TURMOIL ON TOP : A World of Changing Leaders, Struggling Governments and Strange Bedfellows : Japan: Angst Washes Over the Nation

<i> Joel Kotkin is an international fellow at the Pepperdine University School of Business and a senior fellow at the Center for the New West</i>

Last week’s stunning defeat of Japan’s ruling Liberal Democratic Party tapped a deep-seated, growing discontent in the island nation. After four decades of political stability and economic ascendancy, the Japanese seem to be losing faith in their nation’s system and its prospects for the future.

Political disaffection, evident from last week’s voting, represents one major element in this rising tide of Asiatic angst . Through corruption, arrogance and insensitivity, the Liberal Democrats alienated a majority of voters. Yet there seems only limited enthusiasm for the victorious opposition, particularly the Socialists, who few believe capable of running the government.

With the ruling party discredited and the opposition lacking stature, the real loser may be the Japanese political system itself. “We are at the edge of Niagara Falls,” warned Jiro Tokuyama, one of Japan’s foremost economic thinkers and a longtime adviser to the LDP leadership. “We are good at dealing with outside crisis--the oil shock of the 1970s or the yen revaluation today--but now the collapse is coming from inside.”

A pervading sense of “collapse” goes beyond politics. The scandal embroiling top business and political figures with the Recruit Cosmos Co.--precipitating the current crisis--only confirmed a mounting, broader disquiet about Japan’s much- admired economic system and those who inhabit its highest circles.


In the decades after World War II, economist Hiroshi Takeuchi noted that the most prominent business figures were often industrial entrepreneurs, such as Soichiro Honda and Akio Morita, men whose personal accomplishments were admired and seen as beneficial to the nation as a whole. Today, Takeuchi sees much of the big money coming from real estate and stock speculation, activities that engender little admiration from the average middle-class Japanese.

“Our national culture is being eroded,” said Takeuchi. “Our values, our belief in hard work and industry, are falling apart. Those who work the hardest get the least. That undermines everything.”

Even more frustrating, as the rentier class has grown almost obscenely rich, the quality of life for the average Japanese salariman , or white-collar worker, has stayed the same or even worsened. Despite the image of Japan as a rich, successful country, many Japanese increasingly wonder if the economic system still works for them.

Consumers, for instance, have barely benefited from the rapid rise of the yen over the last few years. Prices for imported food and manufactured goods should have gone down markedly; they did no such thing--due largely to a politically fixed and inefficient distribution system. A cup of coffee still costs three times as much in Tokyo as in Los Angeles. Small wonder Japanese voters reacted with such vehemence against the ruling party’s consumption tax that added 3% to virtually every necessity.


The housing situation is even worse. As trade surpluses increased the supply of money, land prices soared to three or four times U.S. levels for residential real estate--and about 30 times higher for industrial land. The dream of owning a small house in the suburbs--with a 90-minute commute to town on a crowded train--is slipping away for all but the wealthiest Japanese.

Recent polls show the level of satisfaction among Japanese--in terms of food, shelter and general quality of life--has been dropping since the mid-1980s. For the average salariman , the quality of life, according to Long-Term Credit Bank estimates, remains at levels roughly half those enjoyed in the United States, West Germany and other advanced nations. “Everyone is beginning to realize that the trade surpluses have not helped our lives at all,” said Takeuchi.

Recent polls indicate that less than 20% of the Japanese believe life will improve in the years ahead. This negativity about the future stems from a variety of perceived threats, ranging from economic causes to more generalized concerns such as the environment or social decay. “What is selling now in the stores is anxiety,” said one of Japan’s leading booksellers. “There is tremendous sense that this so-called prosperity is a temporary thing. In three years, five years maybe, the bubble will burst.”

The new generation seems particularly affected by such pessimism. Unlike their parents, so often willing to sacrifice personal needs for the good of country and company, many young adults adopt nihilistic attitudes not so unlike the “I want it now” of 1980s America. Many of Japan’s best and brightest now think more about making a quick buck than boosting Japan’s economic or technological prowess.


This year, for example, roughly half the graduating computer scientists at Tokyo University opted for careers in banking and insurance, largely because those fields now pay up to 50% more than industrial companies. “We are moving from an industrial culture to a money-flow culture,” said Tosiyasu L. Kunii, chairman of the university’s computer science program. “We are seeing all the worst of the American corruptions.”

Although the United States suffers many similar problems, Kunii points out that America retains key assets lacking in Japan, such as immigration of foreign professionals and a buoyant entrepreneurial sector. As a result, he doubts his nation will ever surpass the United States in technological innovation.

With a lack of new immigrants and a falling birthrate, Japan is rapidly aging, its percentage of elderly projected to be more than double that of the United States by the year 2000. For the current generation of baby boomers, this means dealing with huge costs of care for the elderly and a declining pool of younger workers to supervise, sharply limiting opportunities for advancement.

Lack of upward mobility contributes to an alienated business class. A recent poll of executives in their 40s, found more than a majority dissatisfied with their jobs. The sense of mission that characterized earlier generations has been replaced by a sense of ennui.


None of this suggests that Japan will fade as a major world power in the decades ahead. Americans, Soviets and Western Europeans face equally profound if divergent crises of confidence and self-image. The difference is that Japan--long a model of unparalleled success--can no longer avoid the angst afflicting other leading nations.