to the water quality of many rivers. I would far rather swim in any river in the UK than one passing through a major city in Japan.