Departing Words From a Blunt Tokyo Diplomat

It’s only right to allow Shotaro Yachi, returning to Tokyo after three years as Japanese consul general in Los Angeles, to have the last word about the fate of his beloved country. It was noteworthy that when the Japan-America Society threw a farewell dinner for the popular Yachi--slated for a foreign ministry position in Tokyo and perhaps a future ambassadorship to Washington--it had no trouble selling every ticket. Many people saw in him what’s not often observable in public life these days: a hard core of integrity.

The crowd honored this University of Tokyo-trained diplomat as a man who’d refuse to duck when asked whether Japan should do more to help chief ally America. Yes, he said, his nation must do a whole lot more. Nor would he bob and weave about the general quality of leadership in Tokyo. It was not great, he’d say, and for starters, it needed to bow a lot less to the bureaucrats. Perhaps Yachi’s greatest attribute, though, was not that he could be outspoken but that he also knew when to say nothing. Many months ago, a journalist asked him for positive comments about the seemingly resurgent Japanese economy. It was an easy opportunity to be officially positive, but Yachi knew that Japan was still struggling. So he refused to respond--i.e., to lie.

This blanket policy of honesty meant that Yachi, a tall, thin man with a wry smile and a passion for golf, had to suffer in silence as global criticism of Japan mounted. “There are very few people in the U.S. government who believe Japan is out of the woods,” says one prominent Clinton official who prefers to remain anonymous: “The Japanese are not undertaking serious structural reform. That’s why no one here believes that Japan is back.”

Yachi also knew that the world’s Marxists were becoming giddy over the prospect of collapse, because Marxists believe Japan may well be the capitalist system’s San Andreas Fault: If it splits open, the whole capitalist landscape could fall apart. Writes City University of New York professor William K. Tabb, in a special end-of-millennium issue of Monthly Review, a Marxist journal: “As the world’s second largest economy, its situation, somewhere between deep pessimism and panic, is so important. . . . Just as Japan has led the evolution of capitalism for much of the last half century, its inability to resolve its contradictions in the 1990s may foreshadow the future of capitalism. The Japanese economy is now the 800-pound albatross of world capitalism.”

Even prominent non-Marxists, like MIT’s Paul Krugman, worry about the meaning of Japan’s malaise: “What has happened to Japan is both a tragedy and an omen,” he writes in a brilliant new book, “The Return of Depression Economics.” “Even worse than the performance itself is the sense of fatalism and helplessness.”

It was at the very end of his three years that Yachi had had enough of the doom and gloom. He could not accept the view that Japan was sitting on its duff, eyes wide shut, hoping things would get better on their own. In private comments as well as in a few public speeches, he’d make the point that Japan was neither brain dead, resource poor, nor oblivious to what the world was saying about it. He’d quote the great German Joseph Schumpeter’s endorsement of “creative destruction,” an economists’ term for hurricane reform that sweeps the weak aside to shore up the stronger. “Japan is creating a good climate to unleash the forces of creative destruction,” he’d insist.

It was a good thing, he’d also say, that bad companies were failing, that long-closed markets were opening, that long-delayed deregulation was finally happening. In fact, all that was needed to get Japan moving again, he’d say, is for the Japanese to get wild and go on a spending spree. “If we want to promote consumption,” he’d say with a twinkle in his eye, referring to the penchant of Americans for conspicuous consumption, “we have to stimulate a large demand for unnecessary things.”

But if too many Western critics blame Japan’s big stumble for spilling over and depressing the economies of much of Asia, Yachi would not blame Japan’s troubles on anyone but Japan’s leaders themselves. “The world has changed around us,” he says. “We need an economic system supporting originality, creativity, real entrepreneurs and venture business. Japan cannot exist in the status quo.” He believes Japan will shed its old skin: “The economic hangover of the bubble economy will, one day soon, be viewed less as a disaster, and more as the precursor to a new, and even more competitive, Japanese economy.”

Who’s right? The sneering Americans and the all-knowing Marxist-pessimists--or this blunt- speaking man who truly cares about his country? I know who I want to be right. I also know who should have the last word.