JPRI Critique Vol. XXII No. 1 (January 2016)
A Love Letter to Japan
Sheila K. Johnson

Review of Japan Restored: How Japan Can Reinvent Itself and Why This Is Important for America and the World
by Clyde Prestowitz
Tuttle Publishing, 2015, 287 pp

From 1981 until 1986, Clyde Prestowitz served as a Counselor to the Secretary of Commerce during the Reagan administration. In that capacity, he was a frequent visitor to Tokyo as a trade negotiator, arguing for lower tariffs on American goods and a "more level playing field" in cross-Pacific trade. He also became known among some Japanese as a "Japan basher," a term that still rankles him. Fifteen years earlier, in 1965, he and his wife had spent a year living in Japan as students and had fallen in love with the place, and he remains so, although it's the more mature love of someone who can also see the flaws in the object of his affection.

In 1993, Prestowitz published Trading Places, the subtitle of which—How We Are Giving Our Future to Japan and How to Reclaim It—more or less summarizes the message of the book. That book, and others he's written since as President of the Economic Strategy Institute, have focused on the U.S.'s economic ills and missteps and what we must do to remain competitive. His latest book, Japan Restored, is aimed at Japan, but less as an attack on its shortcomings than as a utopian vision of its possible future.

Well aware of Japan's aging population, its economic doldrums since the 1990s, the Fukushima disaster, and its difficult relations with China and South Korea, Prestowitz tries to imagine how Japan might solve all of these problems by 2050. As he notes, the country has renewed and reoriented itself twice before: during the Meiji Restoration and again after its defeat in World War II. No reason why it couldn't do so now.

To imagine this future Japan, Prestowitz takes us there in 2050. We land at Haneda—much more conveniently located than the former airport at Narita—having flown in a supersonic jetliner built by Mitsubishi Heavy Industries, which took over Boeing in 2025. Long before that happened, in late 2016, Sony merged with Samsung. Okinawa voted to become independent in 2017, and Japan reached an agreement with China to jointly administer the Senkaku/Daioyu Islands, but not before an unpleasant military confrontation. Also in late 2016, Prestowitz predicts that Israel will bomb nuclear sites in Iran, closing the straits of Hormuz temporarily to oil shipments and thereby forcing Japan to radically rethink its energy policy and needs.

These are provocative scenarios, and in some cases we won't have to wait until 2050 to find out whether they come to pass. But having piqued our curiosity, Prestowitz turns to a broader discussion of Japan's current problems and how they might be solved. Rather than taking credit (or blame) for any of the suggestions, he imagines that shortly after the 2016 Japanese elections the Diet creates a sort of modern Iwakura Mission, which—like the group of diplomats and scholars the Meiji Oligarchs sent abroad in 1871 to study how Western societies were organized—will study and make recommendations. Prestowitz even identifies some members of this future National Revitalization Commission: Kazuo Inamori, founder of Kyocera; Carlos Ghosn, the CEO who revitalized Nissan; Masayoshi Son, the founder of SoftBank; Hiroshi Mikitani, founder of the e-commerce company Rakuten; Fumiko Hayashi, mayor of Yokohama; and "even some foreigners familiar with Japan" (perhaps including the author, since one of the members of the Commission is described as "an American who had had long experience as a trade negotiator with Japan, and who had been appointed in order to lend an outside perspective to the Commission's work" (p. 128).

Prestowitz begins his analysis of Japan's current economic woes by asserting that these are chiefly caused by its demographics. Japan has a rapidly aging population (by 2050 some 38% of the population will be over 65) and the current birthrate is well below replacement. Since there is also little permanent immigration into Japan, Prestowitz predicts that by 2050 "today's 124 million Japanese could become as few as 88 million." Some people think this might make for a less crowded, ecologically friendly environment, but from an economic standpoint Prestowitz foresees dire consequences: fewer workers supporting a large retired contingent, exhausted pension funds, fewer consumers, and "the number of young people available to fill the ranks of the Self-Defense Forces would fall just at the moment when the potential for military conflict with China appeared to be rising and the relative strength of the United States declining" (p.86).

The answer the National Revitalization Commission proposes is similar to programs in Scandinavia and France: better child care for working women so that more of them would want to have more children (and also stay in the workforce), larger houses so they could employ household help (it is currently possible for a foreigner living in Japan to obtain a visa for a nanny from the Philippines but not for a Japanese household to do so), more flextime employment opportunities for both men and women and maternity or elder-care leave for both. And, needless to add, allowing more permanent immigrants into the country. Such immigrants, according to Prestowitz and the Revitalization Commission, should be sought particularly among "foreign technologists and experts in fields such as software engineers, biotech research, and systems analysis: all areas where Japan [is] relatively weak. . . . [and] all children born of parents domiciled in Japan [should be] granted Japanese nationality" (pp. 106-7). These are all excellent suggestions, but one wonders whether Japan is ready to abandon its jus sanguinis criterion for citizenship, far more widespread among the nations of the world than its alternative, jus soli, although perhaps some sort of mixed system might be adopted. (See my review of Debito Arudou's "Embedded Racism.")

Prestowitz's ideas for revitalizing Japanese businesses are equally radical, as he proclaims in one of the chapter titles: "Japan Becomes an English-Speaking Country." He argues that "Tokyo [has] always been an attractive city to foreigners because of its high level of public safety, good flight connections to other major centers in Asia, flawless public services, unparalleled infrastructure, and good educational services. But it [has] always been behind Hong Kong and Singapore as an Asian headquarters city for global corporations, largely because of the language issue" (p. 116). He cites Rakuten and Nissan as companies where English is already the language of communication.

In order for Japanese to become truly bilingual in English, however—as the Dutch and Scandinavians are—much needs to be done. Instead of the JET program, where English-speaking students spend a year in Japan as adjuncts to English teachers, the teachers themselves should be required to take a proficiency test and those who do not pass should be "either asked to take retirement or to undergo intensive training to elevate their scores . . . within one year" (pp. 131-32). I leave it to readers familiar with American teachers' unions to imagine how well this might succeed in Japan, where such unions are equally strong. Other suggestions include "legislation . . . to establish English as an official language of Japan by 2025. . . . all publications, forms, public signs, and other official statements had to be available in English as well as Japanese. It also meant that speeches in the Diet and at other official events could be made in either English or Japanese" (p.133). I believe the wholesale abandonment of Japanese was also discussed during the American Occupation and wisely rejected. It is daunting to imagine an entire culture robbed of its native language, spoken and written, as the Japanese should well know, having tried to impose just that on Korea when they conquered and annexed the peninsula in 1910.

When it comes to revitalizing Japanese business, Prestowitz (in the guise of the Commission) suggests many other changes. The seniority and lifetime-employment system needs to be abolished; the keiretsu network of companies and their suppliers and cross-shareholdings needs to be breached; more investment—both domestic and from other countries—needs to occur in small, start-up companies; and the pension system overhauled to make pensions portable when people change jobs, as is the case in Western Europe. These are all good ideas that have long been debated in Japan, but one wonders how easy they would be to execute.

Prestowitz is more cautious when it comes to the revamping of Japan's energy policy. He calls for energy conservation and the usual diversification into various clean energy sources—solar, hydroelectricity, geothermal, biomass (fuel derived from wood, switchgrass, etc.)—but he does not rule out nuclear power and restarting some of Japan's nuclear reactors after they've been thoroughly vetted in the wake of the Fukushima disaster. More interestingly, he advocates building new nuclear plants based on America's Argonne Integral Fast Reactor (IFR). Such a reactor "could operate by burning nuclear waste from traditional reactors, and would reprocess its own fuel until the final waste contained no dangerous elements and could essentially be thrown into a normal garbage can" (p. 190). They are safe in earthquakes and tsunamis because any stoppage of the coolant flow stops the nuclear reaction, preventing a meltdown. Prestowitz adds as an aside that in 1994 Congress discontinued the Argonne project three years short of completion.

Among the many energy problems highlighted by the Fukushima disaster was the need to revamp Japan's energy grid. The power companies, known as EPCOs (Electric Power Companies) are currently vertically integrated—that is, they both produce and distribute energy in a particular region—and are poorly connected to each other. Thus, when the Fukushima plant went out of operation, Tokyo suffered a serious power loss and it was not easy to bring in power from western Japan, which had plenty. In February of 2015, the Abe cabinet issued a decision to create separate generation and transmission companies, but Prestowitz comments that "the feasibility of this plan was not clear, and whether the grids would be fully integrated, who would actually own them, how new technology would be incorporated, and how new energy generation sources would be connected was still to be determined" (p. 183).

How Japan will interact with its neighbors and the rest of the world in 2050 is also difficult to foresee. Prestowitz paints a glowing future in which Japan will finally have a permanent seat in the UN Security Council and have military cooperation and mutual security treaties with South Korea, the Philippines, Vietnam, Malaysia, and Indonesia. In other words, it would be a sort of recreation of Japan's wartime Greater East Asia Co-prosperity Sphere minus China. Prestowitz argues that this is highly desirable because the U.S. is withdrawing troops and ships from the area and also because it no longer wants to play the role of lone superpower. In the case of Okinawa, for example, he envisions that Okinawans vote for independence in 2017, provoking Tokyo to consider sending in its Self-Defense forces. But "warnings from both Washington and Beijing cooled that instinct . . . [and] eventually a real deal to shift US bases and to give Okinawa more autonomy was worked out" and Okinawans rescinded their independence vote (p. 81). Clearly, in forecasting Japan's international role, much depends not only on Japan itself but on the U.S., China, and North and South Korea.

Finally, Prestowitz envisions a Japan in which its powerful bureaucracy is disbanded. He argues that the centralized nature of Japan's government stifles innovation in both business and daily life. Where it now takes "four or five different permits from Tokyo just to move a stop sign" and all land-use decisions are also controlled by the central government, Prestowitz sees a future Japan in which there is much more local autonomy. In fact, he imagines that the forty-seven prefectures will be replaced by "fifteen large regional cantons organized similarly to the states of the United States or the Lander of Germany" (p. 261). Each canton would have a legislature and a governor but also the taxing power now vested in the national government, including income tax and corporate taxes. "The old national system for the recruitment of civil servants [will have] been abolished and each new prefecture [will have] its own civil service exam and decide itself what the terms of employment of civil servants will be in its region" (p. 262). Only national security and foreign policy will remain the monopoly of the central government.

I'm afraid this last proposal strikes me a bit as a "be more like us" idea, and looking at the United States' serious conflicts between states' rights and the federal government, I wonder whether it doesn't amount to a sort of Tea Party agenda for Japan. Perhaps it would even generate new conflict between the Choshu and Satsuma clans and regions. Of course, that may be one of Prestowitz's points . . . that the Japan of the future needs more regional competition in terms of attracting new businesses and ways of doing things. This book will appear in a Japanese translation in the summer of 2016, and I'm fairly confident it will attract a lot of commentary and attention. Japan has long been susceptible to gai-atsu, meaning "foreign pressure", or—to put it more diplomatically—letting an outsider say something that insiders know to be useful and true but for politeness sake would rather leave unsaid.


Sheila K. Johnson, Ph.D., is an anthropologist and the author of The Japanese through American Eyes (Stanford University Press) and Idle Haven: Community Building Among the Working-Class Retired (University of California Press), along with numerous articles and reviews. She is on the Board of Directors of JPRI, and the widow of its founder and first president, Chalmers Johnson.


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