Americans had a somewhat stranger and, shallower romance with
Japan. For them, the encounter was as military men with their families,
who flooded into Japan during the early 1950s to support operations in
Korea and later in Vietnam. Air Force families had fond memories of a
charming country peopled by strange yet amiable folk, affording an
opulent lifestyle replete with luxurious homes, servants, and nannies,
well within the reach of enlisted men and junior officers. These fond
memories have mingled together to conjure an image of a charming, quaint,
and utterly harmless and accommodating country.
Neither image is really correct--this was no marriage. It was,
rather, two nations that had, until August 1945, loathed each other with
a passion as difficult to recall as it was brutally real, coming to terms
with the unpleasant fact that they had to live with each other and making
the best of a bad deal. But it was no reconciliation. Quite the contrary,
this was an accommodation between two countries that had never really
understood each other, never really liked each other, but had, ever since
their emergence as great Pacific powers, found it impossible to avoid
each other.
Missing the underlying tension is what contemporary observers of
U.S.-Japanese relations do best. When they call for greater
understanding, they forget how far apart these two countries' interests
are, and how different history and nature have made them from each other.
For all the history, it is not clear that either has the slightest idea
of the difference between what the other says he wants and what he really
wants. More important, they do not understand what the other needs and
must have. These are two countries with fundamentally different psyches,
different understandings of how the world works and what their
relationship to that world is.
We find the essential differences in their geographies, differences
that shape their very soul. Indeed, to begin to understand the
difference, we must begin with something even more basic than geography:
geology. Japan is a geological freak. It lacks almost all of the raw
materials necessary for an industrial economy--they have to be brought in
from overseas. For every pound of Toyota or Sony that Japan ships out, it
must import eight pounds of raw materials. The greater its industrial
production and the more successful Japan becomes, the more dependent it
is on foreign natural resources. If anything interferes with the flow of
these materials, Japan ceases to be an industrial power. They are
extremely aware of the fact that they have no safety net, nothing to fall
back on.
It is hard to think of the Japanese as being wild gamblers, yet
their entire history has been a wild and improbable gamble. They gambled
their heritage that they could industrialize and keep their traditional
values. They gambled that they could forge an alliance with Great Britain
during the 19th century and live to tell the tale; they gambled that they
could subdue China in the 1930s; they gambled that they could strike at
Pearl Harbor and get away with it. Finally, they gambled that they could
become a protectorate of the United States and prosper. Japan's geography
made them gamblers--calculating and rational, meticulous and painstaking,
but gamblers, plungers nonetheless.
Of course, there is a staid and sober side to the Japanese. After
all, the key to their economic gambling is their savings rate. Japan
began to industrialize well after the other great powers did, and they
had to industrialize in a very different way. Britain began by satisfying
a domestic demand for new products; the United States by selling its
agricultural products overseas and using the proceeds to build its
industry. Japan, on the other hand, had to play catch up, but lacked any
commodity the world wanted. So it sold its labor in the form of
industrial exports--made cheap by low wages and financed by its extremely
high rates of savings, which survive until this day.
Japanese savings rates are legendary and envied throughout the
world. They save about 15 percent of their income, and the common
assumption is that there is some strange internal discipline that makes
the Japanese virtuous. But it has little to do with Confucianism, or work
ethics either. It has to do with the fact that Japan has the worst
retirement system in the industrialized world. (A worker earning $50,000
a year is forced to retire at age 60 at about 20 percent of
pre-retirement pay, if he is lucky. You can get anyone to save on those
terms.)
The neat part of this is how savings are invested. Small depositers
use the post offce banking system run by the govemment; it pays about 3
percent a year interest. The Bank of Japan then lends this huge,
continual cash flow to the large "city" banks at a tiny premium. The
banks turn around and lend it to their keiretsu linked corporations at 7
or 8 percent. So, while General Motors was modernizing at rates as high
as l 5 percent in the 1970s and '80s, the Japanese--living in a rigidly
controlled, non-market financial system--were retooling at 7 or 8
percent. Is it any wonder that Toyota has a more modern industrial plant
than GM's?
What this means is that, for nearly a century, Japan's industrial
success has been fueled by an exploitation of the Japanese public unheard
of in the industrialized world.
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Cold War,
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