Japan: Over the hill?
Share Now on:
Japan: Over the hill?
Kai Ryssdal: The prime minister of Japan spent a couple of hours with President Obama at the White House today. Oval Office, joint press conference, the whole smash. So, trivia question: Can you name the prime minister of Japan? Yeah, that’s kind of the point. Yoshihiko Noda is the sixth incumbent in that office in the past five years and the latest to try to get the economy once known as Japan, Inc. back on track.
Marketplace’s Scott Tong was in Japan not too long ago asking around to find out how bad is it really?
Scott Tong: You’ve may have heard here, and elsewhere, that Japan is cooked.
Isenburg: Japanese economy has not been growing for the last 20 years.
Its leaders are out of touch.
Kingston: The more they speak, the longer their nose becomes.
Birth rates are down. Its men are wimps.
Nori: Their preference is not to be manly men.
One interviewee compared Japan to Portugal — from the club for over-the-hill empires. But here’s the thing: when you go to Japan, it doesn’t feel like some boarded-up shack of an economy.
Restaurants give tip-top service, even though there’s no tipping. Kids commute to school themselves, it’s so safe. The only jaywalkers seem to be the foreigners.
On a modest Tokyo shopping street, many elderly say for all the talk of lost decade, the quality of life in Japan is good. Seventy-two-year-old Takahiro Saito offers up some bread and some memories.
Takahiro Saito: We had many blackouts during the war. Not any more. Now, we have utilities, a good sewer system. Nice toilets.
Ah, the Japanese toilet. Think heated seats, multiple spray nozzles, blow drying and deodorizing functions. How can an economy supposedly this bad be this good?
Eamonn Fingleton: Westerners have always disbelieved the Japanese growth story.
Tokyo author and journalist Eamonn Fingleton argues the Japanese decline is a myth propagated by Americans who don’t like the Japanese system. They think brother picks corporate winners. It messes with the free market.
Fingleton: So they look at Japan and see a very regulated economy. And say this economy is very inefficient. They’re actually wrong.
His evidence: The typical Japanese person — we’ll call him Ichiro the Plumber — makes $42,000, pretty close to Joe the Plumber and he lives five years longer. Japan’s currency is strong. And its companies still crank out top equipment, like lenses to make computer chips.
Fingleton: There are only two countries that can make lenses to this level of precision, Japan and Germany. Know-how is very, very important at the top end of manufacturing. And the Japanese have it in spades.
By the measure of GDP per person, Japan’s prosperity has not gone down. Yet. Richard Koo is an economist at Nomura Bank.
Richard Koo: As long as GDP per capita is growing, I think people should be happy.
As long as it’s growing is the key. Like lots of rich countries, Japan creeps along, racks up debt, and gets older. Can it keep up?
Koo: At the end of the day you just have to run faster.
Koo says just as Japan caught up to the U.S. back in the day, now the chaser is now the chased — with Korea and China on its tail.
Koo: You have to be able to come up with new products, new designs, new fashion. You need someone who thinks differently from the others.
Innovation. If that’s how you sustain an advanced economy, Japan may have some work to do — that’s according to Masaru Tamamoto of Cambridge University and the World Policy Institute.
Masaru Tamamoto: Really simply put, everything in Japan is borrowed and refined and made Japanese. But the origin is always an outside origin.
Resident optimist Eamonn Fingleton thinks Japan is up to the task. Historically, he says it’s transitioned from textiles to technology to Toyota. And it can handle whatever’s next — maybe it’s be clean energy. Maybe it’s robots to care for the elderly. Fingleton does concede this: that the future lead dog in Asia will be China. And yet, as he sees it, Japanese don’t hyperventilate about that.
Fingleton: They see a world that will look rather like it did 500 years ago — led by China. They’re used to Chinese culture. They’ve copied a lot of it. There is a level of comfort with China that people in the West don’t quite appreciate.
He thinks Japan’s relationship to China is like England’s to America. Overtaken, but still rich, comfortable, relevant. It’s a provocative notion, highly debatable. But a question a lot of countries are asking: Can a mature economy age gracefully?
In Tokyo, I’m Scott Tong for Marketplace.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.