Mike Millard's Revealing Take on Japan
This review of Mike Millard�s book, which I posted here last April, somehow never made it into our archives. I am therefore posting it again. The book offers vital clues to the depressing truth about America�s dysfunctional relationship with Japan. Far from earnestly trying to Americanize itself, as American policy-makers have long fondly imagined, Japan continues to frustrate all American hopes of a convergence towards American values. The implications for American trade policy are unmistakable: the time for patience is gone. By Eamonn Fingleton.
TOKYO. Japan is at the core of the American trade disaster. Its contribution is not merely its huge surpluses � though these rank with China�s as by far the world�s largest. The nature of Japan's export activities has been particularly devastating for the United States because, in sharp contrast to the labor-intensive products that China exports, Japan has been concentrating its attack more and more in highly capital intensive industries that were once disproportionately important in maintaining America�s edge in global competition. Moreover Japan is the undisputed ring-leader of East Asian mercantilism. Under Japan's influence � and often indeed its tutelage � other East Asian nations have one after another adopted remarkably similar approaches to trade. Not to put too fine a point on it, Japan taught the rest of East Asia how to cheat on trade; how to target American markets; how to winkle technology transfers out of the United States; how to circumvent America�s dumping laws; how to mislead the American press about their true trade agenda; and how to stonewall every market-opening request from Washington. The significance of all this is hard to exaggerate. For, in the absence of East Asia�s chronic trade surpluses, America�s trade would today be in broad balance with the world. Even more important, America manufacturing would not be the hollowed out hulk it is today but rather would still enjoy the sort of lead it had in the 1950s and 1960s.
Books on Japan: a tower of Babel
In the circumstances it is past time that Americans understood Japan. But where should one start in trying to unravel the mystery of this notoriously enigmatic country? The problem is that America�s Japan watching community is a tower of Babel. For every statement in one book, you will find a directly contradictory statement in another. There are many reasons for the chronic confusion. Let me here mention just two. First, the Japanese politico-economic system simply does not want to be understood. Quite the reverse. It has a long record of fostering misperceptions about itself and its agenda. Secondly, most books are written by people who have few if any credentials in the field. Many authors indeed have lived no more than a few months in the country. Some have spent no more than a few weeks. Yet their lack of experience seems to do nothing to inhibit the audacity of their insights. Authors like this are putty in the hands of Japan's legion of official � and unofficial � spokesmen. Unfortunately authors of this type account for by far the majority of all books written on Japan.
In view of all this, it is particularly refreshing to Mike Millard�s new book Leaving Japan: Observations on the Dysfunctional U.S.-Japan Relationship (M.E. Sharpe, 2001). Based on eleven years living in Japan, this book is positioned modestly enough as a series of personal reminiscences on several aspects of Japan. As such, the book makes no attempt to offer any ambitious new �unified field� theory about how the country works. Millard knows his subject far too well to offer any catchpenny intellectual shortcuts. What he does do, he does well. For Millard is an acute and thoughtful observer who asks the right questions and delivers the answers in an elegant, clear style that makes the book a joy to read.
Is America asleep at the wheel?
As the title suggests, a recurring theme in the book is the absurdities of the U.S.-Japan military and economic relationship. He points out repeatedly that, unbeknownst to the American public, the U.S. has struck a Faustian bargain with Japan. In return for its right to maintain military bases on Japanese soil, the U.S. has thrown its markets more or less unconditionally open to Japan. As the Japanese system has �targeted� one American industry after another, the results have been devastating for America�s almighty manufacturing base.
Millard comments: �The relationship is so one-sided it makes you wonder who has been asleep at the wheel in the United States.�
As Millard points out, American spokesmen such as former Assistant Secretary of Defense Joseph S. Nye have touted America�s extraterritorial defense capability as a wedge �to open foreign markets.� Where Japan is concerned the reality is precisely the opposite. Every time the U.S. Commerce Department makes the slightest attempt to pressure Japan on trade, the Japanese make subtle or not so subtle threats that they will ask the American military to leave. Taking these threats at face value, the Pentagon pressures each succeeding American president to rein in the Commerce Department.
Millard points out that though conventional wisdom has it that Japan is converging towards American political norms, the truth is the opposite. As he points out, the Japanese system of �money politics� in particular has now been transplanted to American soil. He comments: �We see political influence purchased in the United States to rig trade in favor of Japanese industry and from that we infer that it is not Japan that emulates America, but the opposite.�
Perhaps Millard�s most important contribution is his consistent debunking of Japan's presentation of itself as a Western-style democracy.
The idea that Japanese society is based on such Western values as liberty and equality is little more than a convenient fiction. Describing Japan as a soft authoritarian state, he explains: �The way Japan is organized today � despite some changes wrought by the U.S. occupation and the Meiji restoration � is essentially a modern adaptation of the political and social controls instituted under the military dictatorship of the Tokugawa shogunate from about 1600 under the mid-nineteenth century, a period when Japan was heavily bureaucraticized, largely closed off from the world, and in a state of not only isolation but of suspended development.�
The myth of a �changing Japan�
For those concerned with America�s trade relations with Japan, Millard�s book contains many practical insights of great importance. For one thing, his presentation of Japan as a soft authoritarian society immediately gives the lie to the �changing Japan� assumption that has for decades has stayed Washington�s hand in its trade relations with Tokyo. Japan is not changing in any way that is likely to give America�s most sophisticated manufacturers a fair chance in the Japanese market. Nor is it ever likely to change in such a way.
The forces of individualism have never had much influence over Japan's destiny. This applies in spades in the case of Japan's economic policies. To the extent that Japan's economic policies change at all, the changes are dictated from the top by authoritarian bureaucrats whose concern at all times is not consumer welfare but the long-term national interest. The implications for American trade diplomacy are obvious. It is far too late for sweet talk and for patiently waiting for the long-predicted Americanization of political attitudes among Japanese voters to work a democratic transformation. It is time to take the bull by the horns and make Tokyo�s trade bureaucrats an offer they cannot refuse.
Eamonn Fingleton is the author most recently of In Praise of Hard Industries: Why Manufacturing, Not the Information Economy, Is the Key to Future Prosperity (Houghton Mifflin, 1999).
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