Century of the Americans Is Far From Over

Is Japan the new champ? The fashionable subject this year seems to be Japan as superpower, as the Asian nation’s economic success has some people talking as if Japan is Mike Tyson and the United States a battered Michael Spinks.

“Japan is pushing toward center stage,” said historian Paul Kennedy, author of “Rise and Fall of the Great Powers,” in a recent Time magazine article. “The American century is over,” chimed in Clyde Prestowitz Jr., author of “Trading Places: How We Allowed Japan to Take the Lead,” another topically gloomy book.

But those are rash and superficial judgments that fail to understand Japan’s postwar history or the importance of America’s vision for the world. They even misread the present strength of the Japanese economy.

To be sure, Japan has made great strides in the 40 years since the postwar occupation of Gen. Douglas MacArthur and his teams of U.S. experts reformed its economic and social system. Japan has earned its leadership in many industries.

But there are frightening imbalances in Japan’s economy, too--most prominently in land. So inflated is Japanese land these days that the 145,807-square-mile land area of Japan is said to be equal to twice the value of the whole 3.6-million-square-mile land area of the United States.

But that’s a danger signal, not a sign of strength. Land and housing in Tokyo have shot to such prohibitive prices that it has become a national problem--preventing the development of housing for many of Japan’s people and threatening to curb the growth of the domestic economy.

It’s no less a problem for being hidden: Japan does not include housing or land in its cost of living index. So while Japan officially showed almost no inflation last year, the price of Tokyo apartments rose 200% to an average of $1.6 million apiece.

Furthermore, sky-high prices on the Tokyo Stock Exchange are based heavily on corporate holdings of such inflated real estate. So Japan appears headed for a crash of stock and land prices.

The problem is more political than economic and everybody talks solutions. Some experts call for government regulation to free up property for development, while businessmen call for deregulation of zoning that keeps Tokyo acreage designated as untouchable farm land.

And more than one economist thinks that it will be solved in a typically Japanese way with government policies encouraging economic growth and tolerating inflation. “Yes, declining prices would be one way to adjust,” says Takashi Kiuchi, senior economist at the Long Term Credit Bank of Japan. “But nominal prices may not need to decline if growth and inflation bring other prices into closer relationship.”

Japan has had high inflation before, in the 1960s when its economy speeded up and in the 1970s following the oil price rise. Each time, the combination of powerful government policy and energetic industry brought it through.

‘Groping for Goals’

Sure, inflation might weaken the strong yen and take the wind out of lofty appraisals of Japan as the new economic superpower.

The Japanese could not care less. It is foreigners who make such appraisals while Japan in reality is a nation “groping for goals,” says Naohiro Amaya, a veteran of Japan’s influential Ministry of International Trade and Industry.

Yes, Japan has achieved its economic goal of catching up to the West, concedes Amaya, but it did so on a vision brought to it by the Americans.

“Gen. MacArthur gave us the idea of freedom and democracy,” says Amaya, understanding like many Japanese leaders the benefit of land and economic reform. “Without that democratic reform, today’s prosperity may not have been possible.”

So it is to America that Japan looks again for vision, because America embodies the ideal of world leadership--an open society that embraces all people and a concept of individual worth that transcends economics. As one Japanese official puts it--in words that might grace a Fourth of July oration--America is more than a single country.

“Whatever his race, whoever goes to the United States can settle there and be given citizenship,” says Hiroshi Takeuchi, director of research at the Long Term Credit Bank. “Therefore, America is not a single country, it is the world.”

In Japan, by contrast, “all foreigners are repelled at the coastline and the limits of a homogeneous people have begun to emerge. So the new goal must be one that changes the consciousness of the Japanese as a homogeneous race.”

And the goal Japanese leaders talk most about today is the Pan Pacific concept, the idea that Japan can help the emerging Koreas and Taiwans and Thailands.

More than foreign aid is involved. What Japan can do, say its leading thinkers, is bring democracy to these nations as the Americans brought it to Japan.

That is why the Japanese fret about America’s budget deficit; they fear it will hobble its essential power. “American presence, not only military but economic and political presence, is essential in this part of the world,” says a Japanese leader.

The vision of the great work of democracy started by MacArthur now carried by Japan to its neighbors is a noble one. It is a vision of the continuance, not the end, of the American century.