LAND OF THE SETTING SUN? The Future of Japan

Tuesday, January 6, 2004

From the 1950s through the 1980s, Japan experienced dramatic economic growth as it transformed itself from a defeated militaristic empire into a democratic, high-technology powerhouse. The Japanese economy became so dynamic that, by the late 1980s, some American experts were arguing that Japan would overtake the United States as the world's dominant economic power. And then the Japanese economy collapsed. And for nearly fifteen years, the economic malaise has continued. Why? What does Japan need to do to snap out of its doldrums? And what are the risks and benefits to American interests of a reinvigorated Japan?

Recorded on Tuesday, January 6, 2004

Peter Robinson: Welcome to Uncommon Knowledge, I'm Peter Robinson. Our show today: the new nationalism in Japan. From the 1950's to the 1980's, Japan experienced rapid economic growth. Then around 1990, the Japanese economy collapsed. For almost fifteen years now--fifteen years--this rich, educated country has experienced continuing economic stagnation. At the same time, Japan's traditional rival, China, has experienced economic growth, becoming what Japan once was, the dominant presence in Asia. In response to these events, a new strain of thinking about economics and foreign policy is emerging in Japan. The nationalists want to see Japan reinvigorate itself economically and assert itself throughout Asia. What are the risks and benefits to the United States if the nationalist program should succeed?

Joining us today, two guests. Steven Vogel is a professor of political science at the University of California at Berkeley. Toshio Nishi is a journalist in Japan and a fellow at the Hoover Institution.

Title: Tokyo Rosy?

Peter Robinson: Eugene Matthews writing in Foreign Affairs magazine, "Japan's younger citizens grew up expecting their homeland to take the lead in Asia but over the last twelve years, they have watched with dismay as their economy has languished in an extended recession and the country's influence has waned. China has slowly but surely assumed leadership of the region." Here's the first question. Can Japan ever regain the dynamism and influence it enjoyed for most of the second half of the twentieth century or has it permanently slipped into second place behind China? Steven?

Steven Vogel: I think Japan will return to influence in dynamism but over the long term, China's going to be the major power in Asia.

Peter Robinson: Toshio?

Toshio Nishi: Japan rises again.

Peter Robinson: Japan rises again. All right. Little bit of recent history. Between 1989 and 1992, Japanese stocks lost seventy percent of their value and after a period of dramatic growth, all the way from the '50s through the 1980's, a period during which there's only one brief recession--ever since 1990 the Japanese economy has remained stagnant. You have here a rich, well-educated country that has remained stagnant for almost fifteen years now. Why? What's going on?

Steven Vogel: It really is a matter of some very crucial policy mistakes that were made. Mostly macroeconomic policy, fiscal policy and monetary policy and letting that bubble happen in the first place. Also after the bubble burst and not restarting the economy soon enough and effectively enough and also allowing the banking crisis just to linger. So I don't think that the Japanese system itself has really fallen but the policymakers have failed Japan.

Peter Robinson: Steven's just told us it's been one policy mistake after another. Where is the Japanese politician who can set things right?

Toshio Nishi: Economic issue right now in Japan is no longer economic nature. It's a political issue. It's social issue. More deeply it's our psyche issue. It's our matter of pride as a nation. I have watched last fifteen years this political shenanigan, one after another. I really want to give a punch right to their nose. I want to see them bleed. No, bleeding is us. I mean, economy, economy, economy. No, I don't want to hear about the anymore economy. It's not going anywhere. We are getting poorer every year. United States say use ten dollars for food. In Japan we use twenty-five dollars. 2.5 times more on food in Japan. And dollar's getting stronger, more imports coming in cheap but the price stays same. It's not economic issue. It's a political issue. No leadership, none. And the same government last fifty years, they don't want to change.

Peter Robinson: How come? I mean this is--I return to this period of time. It's been almost fifteen years. That's a long time for a political system which I think you would consider basically successful but at some point, if they don't provide solutions to these problems something's structurally wrong.

Steven Vogel: Well, Prime Minister Koizumi squandered an incredible opportunity because he came to power with a mandate for reform with huge popularity ratings. And so he really had a lot of leverage as he came to power to put in a new reform program. And he's a political genius because what he did is he did that by attacking his own party. He said I'm not the old LDP. We're going to have a new politics. I'm going to attack the heart of my own party. So far, so good. The problem was that he's not an economic genius, that his priorities were wrong, that he focused in a sense on his political vision of trying to attack his own party, trying to attack public works, trying to attack public works spending when what he really needed to do was attack deflation and take care of the banking crisis. And he's been very slow on those things. Those just haven't been his priorities. And they're finally--the government is finally making some progress in area--in those areas but it's partial and it's come a lot later than it should have.

Peter Robinson: This long period of stagnation brings us to the rise of the new Japanese nationalists.

Title: Red Sun Rising?

Peter Robinson: Once again let me quote Eugene Matthews in Foreign Affairs. The nationalists, "desire to see Japan assume a preeminent global role." Now he argues that the nationalists, of course, have an agenda for the Japanese military and for Japanese diplomacy and we'll come to those in a moment. But they also have an agenda for the Japanese economy. Let me quote him again. "The nationalists may turn out to be the one factor that manages to unite Japan's public behind the major structural changes the country must adopt to revive its economy." The nationalists want adoption of Western accounting standards and then to government supported monopolies, promotion on the basis of merit rather than seniority and an end to the stigma on entrepreneurship. Anything wrong with any of that?

Steven Vogel: Yes.

Peter Robinson: Okay.

Steven Vogel: Those aren't--the nationalists as I understand it, I mean, Matthews is talking about this huge array of nationalists but there's lots of different nationalists. There's a whole--a larger group I think, of anti-American globalist nationalists. I mean, he's talking about the minority…

Peter Robinson: Those sound like classical…

Steven Vogel: Right.

Peter Robinson: Milton Friedman would be happy with that program.

Steven Vogel: Absolutely. You've got a vocal minority who's saying exactly what you're talking about, that those aren't the real nationalists. The real nationalists are the ones that resent hearing for these twelve, fifteen years you've been talking about, United States tell them how they should change, resenting American leadership and saying we shouldn't be following in the American lead. We need a new and a different Japanese way.

Peter Robinson: You call yourself a nationalist.

Toshio Nishi: I am.

Peter Robinson: What kind are you?

Toshio Nishi: I want to get out from the huge umbrella of our best friend across the Pacific.

Peter Robinson: The United States?

Toshio Nishi: Yeah. My kind of nationalist in Japan may be not many but very vocal. Without United States but like in United States does not mean we should be slave to it.

Peter Robinson: Do you have a domestic agenda for Japan? Do you have an economic agenda?

Toshio Nishi: Yeah. No. Economic to me is secondary. Look my generation went through the defeat, occupation, no food. I mean, we have never been this wealthy, never in the entire Japanese history. We are never this rich.

Peter Robinson: So in other words, taking the long view of Japanese history, this current stagnation isn't all that bad?

Toshio Nishi: No big deal.

Peter Robinson: It's still a rich country?

Toshio Nishi: We are rich.

Peter Robinson: All right. Does this sound like a more typical nationalist to you?

Steven Vogel: Yes. And maybe not so new either.

Toshio Nishi: Not new. Problem here is look, we need some pride here. We have exemplification, global exemplification. How much Japan spends on what you call eliminating poverty and disease, etc. For instance, United Nation, five million dollars annual budget. Japan pays twenty percent of it. United States, twenty-two percent. Japan, United States alone pays forty-two percent of UN budget. There is other hundred eighty-nine members. What are they doing? Talking big.

Peter Robinson: And so Japan puts up twenty percent of the UN's budget and what does Japan get for it?

Toshio Nishi: Nothing.

Peter Robinson: Any respect?

Toshio Nishi: No.

Peter Robinson: Next, the prospects for Japanese re-militarization.

Title: Samurai Worriers

Peter Robinson: 1994, evidence first emerges that North Korea has a nuclear program. There's a tense moment we now all know when Clinton actually asks the Pentagon to draw up war plans. So for a few weeks in 1994, the prospect of war on the Korean peninsula is tangible. 1998, North Korea tests a ballistic missile which flies over Japanese territory before splashing into the Pacific. 2002, North Korea admits that it is continuing a covert nuclear program. I quote again the ec--excuse me, Bill Emmett, who's the editor of The Economist, although here he's writing in a different magazine. "These developments have hardened Japanese public opinion. There is now a desire to see the government take a tougher line with North Korea and this had made it possible for politicians to openly contemplate preemptive strikes and nuclear deterrence." On the one hand, Article 9 of the American-drafted Japanese constitution, which commits the country effectively to pacifism. On the other hand, talk of preemptive strikes and nuclear deterrence. Could you explain current Japan please?

Steven Vogel: I don't think there's support for nuclear deterrence or for preemptive strikes. What you have is a new realism in Japanese public opinion. That means in a sense of an acceptance that the Self-Defense Forces exist, that it may not be such a bad thing that they exist, that Japan has some right to participate in some form of national defense and possibly collective defense. That's about where we are today but I think the pacifism is still very strong and I don't think that there's any support for becoming more militaristic for a nuclear option and there's actually quite a lot of resistance even to a revision of Article 9.

Toshio Nishi: Well put. That's exactly. 1998, August 31st, 12:05 actually missile flew over. I just finished my manuscript. Done. Watch the TV, missiles going over. Japan dramatically changed when we discovered and Kim acknowledged yes, we kidnapped daughters…

Peter Robinson: The kidnapping of Japanese citizens?

Toshio Nishi: I can't believe there's more dramatic psychological, emotional trauma and change, shift, from the super pacifists to the ambiguous pacifist.

Peter Robinson: That's where it is right now?

Toshio Nishi: That's where…

Peter Robinson: Ambiguous pacifists.

Steven Vogel: The Japanese people are really strongly behind a hard line on this issue of the kidnappings. They want Tokyo to take a hard line with the North Koreans about getting full information about those kidnappings. That doesn't mean that there's support for a major military buildup.

Peter Robinson: Ichiro Ozawa, head of Japan's opposition Liberal party, asserted not long ago that no matter how much China or North Korea chooses to expand its military, Japan would be able to keep pace. I'm quoting him, obviously this is a translation into English but it's the closest quotation that I can find, "Three to four thousand nuclear warheads--if we get serious, we will never be beaten in terms of military power." There you have a senior Japanese political figure talking about three or four thousand nuclear warheads. Is he joking? Is he being--what's going on there?

Steven Vogel: Well it used to be a taboo. You could not even talk about nuclear armament. I think what has changed is that you could--that you can--in normal discourse, you can bring up this issue, you could bring up this possibility. Is it going to happen? No. Is there strong support for it? No.

Toshio Nishi: No, I think that's too much.

Peter Robinson: You would agree with that?

Toshio Nishi: Well, but then usually history changes by accidents. If North Korea make accident of shooting something and they land in Osaka or Tokyo, I think Japan would immediately change Article 9, rewrite the constitution and there's enough technological know-how to build best airplane, fighter planes, submarines, aircraft carrier.

Peter Robinson: Let me ask our guests whether the United States should favor or oppose Japanese remilitarization.

Title: Just Say Noh

Peter Robinson: Again I'm going to quote Eugene Matthews. "It is hard to overstate the effect Japan's militarization could have on U.S. interests in Asia and nowhere would the impact be greater than in China. If the United States is seen as encouraging Japanese militarization, rising tensions could pit Washington against Beijing." That's a sensible statement, right? Okay, let me run down a list of possibilities here. The Japanese have already committed a couple of billion dollars to putting up two satellites of their own. We're happy with that. The United States is happy with that. Should we encourage them to put up more satellites?

Steven Vogel: I don't think the United States should be encouraging Japan to increase its military power at all. No.

Peter Robinson: Not at all? Self-Defense Forces. They spend just a little over one percent of GDP on the Self-Defense Forces. It's been sixty years since they saw any action. They're sending a contingent to Iraq now. This is the first time in sixty years when Japanese troops are being put in a theater where they might actually see action. And the question now is whether Japan should actually turn its Self-Defense Forces into an army worthy of the name. You favor that and what should the United States favor?

Toshio Nishi: Yeah. Steve just said earlier, very strong pacifism in Japan.

Peter Robinson: Right.

Toshio Nishi: As long as there's no accident, nobody is threatening us actually; we'll not change the Article 9. Those hundred and five hundred soldiers going to Iraq…

Peter Robinson: Right.

Toshio Nishi: …this is a serious issue not because we are supporting America but we are going over the Article 9. Article 9 is interpreted many times to suit a particular expediency. If we started doing this, there will be soon--there's no constitutional…

Peter Robinson: Impediment.

Toshio Nishi: Yeah, restraint over it. So constitution becomes irrelevant.

Peter Robinson: Shinichi Kitaoka, law professor at the University of Tokyo, "Remilitarization is going on but no one is willing to take on the task of changing the legal framework."

Toshio Nishi: Yes, that's correct.

Peter Robinson: That's an accurate statement or is this an overstatement?

Steven Vogel: No, that's true.

Toshio Nishi: I think so too.

Peter Robinson: And so--and what's your position as a Japanese nationalist? You have to be serious.

Toshio Nishi: We have to stop talking. We have to have national dialogue over our constitution. It's a sixty years and no amendment ever. Time changes, constitution doesn't change. It's crazy.

Steven Vogel: There actually is a constitutional commission that has been looking at this, both at the level of the Diet and the Liberal Democratic Party. The ruling party has its own commission. So this is on the table. It's not on the table in the short run. It's going to be a two to three-year process at the minimum. And then to change the constitution, you would need a national referendum to pass. So it's not an easy process but I think that this is something that on the longer horizon is going to be on the table.

Peter Robinson: Bigger--biggest question I suppose. Listen to two quotations. Again, I think for the last time here, Eugene Matthews, "A nuclear Japan would make Asia a more dangerous place, starting an arms race unlike any the region has ever seen. China would increase its nuclear stockpile and seek more nuclear submarines. Washington must persuade Tokyo not to acquire nuclear weapons." Charles Krauthammer, "We should go to the Chinese and tell them plainly that if they do not join us in squeezing North Korea and thus stopping its march to go nuclear, we will endorse any Japanese attempt to create a nuclear deterrent of its own. If our nightmare is a nuclear North Korea, China's is a nuclear Japan. It's time to share the nightmares." American policy as regard to Japanese nuclear deterrent should be?

Steven Vogel: Oh should--we definitely do not encourage the Japanese to go nuclear.

Peter Robinson: Krauthammer--that's just crazy.

Steven Vogel: Absolutely. That's crazy. Yeah and Japan has nothing to benefit, I think, from even increasing its military power beyond its current levels, much less to have any kind of nuclear pa--Japan has nothing to gain. The world has nothing to gain from that. We would be very foolish to push them in that direction.

Peter Robinson: I can't seem to get either of our guests to make a strong argument for anything other than the status quo. Let me try one more time.

Title: Playing Koi

Peter Robinson: You've described the current political structure as by and large successful. Koizumi is slowly coming to grips with the economic problem, as regard to asserting its prestige or its influence in Asia, as regards expanding its military even in very minor ways. You're extremely skeptical about all that. So what you're describing is a program for maintaining the status quo which however, will not satisfy Toshio's psychic need.

Steven Vogel: Well, if you want Japan to move in the nationalist direction, there's multiple different directions it could go.

Peter Robinson: All right.

Steven Vogel: I think the direction that Japan should go is towards a less militarist nationalist direction. In other words, it should move its foreign policy away from the United States, become more independent. To do so, I think it should revise Article 9 but not get rid of it, reinstate an Article 9 that works, one that says that Japan will still maintain primarily defensive military, that it will never have nuclear weapons, that it will never unilaterally strike. In other words, a military that would be very closely intertwined in the framework of collective security and if anything, actually decrease its military power, not increase it. So you can be a nationalist who wants a much stronger Japan or you can be a nationalist that wants a much more independent Japan. And I think for Japan, the latter is the better option.

Peter Robinson: And what about--go ahead.

Toshio Nishi: Well, the reason I'm using a psychic--word psychic, there's a psychic void here. Japan, the land of this great martial arts...And just because we lost one war, we have to be a eunuch? I mean, have to--that quote you just said, it's like Japan is Americans pawn against China.

Peter Robinson: Right.

Toshio Nishi: Excuse me. Hey, we are great economic power, great brain there, hundred percent literacy, everybody's polite. And enormous this emotional touch to the…

Peter Robinson: You're angrier with the United States than you…

Toshio Nishi: No, I'm not.

Peter Robinson: You resent the American presence more than the Chinese.

Toshio Nishi: No.

Peter Robinson: No?

Toshio Nishi: China is far scary. We like--I'm telling you, we like Americans. We like to be closest to the United States. But if U.S. uses us as a whipping boy or pawns or some kind of card, I'm sure my generation and those younger who do not have any guilt complex over the war says what--would you like repatriate those dollars from Wall Street?

Steven Vogel: And Governor Ishihara who is one of the--kind of the don of the nationalists…

Peter Robinson: Governor of Tokyo?

Steven Vogel: …yes, governor of Tokyo--put this I think, he's a former novelist so he put this very nicely. He said I'm not angry at the United States. It's--Japan is like a small child that's hiding under the skirt of its mother. That's the United States. And I'm not mad at the mother. I'm mad at the child.

Peter Robinson: Last question. What practical steps should Japan be taking to create a proper geopolitical role for itself?

Title Lost in Translation

Peter Robinson: Let me ask you both what advice you would give to the Prime Minister of Japan. If you could narrow it down to an agenda of one or two items, what must be done in Japan?

Toshio Nishi: First, national debate over the constitution. That would open up so many pent up emotions, frustration and aspirations. I mean, we can't talk about the military buildup if I say we have to defend ourselves, not by the U.S. Marines who spend five billion dollars, which we pay. I mean, why do we have to hire bodyguards? We can defend ourselves.

Peter Robinson: So what you're talking about really is some sort of psychological reckoning…

Toshio Nishi: Yes.

Peter Robinson: …long delayed in the wake of the Second World War. Does that make sense to you?

Steven Vogel: Yeah, so I would do three things. First I would change the constitution as we suggest, not getting rid of Article 9 but making an Article 9 that works, that people will pay attention to.

Peter Robinson: Can I just--you want the change in the constitution itself?

Steven Vogel: Yes.

Peter Robinson: What Toshio wants is the debate.

Steven Vogel: I think you need both.

Toshio Nishi: It leads to what he's talking about.

Steven Vogel: Then secondly, I think Japanese foreign policy has to shift away with--from a total reliance on the United States. When the United States is headed in the right direction, I think Japan should be a strong partner. When it's not, it should feel like it can say no and it should do that, not…

Peter Robinson: Where should it say no to the United States?

Steven Vogel: Well, I would say certainly on the latest engagements in Iraq. Japan had an opportunity…

Peter Robinson: Public opinion was against it?

Steven Vogel: Japanese public opinion was against it. I think that Japan has a very strong commitment to the United Nations. It should have said that we are only going to participate in something that has been completely sanctioned by the United Nations. We're not with you on this one.

Peter Robinson: They should have--Japan should have thrown in its lot with France and Germany?

Steven Vogel: I would say so, yes.

Toshio Nishi: But I mean, we are too close to the United States. And foreign--we don't--he knows, we don't have foreign policy. Please. We are errand boy for American master. We don't have our--for such a wonderful sound foreign policy.

Peter Robinson: But it doesn't exist?

Toshio Nishi: No.

Peter Robinson: All right. What's your third point now?

Steven Vogel: Third point would be to deal with the issue of the history in Asia because this still constrains Japan's relations, its wartime history, wartime aggression. It still constrains its relationship with China, with South Korea and its ability to play a leadership role in Asia. And I…

Peter Robinson: Deal with it means what?

Steven Vogel: Deal with it means a clear apology, not just from the Prime Minister but ideally from the dyad and much more open information program to try and make a clear accounting of that history. The Japanese government has certainly made considerable efforts but it hasn't been enough in the eyes of the Chinese and the South Koreans. And that hurts Japan.

Toshio Nishi: Now I'm glad--first point of complete disagreement with Steve. I'm sick and tired of apologizing. Whole Asia says apologize, apologize. And we keep--somehow I grew up in Japan so we apologize. Oh we are bad boys. And we became rich to share our prosperity. Last ten years we give hundred fifty billion dollars of foreign aide. That's not enough. And soon--I mean, my generation now reaching to the leadership level and constant--it's like you been told apologize for the slavery. How long will this go on? If China doesn't forgive us, Korea doesn't forgive, so be it. I don't--I don't need your forgiveness. Don't ask for our money.

Peter Robinson: Last question. It's television so we have to bring it to the last question. Now give me your one or two lines of advice for the President of the United States. Toshio?

Toshio Nishi: Keep Japan close but don't take it for granted.

Peter Robinson: Steven?

Steven Vogel: Yeah, I think that's right. You have to communicate. If you want Japan to be a partner, you've got to bring them in; you've got to tell them what your foreign policy agenda is. Otherwise, I would stay away. Don't press Japan on what it should be doing in terms of its economic policy.

Peter Robinson: All right. Toshio Nishi, Steven Vogel, thank you very much.

Steven Vogel: Thank you.

Toshio Nishi: Thank you Steve.

Peter Robinson: I'm Peter Robinson for Uncommon Knowledge, thanks for joining us.