The U.S.-Japan Cultural Disconnection
Hiroshima and the end of World War II have a bearing on the current trade dispute between this country and Japan. But not in the simple sense that the Japanese, defeated in war, then took commercial revenge.
On the contrary, a deep cultural disconnection underlies both military and trade confrontations. Now, as in the past, conflicts far more deadly than intended could develop unless each country takes special care not to misread the other.
Japan is a consensus society. Insular, poor in natural resources and packed together like sardines, the Japanese avoid chaos by sinking individual differences in national causes. Building agreement takes time. But, once a goal is fixed, the Japanese pursue it with furious intensity until, as they say, aku made mo-- even the bitter end.
The United States, by contrast, is a pluralistic society. Americans, coming from the most diverse origins and inhabiting a continent with wide-open spaces, are used to airing different views at all times. Even under provocation we express a rich mix of opinion. But, when pushed too far, we strike back with overwhelming force.
The events leading to the Pacific war provide an illustrative example. Japan embarked on a program of imperial expansion before the turn of the century. For 40 years U.S. statesmen complained--and did nothing--as Japan took over Korea, Manchuria and the China coast. The Japanese wrote off the complaints as bluster, and concluded that they had a free hand.
But when they pushed into Southeast Asia the United States turned nasty. Pearl Harbor was the Japanese response. They fought thereafter until utterly devastated. When Tokyo began to hint at peace, Washington missed the cue. Hence Hiroshima and Nagasaki.
After the war Japan abandoned imperial ambitions and adopted the national goal of rapid industrial modernization. By working very hard, by saving like crazy and by stinting on comforts (such as housing, roads and other social infrastructure), they developed, after the United States, the second largest economy in the world.
Along the way, in sector after sector, Japanese manufacturers overtook and surpassed U.S. competitors. Repeatedly there came growls from Washington and pressure on the Japanese to open their markets to U.S. manufacturers. Each time the Japanese bought off the pressure by relatively trivial concessions--limiting exports of textiles, steel and autos or buying more U.S. planes and electronic equipment.
Now the overall trade balance is seriously out of whack. America ran a record trade deficit last year, and the imbalance continues to rise. Foreign competition has weakened the whole manufacturing sector, making up a third of the total U.S. economy. Japan, with record trade surpluses last year and this year, is by far the biggest exporter to the U.S. market.
A tangled mass of connected mismatches underlies the commercial imbalance. America maintains big budget deficits while Japan squeezes down. U.S. interest rates are much higher than Japanese rates. The dollar is overvalued against the yen. Americans consume most of their disposable income (94% consumption against 6% saving) while the Japanese save 27%. Set against those heavy influences on the flow of money and goods, trade barriers carry all the weight of a paper fan.
But in this country the common view is that Japanese restrictions against the entry of American goods constitute the heart of the problem. Congress throbs with proposals for retaliation against Japan unless Tokyo opens up markets. One project or another could suddenly be enacted. For, as a recent 92-0 vote in the Senate indicated, there is no overt opposition to commercial retaliation. Stopping it is up to Japan.
But Tokyo is used to getting off easy after thunderclaps of pressure. Many Japanese businessmen think that America is bluffing. Prime Minister Yasuhiro Nakasone keeps announcing market-opening measures that don’t impress U.S. industrialists. In the end, sophisticated Japanese expect to buy off the Americans with yet another set of “voluntary” restrictions on exports to this country.
Perhaps the policy of mutual self-deception will work awhile longer. The recent decline of the dollar is certainly a plus. But it will be months, perhaps years, before the dollar drops to the point where the import penetration achieved by the Japanese begins to reverse itself. In the interim the stage is set for another accidental collision--an unintended clash between Tokyo and Washington that would break down the whole international economy.
So the two economic giants need to talk far more candidly than they have. The talk has to go beyond the charade of free trade vs. protectionism. The requirement is for an explicit understanding that brings into better alignment consumption and saving, interest and exchange rates, budget deficits and money supply--in short, all the major items of economic policy.
