Not the future, not the past, but often ahead of the curve
A BBC correspondent employs an ethos from the past to suggest that Japan cannot progress to the present.
“Japan was the future but it’s stuck in the past” reads the title from departing BBC correspondent, Rupert Wingfield-Hayes, the final article of his 10-year stay.”
Japan as the future? That was certainly held to be true in the mid 1980s, when the Japanese nation was drowning in cash. The 1987 Wall Street stock market crash was shrugged off by the Tokyo exchange. The financial commentators were stunned. A real estate bubble may well have been in play but “this time it was different”. The good times would surely roll on.
A bubble, however, is a bubble. It inevitably burst and a banking crisis ensued. The economy duly stalled. Reserve bank intervention concluded with interest rates reduced to near zero.
Admiration turned to derision. “Japan-passing” and “lost decade” were coined. Advice was routinely forwarded from the West in a tone of authoritarian scorn.
The demise of the Soviet Union drove the U.S. to 1980s-Japan levels of self assured chauvinism. The rise of the internet economy propelled the U.S. to new highs. A real estate bubble was born. But hey, no problem, derivatives, “instruments” and “products” mitigate risk. Good times will roll on.
A bubble, however, is a bubble. It inevitably burst and a banking crisis ensued. The economy duly stalled. Reserve bank intervention concluded with interest rates reduced to near zero.
So was Japan the future after all? Perhaps it was, although that designation is generally applied with a sense of hope and optimism which Japan failed to provide. A better codification might be that Japan was a lesson unlearnt. In any event, we can safely say it was ahead of the curve.
Post crash recoveries
The West has bounced back from its 2008 crash yet “property prices” within Japan “have yet to recover” states Wingfield-Hayes. True, and given, as Wingfield-Hayes duly notes, the grounds of the Emperor’s palace were once valued on par with all of the real estate in the state of California, they probably never will.
But there are other reasons for the sluggishness of the Japanese real estate market as well. During the decade that I have been living in my current apartment in the Tokyo area, there has never been a year when between 200-500 units have not be constructed within a 500 meter radius. While that continues, the price of my apartment is highly unlike to appreciate.
Compare my reality to what has become the norm in the more desirable cities of the West. An influx of wealthy foreigners has driven up property prices by many multiples over the past thirty years, while development restrictions have curbed supply. Great for the stat sheets of the economists, and fine if you are happy for the jewels of your hometown to be foreign owned, but disastrous for artists searching for dirt cheap rent, and highly problematic for those hoping to buy their way in.
A Financial Times article recently characterized the London property market as an inheritocracy—inheritance or “The Bank of equity-rich Mum and Dad” being the only option for most young Londoners wishing to settle in the city of their birth. Property in Japan, even within Tokyo, is within reach.
The Japanese government has “failed to improve living standards for 30 years” Wingfield-Hayes thus concludes. I sympathize with his complaints about the stagnation of real wages, but there is more to the living standards calculation than the amount of take-home pay.
Depopulation dilemmas
A further part of the housing affordability equation is the Japanese aversion to immigration and its presently decreasing population, against which Wingfield-Hayes predictably rails. “If you want to see what happens to a country that rejects immigration as a solution to falling fertility, Japan is a good place to start” he complains. “Incomes in South Korea and Taiwan have caught up and even overtaken Japan.”
One has to question the link between immigration and South Korea’s rise when the demographic woes of South Korea are far more severe than those of Japan. It is surely more the case that South Korea and Taiwan were simply tracking a generation behind Japan through the status of developing nation to a condition of economic maturity.
But on this issue as well, it is Japan (as well as South Korea) that is blazing the trail, albeit on a trail that is presently devoid of much direction. As outlined in JAPAN Forward in June 2022 (and echoed in the Economist a single week later), the world population will drop below the 2.1 replacement threshold within as little as thirty years. The present western assumption of population deficiencies being made up by immigration can continue for a generation or two, but the indefinite application of that policy is a fantasy. Every nation will one day find itself with the demographic challenges of present day Japan.
Concrete countryside
A standard charge leveled against Japan is wasteful infrastructural spending and Wingfield-Hayes does indeed make it, but his chosen product of “dubious utility” upon which “huge amounts” of public money are wasted is something of a surprise. He opts for, not the tunnels and bridges of questionable necessity, nor the Olympic games, but the decorative manhole covers that depict images and themes of the towns or regions in which they are installed. “They are works of art” Wingfield-Hayes concedes, but “each one costs up to $900.”
“I chose” manhole covers because they are “a more interesting and engaging example of questionable spending than the many others I could have gone to” replied Wingfield-Hayes, to this writer on social media. Maybe, but near all who read the article find the choice of example bemusing. It’s not hard to think of alternatives in which money has been worse spent.
Less newsworthy than tunnels and bridges to nowhere (and manhole covers), however, are the infrastructural developments which millions can enjoy. As resident of Tokyo, Wingfield-Hayes must surely have noticed the change. He first ventured to Japan in 1993 (after the bubble had burst) and was struck by how “exquisitely clean and orderly Tokyo was compared to any other Asian city.” Do we take that to mean that it was cleaner than Asian cities but not those of the West? One wonders if he realizes that Tokyo is immeasurably cleaner and more modern today than it was in his arrival year.
Taking the Tokyo area rail network as an example, there is precious little comparison between its 1993 and 2023 manifestations. During the so-called lost decade of the 1990s, three additional subway lines were constructed. Along the network as a whole, elevators and escalators have been installed, train designs have been regularly renewed, disparate lines have been connected, stations have been modernized, some with expansive shopping malls enclosed.
Ginza subway station, restored in 2020, is stunning—another “work of art”. An actual artwork by acclaimed artist Nakatani Michiko can be found along the wall of under-renovation Toranomon. A masterpiece by Okamoto Taro graces the passageway between the Keio Inokashira Line and the main building of Shibuya station.
Heated seats and privacy
In 1993, I regularly transferred at Tokyo station onto the Tozai line subway. Slightly past the subway entrance was a toilet with highly unsettling sight-lines to a couple of squat toilet cubicles. Privacy and hygiene were far from assured. It, and other such facilities, have made way for toilets that are superior to what exists in the average middle class home.
The new Yamanote line station of Takanawa Gateway is worth a visit for the gentlemen’s toilet alone. It contains a pair of actual trees.
I was shocked when visiting London to discover that most subways stations have no toilets at all. “It is accepted that people just go into the pub” a friend informed me, “although that can be a hit or miss proposition”. “There are many within London”, he continued, “who are thankful that the museums are free for reasons other than their educational worth.”
Dramatic advances in infrastructural development have been carried through to the housing sector as well. During the past thirty years, average floor space per person has expanded from 25 to 33 square meters, walls have thickened, mod-cons abound.
Silence on the alliances
The area in which Wingfield-Hayes’s article is most deficient concerns alliances and security, arguably the most significant development concerning the Japan of the most recent half dozen years. At the height of Japan’s economic might, the Gulf War broke out. Japan found itself a spectator, an irrelevance, a bystander confined to a humiliating policy of check book diplomacy.
During the eight year tenure of Abe Shinzo (2012-2020), Japan travelled a long way towards full participation on the world stage. The U.S. remains the principle nation within Japan’s diplomatic and security arrangements but a multitude of bi-lateral and regional alliances, including the Indo-Pacific directed Quad (India, Australia, Japan and the US), have been entered into.
Japan and NATO have deepened their partnership. No ambiguity exists on the Japanese position of support towards Ukraine.
The role of Japan has been central in the renewal of British and French naval visits into Indo-Pacific waters and ports.
On these and related security issues, Wingfield-Hayes utters not one word.
The head and the heart
“Will Japan gradually fade into irrelevance, or re-invent itself?” asks Wingfield-Hayes. “My head tells me that to prosper anew Japan must embrace change. But my heart aches at the thought of it losing the things that make it so special.”
The scent of colonial administrator to noble savage put to one side, Wingfield-Hayes is not alone in that regard. There is much about Japan that will likely remain stuck in the past, that refuses to conform to global standards, that we all would dearly love to retain. The long list includes manners, good service, infrequent vandalism, minimal random violence, honest taxi drivers, lost wallets returned with contents intact and a “relative” lack of recreational drug taking.
As for the economic health of Japan, the fundamentals may well appear problematic and have for some time, but Western economists and commentators have been predicting the economic fall of Japan for the past thirty years. Not only has Japan refused to oblige but every time there is a global economic crisis, the value of the yen goes through the roof. Is there reason to believe that anything will change in the coming decade? Wingfield-Hayes has proffered none.
Two way exchange
In an impressive (and highly recommended) rebuttal of the article on Substack, Naoh Smith deals with many of Wingfield-Hayes’s chestnut claims, (immigration policy, women in the workforce, etc.), while scolding Wingfield-Hayes for both failing to notice the changes that had gone on around him and for contributing to the “cliched cultural essentialism that still defines Japan in the minds” of too many in the West. “I suppose thinking of Japan in terms of the bubble and crash of the 80s is less ridiculous than...of samurai traditions and The Chrysanthemum and The Sword” he adds. “But still. Come on.”
Smith then expresses fear that if we think of Japan “as a country and culture in amber”, we “won't have much to offer it in the here and now.” But Smith has only identified half of the problem. Much could have been learnt from the Japanese crash of the early 1990s if the West had viewed it as a replicable real estate bubble. Much will be learnt from the Japan’s present demographic dilemmas if all can accept that they cannot avoid the fate of depopulating Japan. Much could even be learnt on how the West might upgrade its levels of safety and good manners. The key is in viewing Japan as simply another country with its own strengths and weaknesses; in believing that the transfer of inspiration and ideas should naturally move both ways.
Ah yes that Freudian screed by Ruthie Benedict, a person who never set foot in Japan and never bothered to learn the language. Very credible.
"The scent of colonial administrator to noble savage put to one side"
Mr. de Vries has m'lord drawn perfectly.