By the time the last car and calculator, machine tool and videotape recorder are totted up, Japan’s trade surplus with the United States for 1984 is going to be close to $36 billion, nearly double that of 1983 and the biggest ever recorded, anywhere. Americans are voting with their credit cards for Japanese products, mostly invented in America, all items Americans used to make for themselves. The sections of American industry that are feeling hard pressed, i.e., most of them, charge that the Japanese success is owed to dumping, cheating, lying, sweated labor, and other unsavory and un-American practices. The Japanese say that they have been maligned and misunderstood.

Where does the truth lie, in this complex case? The Japanese are, at least, a change from the Soviet menace, although one of the books considered here (The Japanese Conspiracy: The Plot to Dominate Industry Worldwide—and How to Deal with It, by Marvin J. Wolf) warns that the two threats are in fact linked, since Japanese duplicity is said to be undermining the high-technology industries vital to American, and thus “free world,” defense. A flood of books explaining, denouncing, and (less commonly) defending the Japanese have appeared in the US, while the Japanese have given up producing books about America, and seem to be concentrating their curiosity on more specific questions, the internal layout, for instance, of the next generation of IBM computers.

It was not always so. Largely by chance it was an American, Commodore Matthew C. Perry, who introduced the Japanese to the Western style of gunboat salesmanship in 1853, with a none-too-veiled threat to bombard the shoguns’ capital unless they opened their ports to trade. Thus it was to America that seven years later, on the eve of the Civil War, Shogun Tokugawa lemochi sent Japan’s first overseas mission in more than 250 years, with greetings for “His Majesty the President of the United States.” Ostensibly the delegation of seventy-seven middle-ranking samurai came to present a draft treaty, but, as the pioneer consul and currency speculator Townsend Harris noted, they were actually more interested in “observing the prosperity of cities, the wealth of citizens, the conditions of the Army and Navy, and the strength and greatness of the United States.”

Thus even in the days before IBM the Japanese looked to the US for practical information, rather than ethical guidance. Perry’s cannon had persuaded the shogun’s advisers that only Western weapons would keep out Western predators. While they could see that Manifest Destiny was rolling their way, in 1860 Hawaii was still an independent monarchy and America looked a marginally safer bet than the ravenous empires of Russia and Great Britain, already picking China’s carcass. The slogan of those years, “Western Technology, Japanese Spirit,” might well be inscribed on Japanese T-shirts, if they wore such things, to this day.

The fact-finding samurai all kept diaries, published and avidly read when they got home. They were looking for the essential secrets of American power and prosperity, winnowed, of course, from the comical and repulsive aspects of American life which no self-respecting Japanese would want to take up. The problem, as ever, was to separate them. The samurai did their best, and their findings make instructive reading, providing historical and conceptual background that we will find useful in judging the present torrent of facts, near-facts, and nonfacts moving in opposite directions.1

The samurai did some reading before they left, of course, learning that America had been discovered by a Spanish warrior named “Korunbus,” employed (a thing still unthinkable in Japan) by a woman, a certain “Queen Isaberla.” Nothing in their guidebooks, however, prepared them for the nauseating American food, and there were many cases of Washington’s Revenge before they discovered that ice cream and champagne were safe—“but when a bottle was opened,” noted one, “it exploded with a frightening noise.” (Their own supplies of wholesome pickled vegetables, dried octopus, and salted fish had been pitched overboard by American sailors on account of the “stench.”)

Like tourists everywhere, they found the bath and toilet arrangements of their hotels bizarre, but functional enough when they got used to them. The purpose of chamber pots baffled them until they worked out that they must be pillows, the American version of the wooden blocks on which samurai slept at home to avoid mussing their topknots. This example of American good sense contrasted, however, with the observed fact that Americans were practically teetotal: “Heavy drinking and intoxication are forbidden in America,” noted Fukushima Yoshikoto, “but on the days after Sundays such indulgence is permitted.” This unmanly abstinence was caused by the interference of American women, who were bossy: “the way women are treated here is like the way parents are respected in our country”; immodest: “obscenity is inherent in the customs of this country”; and nothing much to look at, either: “I find their reddish hair unattractive, and their eyes look like those of dogs.” “Unmarried women are called ‘Joan,’ ” noted the same observer, “while married ladies are distinguished by the suffix ‘sons,’ such as ‘Joansons.’ ”


In Washington the samurai visited the patent office, which still attracts a lot of Japanese interest, and noticed that the “boarding houses where widows and spinsters reside, as in certain kinds of nunneries, are actually brothels frequented by men-about-town.” It was, however, the absurdity of the American form of government that left little hope for the Republic: “They hold an auction to see who will be president, or Shogun of America,” Yanagawa Masakiyo informed his readers. “Virtuous men are auctioned from the entire population, excluding the blacks, and in private life they are no different from common people. The new president enters the White House from the front gate as the old president withdraws from the rear. The United States is one of the greatest countries in the world but the president is only a governor, voted in every four years. I don’t believe that the fundamental laws of this country will last much longer.”

Some of the samurai liked the openness of the Congress which, they thought, eliminated the perennial Japanese problem of bribery: “At the Captain House…the officials are clearly seen and scrutinized by the people, and no one suspects those in office of mixing public and private interests.” The behavior of congressmen was, however, deplorable: “They curse and swear when discussing important affairs of state…and gesticulate wildly, like madmen. The whole scene is like our fish market at Nihonbashi.”

The generous approach, wrote Fukushima Yoshikoto, was to look for the Americans’ good points. “Of all the 77 people in this Embassy, most were full of hatred and anger towards the Americans, but as we have come to know these people better, we are now regretting our previous error…. What we should do is to understand them precisely, and without being seduced by their merits, treat them with love and justice. Then they, too, will respect us, and abandon their intention of plunder.”

Spoken for the fair-minded everywhere. We might derive other useful yardsticks from the writings of these pioneer samurai, too. Sometimes they are just plain wrong, but quite often their observation of the externals of American life is sharp. What they miss are the underlying principles that Americans believed they were following; not surprising, since the only values the Japanese knew were the ones that had shaped them, and Tokugawa Japan, poor, proud, and afraid, was about as different as a human society can be from plebeian, acquisitive, overconfident America. Although the adjectives might now need a little reshuffling, it still is. We might also notice that fear and fascination, universal reactions on encountering a powerful alien civilization, jostle in their reports. To judge by the recent books on mysterious, menacing, ever-interesting Japan, they still do.

Ian Buruma is a young British-Dutch scholar and journalist who went to film school in Tokyo and spent years touring Japan with a theater troupe run by Kara Juro, the actor and novelist. (Kara has since won Japan’s top literary prize for a fictionalized account of the lovesick Japanese who shot and ate his Dutch girlfriend in Paris.) Buruma is thus unusually well informed about the mizu shobei, as Japanese call the side of Japan in which crime, show-biz, prostitution in all its forms, and high-stakes gambling rub together (we have the same mixture but we lack the useful Japanese expression, which translates as “water business”).

With these excellent credentials Buruma addresses himself to a paradox that has puzzled many visitors to Japan: what is the connection, if any, between the syrupy sweetness of Japanese daily life, the absence of violent crime, at least on the streets, the lace curtains and plastic flowers in automobiles, the down-trodden clerkly demeanor of men and the affected simpering of young women, and the savage brutality to be seen in Japanese films, in the universally read comic books, the torture and bondage sequences shown on prime-time TV? And are these things perhaps related to the well-attested cruelty of Japan’s wars of conquest? Or even to the trade problem?

The paradox, Buruma argues, can be traced to Japan’s centuries of seclusion, the time when the shoguns clamped on the country the world’s first, and still in retrospect most effective, police state, treating unsupervised thought, skeptical observation, or even general curiosity about the world as deadly threats to their rule. But the Japanese like the rest of us have to do something with the untamed part of the human personality, and “encouraging people to act out their violent impulses in fantasy, while suppressing them in real life, is an effective way of preserving public order.” Hence the Japanese fascination with the doings of bad guys. They are not seen in Japan as misunderstood or the product of broken homes, but as monsters who reject all social rules and obligations, “super-individualists in a society that suppresses individualism.”


But much as the Japanese love to hate them, these anti-heroes seldom step down from the screen, and Japanese cities are notoriously “safe.” As Buruma says, “If the Japanese are indeed a gentle, tender, soft and meek people with hardcore fantasies of death and bondage, few of these dreams appear to spill over into real life. The atmosphere in the streets with the disciplined crowds, the piped music, the plastic flowers, the tinkling bells, the pretty colors, is mawkish rather than menacing.”

This is the flavor of the kindergarten, one controlled not by Teacher but by the well-trained kids themselves. Buruma describes how it works:

The desires of the individual are subordinated to the demands of his or her group. The concept of individual rights is not readily understood in Japan. Wa (“harmony”), as a recent prime minister liked to point out, is the key to the Japanese Way.

A strict sense of hierarchy effectively prevents individuals from asserting themselves and therefore unbalancing the harmony of the group. Violent confrontation between individuals is not restrained so much by a universal sense of morality (what the British like to call decency) as by a system of etiquette more rigid than anything seen in the contemporary Western world. But this system is based almost entirely on known human relationships; without a group to relate to, it tends to break down rather quickly.

Buruma is absolutely right to extend his observations of the Japanese “water world” to Japanese society in general; Japanese gangsters simply follow in hammy dramatic form the basic patterns of all Japanese life, which is why the mousy masses are so fascinated by them.

As the basic social unit the Japanese have neither the individual nor the family, but the village-like group who work together and, as the Japanese say, “share a common destiny.” This can be anything from a criminal gang to the accounts payable department of a Tokyo trading firm; in all cases the commitment will be two-way, member to group and group to member. It will run according to vague rules constantly reinterpreted to suit the personal relationships involved and, because these are glacially slow to develop, will in principle be lifelong. For the same reason, the members will all be Japanese, all products of the same system and so equipped with the same social instincts. Such a primary group will also be small, a few dozen people at most.

But loyalty of this emotional intensity to the group implies either indifference, if not downright hostility, toward all outside it. This would make Japan a nation of mutually aggressive villages (which, long ago, it was) were it not for the development of wa (credited to Prince Shotoku in the seventh century), which is not the Western notion that little birds in their nests should agree, but a much more complex and specifically Japanese form of social détente which enables groups to cooperate while acknowledging, at least tacitly, that their interests are not identical, and in fact often conflict. Such conflicts are, in turn, either resolved or put aside in the wider interest of working together, or wa. Without fixed rules, ideology, or permanent institutions, wa in favorable circumstances produces a society that is both tenaciously united and marvelously flexible, with important economic consequences.

Judiciously applied, wa has enabled some very large Japanese organizations to be built up, both inside and outside Japanese notions of respectability. Japan has, for instance, very big criminal conglomerates within its community of 125,000 gangsters, one of them, the Yamaguchi-gumi with 45,000 full-time members and affiliates, believed to be the biggest in the world. But after the death of Boss Taoka, the gang’s chief, in 1981, his widow manipulated a younger favorite into the top job out of the acknowledged line of seniority, leading a third of the membership to break away and form a new group.

But the breakaways have been drifting back to the original gang. Early this year, three of the dissidents, still defiant, ambushed and killed the usurping boss and two guards. The funeral was carried on Japanese national TV, and so were the preparations of the enraged survivors on both sides, including the purchase of smuggled handguns and imported bulletproof vests, for a war of each against each. This is the sort of thing that happens when wa breaks down.

Why doesn’t the Japanese government do something? Because, as most Japanese will tell you, “gangsters are entitled to live, too, as long as they keep their proper place.” The Japanese government does not stand apart from or over the community; it is rather the place where wa deals are negotiated. Representing a consensus nationally agreed or nearly so, the government is omnipotent, but as an originator of policy, especially one that upsets existing, lengthily negotiated wa, the Japanese government is feebleness itself.

Buruma modestly does not offer his study of Japanese life at the margin as a contribution to solving the mysteries of Japanese productivity, or to the trade debate. This was probably a commercial mistake. (The Book of Five Rings, a 1643 treatise on swordsmanship, is reportedly being studied at Harvard Business School as a possible key to Japanese management practice.) Japanese popular culture has attracted little attention outside Japan while Japanese business has become a regular cover story and the subject of best sellers. Of the books under review, however, his gets closest to the heart of Japanese life and thus to the fundamentals of the Japanese mode of production. Only a thoughtful foreign observer deeply versed in Japanese attitudes, a kind of living Rosetta Stone, could have produced it. Such people are rare, and should be encouraged.


If Buruma’s book seems remote from the trade conflict, Satoshi Kamata’s Japan in the Passing Lane: An Insider’s Account of Life in a Japanese Auto Factory would appear to be going directly to its core. Kamata wants to show how tight social control is accepted unquestioningly in Japanese industry. His publisher describes his book as “a stunning description of how the ‘miracle’ of the Japanese auto industry was, in part, accomplished most unmiraculously at the expense of those actually producing the cars.”

In his jacket photograph, Kamata wears the heavy horn-rimmed glasses and shoulder-length hair of the Japanese bungakujin, or man of culture. In 1972, the last year of Japan’s pre–oil shock explosive industrial growth and consequent labor shortage, he managed to land a job on the assembly line at Toyota, a notebook tucked into his overalls. His project was, as he explains himself, one of ambitious cultural analysis:

I wanted to show the inhumanity of it all—not only the inhumanity, but also the unquestioning adherence to such a system. Is the prosperity of a modern industrial society worth such a cost, such a cruel compulsion of robot-like work? If the production of cars—mere machines—necessitates such a sacrifice of human freedom, just what does this say about the paradox of modern civilization?

This is also the theme of Chaplin’s Modern Times, a film Kamata admires. The introduction of Western industrialism into Asia, where it was alien as well as disruptive of the traditional societies, elsewhere produced violent reactions: nationalism in India, communism in China. In Japan, where the government itself took the lead in industrialization, one reaction was a literary protest against the tastelessness of it all. Although Kamata thinks of himself as a leftist, he is appalled by what he sees as the vulgarity and conformity of the Japanese workers. He explains that he feels out of place at Toyota because of his “superior intelligence.”

Under the title Automobile Factory of Despair, Kamata’s book came out in Japanese in 1973, that being a year when his countrymen were much more worried about unemployment than about “alienation.” A decade later a shrewd American publisher saw the book as a contribution to the trans-Pacific trade debate and brought it out, with a flashy new title, as a 1983 model, and it appears now in paperback. The title alone is a giveaway: Japanese freeways don’t have passing lanes, but the same alienation is now rife, the author has heard, in car plants all over the world. The Japanese workers seem, in fact, happier than most.

The book is nonetheless interesting. As a piece of investigative journalism, it is comically inept: Kamata writes frequently about “our rage” and his own feelings of despair, but the other Toyota workers advise him to cheer up and buy a stereo tape recorder, and he never gets close enough to them to explore why they see things differently. When they explain that the boss is “a good guy” who buys them ice cream, he reflects sourly that “if the boss is a good guy, workers find it hard to get angry or show their discontent.” At length he studies the toilet walls for signs of alienation, and finds written there, “I’m only in it for the money.” He notes, “On first thought that seems like common sense. But it started me thinking. Could it be a kind of protest against hard, monotonous work without any future?”

At last Kamata’s rage boils over, not against the Toyota bosses, but against the other workers. “Why does anyone work at this goddam job without complaining?” he fumes. “Incredibly, thirty minutes before the second shift, everybody is always ready…they’re so docile and undoubting I could cry.”

In his introduction, an unusual one which warns the reader not to take the book too seriously, the British scholar Ronald Dore sensibly argues that Japanese factories run on a spirit of camaraderie which includes the foremen and top bosses; the pay structure is far more egalitarian than it is in British or American car plants; layoffs are all but unknown; and the Toyota plant is the most efficient in the world. The management therefore must be doing something right.

Yet Chaplin and Kamata clearly have a point, too: human beings are, or should be, made for better things than dancing obedient attendance on assembly lines. It is true that hoeing rice in the rain, which is what most of Kamata’s colleagues were doing before they came to Toyota, is also a boring job, but at least it is seasonal and open-air. But the Toyota workers, as Kamata discovered to his horror, don’t mind working there, or accepting the “just in time” principle that brings components to the assembly line at exactly the right second and turns the factory into a huge machine and the workers into disciplined components of it. The famous Japanese quality control, he finds, is a form of group reward and group punishment (through the giving and withholding of bonuses, commendations, and so on) which compels, or at any rate enables, the Toyota workers to turn out work with “zero defects.” As nonindividualists, they gladly accept it.

The day is fast approaching when Toyota’s workers will all be robots, clanking away in empty factories. By Kamata’s account, with live Japanese workers we are practically there already; but the discipline that makes it possible for human beings to perform like machines comes from Japanese tradition and history, and has long since been internalized. As a free spirit, Kamata is appalled; American managers reading his account might also feel some of the despair of Indian hand-loom weavers who found they were competing with the steam engines and spinning jennies of early industrial Britain. In condemning mass production in general, Kamata might thus be said to be especially critical of Japanese industrial methods precisely because they are better at it than anyone else. Just the same, I know whom I would rather buy a used (or new) car from.

Jared Taylor grew up in Japan where his parents were missionaries. He played Japanese games with the neighbors’ children and attended the local elementary school. Few foreigners have had this experience, and Taylor is unusually well qualified to describe the most important of all Japanese industries, the educational system that turns out Japanese. But he barely touches on the subject in Shadows of the Rising Sun, which might perhaps have been better titled All You Ever Wanted to Know About Japan But Could Never Find Anyone to Ask, a useful survey for people who know nothing about the country but not so helpful when he tries to analyze it.

The trouble comes in part from Taylor’s closeness to his subject: he is inclined, for instance, to accept Japanese self-assessment at face value, without asking the next question. “If there is one secret to Japan’s success,” he writes approvingly, “it is hard work.” This aspect of Japan certainly speaks to the Presbyterian in us all, and is inclined to add a touch of guilt to condemnations of Japanese trade surpluses, but it does not explain much: why do the Japanese work so hard, and why do their efforts seem so well directed? Could the girls in Tokyo department stores whose job consists entirely of bowing to the customers be described as working either hard or purposefully?

Taylor quotes the standard Japanese explanation: the Japanese “prefer the warmth of human relations to the cold elegance of abstract systems.” This seems hard to reconcile with the Japanese obsession with rank and title, the constant, calculated bowing and gift exchanging, the complexities of Japanese “respect language” with its two and three layers of subservience and self-abasement toward the boss, the boss’s relations, and authority in general, identified by the “shoulder writing” on constantly proffered visiting cards. This is “human warmth”?

Taylor contrasts the disappointment of Japanese clients who find American prostitutes cold and unfeeling “because they don’t hide the fact that it’s strictly business” with the irritation of Americans at the “insincere” protestations of affection showered on their customers by Japanese bathhouse girls (prostitution is illegal in Japan).

This problem, which is the false, which the true, has troubled observers ever since the two societies were first compared. Tamamushi Yasushige, one of the visiting samurai of 1860, asked his Japanese readers whether

we should prefer a society with no ceremonial rules but with intimate personal relations [by which he meant America] to a society with strict ceremonial rules but no personal relations [his own]? I am not necessarily setting a high value on the barbarians’ customs, but in view of the recent developments, the answer should be obvious.

The question has deep economic consequences, which I can illustrate from my own experience. In the village outside Tokyo in which I live there are four gas stations, offering gasoline at four different prices. The one I patronize charges three yen a liter more than the one that happens to be closest to my house. Why don’t I switch? Because the proprietor is a friend of mine, but even if he wasn’t (and how could he not be, since we have done business together for years?) he would still be entitled by social convention to a cash payment in compensation for the loss of my business from my new supplier; and this payment, which would have to be long and carefully negotiated between the two men, would be wholly outside my control. While theoretically I am free to switch, village opinion is on the side of my staying where I am.

But, conversely, if the writing trade went really bad, my gasoline supplier would be expected to extend credit, without question, for…six months, perhaps, or a year, depending on his financial situation, which would of course be made known to me by neighborly go-betweens.

This illuminates the paradox of the prostitutes, as we might call it. An American feels uneasy with a lady who swears undying love for, say, twenty dollars. Business is business, and there is security and dignity in the idea of value given for a fair price, and no shame in seeking the best deal. Prostitute and client are thus expressing, if not affection, a kind of independence and human solidarity. To a Japanese, however, business is so important that it can only be done with friends, and friends care more about one another’s feelings than about a few lousy yen, or the superiority or otherwise of the goods or services offered.

The Japanese exporter to the United States thus needs only to offer a better or cheaper product, and he’s honorably in. But the would-be exporter to Japan finds the marketplace already seized up solid with a dense network of “friendships,” of layer upon layer of middlemen who have been doing business together for years, and who are, of course, all Japanese. This is not to say that business relationships disguised as friendship don’t exist in the West—we all know that treacherous smile at the water cooler—but in principle, at least, we keep them separate. Conversely, simple uncalculating friendship based on plain affinity and nothing else has no place in the formal Japanese scheme of things, although I really believe I have a (Western-style) friend in my garagiste.

Which of these societies is “cold and calculating,” which “warm and human”? The problem is plainly beyond arbitration or resolution, but economically the two behave quite differently: one is a machine for sucking in imports, the other a “closed market” dedicated to preserving the existing social order, or web of friendships, against the corrosion of the marketplace.


These considerations bring Taylor to a discussion of the Nihonjin-ron, the “Japanese problem” (as seen by Japanese). It is, in fact, a measure of Taylor’s closeness to a Japanese outlook that he is prepared to step on these treacherous sands, knowing how deep they are. The question comes down to the Japanese claim to be unique, or, given that everyone is unique, one way or another, to be uniquely unique. Is this claim true and, true or not, what does it mean?

No other sizeable human community, to be sure, has had Japan’s history of centuries of isolation, or can show such a uniformity of thought and feeling, developed in the many years no foreign foot stepped on Japanese ground. Japanese thinkers have added more features which, they say, make the Japanese a people apart: Japanese brains are supposed to work differently, the language is claimed to be uniquely expressive, or uniquely inexpressive; the climate is either unusually good, or bad, singularly well endowed with scenery, or unendowed with industrial raw materials. But why should Japanese uniqueness be such an important issue, why do the Japanese feel the need to go on and on about it?

It is not exactly racism, of our good old Western variety, but then again it is not too far away from it, either. The Japanese system of fluid ethics based on village, or village-like, consensus clearly needs a community of like-minded people to make it work, and this can only be achieved, both in Japanese eyes and in truth, by undergoing a full course of education, in Japanese, among Japanese people. Apart from actually being Japanese this is an all but impossible attainment.

My own children, as it happens, have never attended anything but Japanese schools but, their mother being English, the question of their actually becoming Japanese has never come up. However, no one who is not a Japanese citizen (which in practice means being Japanese by race) is allowed to teach in a Japanese school. A young Korean teacher, for instance, who was born in Japan and speaks only Japanese, and who had attended a Japanese teacher’s training college, was refused a position at a Japanese primary school in Nagano earlier this year, on the order of the Nagano prefectural authority (the school had already offered her the job). She could, it is true, seek Japanese citizenship—but only at the cost of Japanizing her name, and thus formally renouncing any non-Japanese connection. Vietnamese and Cambodian refugees are, similarly, only grudgingly made welcome in Japan, or not at all, and the first party of fewer than a hundred of them was described as “the sword of an alien culture pointed at Japan.”

Why so touchy? The kindest way to put it is that this is cultural racism and not racial racism, if that makes it any better. Its economic consequences are deep: Japanese consumers, for instance, know quite well that they are paying two or three times the world price for rice, but they do so willingly enough because rice farmers are thought to be central to the Japanese family, and in fact very few Japanese are more than a generation or two away from the rice fields. Conversely the Japanese coal-mining industry was all but liquidated in the 1950s, when Japan was most dependent on energy-intensive industries and so could not afford to support inefficient coal mining, even by Japanese. The issue was in fact the same in both cases: the survival and prosperity of Japan as a whole comes before the interest of any subgroup (or as the National Socialists used to say, “Gemeinnutz geht vor Eigennutz“).

Japanese uniqueness is thus much more than a simple fact of anthropology, history, or linguistics. It is an assertion that Japan works on principles different from those that govern all other countries (which is true) and ought to be able to do so to preserve the integrity of the Japanese community, which is in turn both the cause and result of its uniqueness. This is very close to a claim of Japanese superiority, of course, and it was so used during the years of Japan’s military adventures. Even now, it is a rationale for resisting the application of universal rules, like “free trade,” Western style, which would have the effect of entering Japan in a contest of the nations which, the rules not being Japanese, Japan would not win.

Historically, the doctrine did not originate in Japan but came, like much else, from China. The thirteenth-century Mongol invasion of China destroyed forever Japanese awe of the Middle Kingdom and willing acceptance of Chinese cultural and political hegemony. But, if China was no longer the Middle Kingdom, then Japan must be, there being no other civilized nations known to either. Even after seeing Perry’s firepower, the samurai of the 1860 deputation had no doubt of the basic superiority of Japanese institutions over American, and one of them, Muragaki Norimasa, concluded his report of their reception at the White House with a self-satisfied little poem:

Emishira mo aogitezo higashi naru Waga Hinomoto no kuni no hikari o.

(We suffered the barbarians to look upon This glory of our Eastern Empire of Japan.)

Absurd as this may be, there is, of course, a matching claim of American uniqueness, which lies unspoken, close to the heart of the trade dispute. Ever since the Norman conquest of England, the English-speaking countries have set great store on the notions of immutable right, law, and justice which emerged at that time, and, indeed, enabled Norman and Saxon to fuse into one people. Nowhere are law and lawyers more central than in the United States, where they have enabled the original Anglo-Saxon core group to expand into a multiracial and to some extent multicultural society which, at least in theory, anyone can join, Japanese included, by giving their assent to certain basic political principles and paying forty-one dollars to the Immigration and Naturalization Service.

From this it is a short step to the anima naturalita gringa, the idea implied in much angry American comment on Japan, that the whole human race is actually made up of Americans, or at least potential Americans, who need only liberation or enlightenment to behave like Americans, spending their money on whatever they like, whenever and wherever they like. Free trade is thus the unfettered expression of the human spirit, just as access to consumer goods is the pursuit of happiness promised in the Declaration of Independence. A market that is not absorbing enough American products when it has the money to buy them cannot, therefore, be open, free, democratic, happy, or any of the other good (American) things.

Americans did not, we know, always think this way; during most of the nineteenth century, free trade was denounced as a British plot to dominate the world, and Japanese cities were leveled by American bombers built in factories that grew up behind the high tariff walls of the 1930s. Only after 1945, when American industry and agriculture clearly led the world, did Americans become fullblooded free traders. Underneath the trade dispute, therefore, is the question of relative positions in the world. Played by American, or free-trade rules, may the best man win, of course, but this is going to be America, whose agriculture is overwhelmingly superior to Japan’s and whose manufacturing industries, or so it is hoped, will soon get on top again when the Japanese market is flung open.

But the Japanese decline to compete according to these rules and, indeed, cannot, without allowing the basic unity of their society to curmble. The protection of inefficient farmers, the apportioning of production to preserve full, or nearfull, employment, the voluntary acceptance of “administrative guidance” to phase in new industries and phase out dying ones all run against the grain of the market; but these are all part of the Japanese social compact or wa, painfully hammered out in decades of boozy evenings in bars and geisha houses. The Japanese system of tribal bureaucratic capitalism has proved a marvelously flexible instrument in times of economic turmoil, which clearly continue: the Japanese are as little likely to abandon their system now as Americans are to take it up.

Here we have the theme of Trade War: Greed, Power, and Industrial Policy on Opposite Sides of the Pacific, the most ambitious of the books under review, even though it is written in an irritating baby talk, which may be no more than an earnest attempt to get the author’s message to a wider audience. Schlossstein advocates an American industrial policy which is, he says, “just another name for economic nationalism,” or, to be brutally honest, a call to sacrifice at least some individual American interests for the national good.

And why not? Japan has undoubtedly had an industrial policy since the samurai visited Washington in 1860, or if we consider the economic implications of the shoguns’ closing up of Japan to outside trade, for the past three-and-a-half centuries. Schlossstein sees the contest between the world’s two leading industrial powers not as friendly rivalry, but as trade war. “We have already been fighting one,” he says, “only the Japanese realize it, and we don’t.” If industrial policy is Japan’s plan of campaign, then America needs one too.

There are difficulties, of course, which Schlossstein locates in the different style and outlook of Japanese and American companies reflecting underlying differences in the two societies. All of the books reviewed here reinforce my own observation that Japan is not an aggregation of individuals living it up, in the American way, whenever they have the cash or credit to do so, but a web of groups and organizations competing and sometimes colluding in complex, ever-changing ways governed by shared instincts and a common way of looking at things. Japanese companies, says Schlossstein, are therefore not primarily interested in maximizing their profits (PM) but in maximizing their share of the market (MMS), even when this means making less profit.

The motives of a profit maximizer are plain enough: he can spend them or, if the competition is getting too hot, even invest them in new plant and equipment. But why would anyone, even the unfathomable Japanese, want to make his main effort in the direction of increasing market share, which just sounds like more work for less pay?

Schlossstein quotes the seventeenth-century Zen master Suzuki Shozan, who advised his disciples to “renounce desires and pursue profits, but never enjoy profits. On the contrary, you should use your profits for the good of others.” Although this comes ultimately from Buddhist notions about the emptiness of all earthly desires, it is advice that Andrew Carnegie, Henry Ford, or many another wellheeled American might easily have given. These two, however, had to get the funds into their private bank accounts first, before they could ostentatiously do good with part of them. But people who get their emotional satisfactions out of not their own but their group’s successes want their group to be not richer but bigger and more powerful, a matter of rank order. The aim of most big Japanese companies is therefore to be, like Toyota, Number One in Japan, or, like Seiko Watches, Sekai ichi, Number One in the World.

We can plainly see where this is heading. Toyota men compete with other Toyota men, not to curry favor with the boss or to take home fatter pay envelopes, but to see who can be the best Toyota man, so that Toyota too will become Number One in the World. Then they will feel that they, as Toyota men, are getting somewhere in this brief and impermanent pre-Nirvana existence. They will not, of course, accept layoffs, which would mean banishment from the group, but they are, as Kamata discovered, ready to show up for work early, to be flexible about job designation, job relocation, pay, and bonuses, and all for the good of Toyota, which means their own good. There is, as it happens, a Toyoda family that started the business, but in general stockholders and their interests rank low in a Japanese company’s order of priorities, and even the Toyoda clan are anxious to be seen as good Toyota men, never photographed far away from their desks. There are no known jetsetters, idle rich, or stately homes in Japan.

What happens when everyone in Japan wants to be Number One in the World? The Japanese, if they ever had notions of world conquest, gave them up in 1945, for good. But Japanese firms now have 18 percent of the American car market, and would have more but for “voluntary” restraints, imposed on them by Americans, which will probably be lifted later this year. They have virtually all the videotape recorder market, most of the television-set market, and large slices of the markets for steel, machine tools, microchips, office equipment, and you name it. Market share, in short, is Japan’s manifest destiny, rolling ever eastward toward the beckoning Atlantic and beyond (the Europeans also have huge and growing trade deficits with Japan).

Only in agriculture and armaments, it appears, does the United States keep its comfortable lead, but the Japanese as we have seen want to preserve the stability of their own society by protecting inefficient, Blut und Boden Japanese rice farmers, while they have lost all interest in war and, if they have to buy weapons, prefer to shop at home for the same völkish reasons. Schlossstein therefore wants to see an American industrial policy that will select and foster expanding American industries, humanely kill off the lame ducks, and meet the Japanese challenge with an appropriate, patriotic American response.

No one—except possibly the Japanese—wants to see the United States as the world’s leading exporter of ballistic missiles, soybeans, and sowbellies while Orientals manufacture everything in between, so Schlossstein’s plan should attract some approval, particularly if the Reagan economy turns sour. But if the American industrial structure is to be transformed so as to seize opportunities in the world marketplace before the nimble Japanese get there first, can the Americans learn anything from Japanese economic arrangements?

It’s always a good idea to go the experts, and Lester Thurow in The Management Challenge: Japanese Views has asked a selection of Japanese businessmen and academics to explain why their system works so well. Unfortunately, however, their responses range from obscure to downright incredible. What, for instance, are we to make of this assertion by Dr. Okita Saburo, adviser to the Japanese government’s Economic Planning Agency?

Although the Japanese government has produced several economic plans since the end of World War II and has an economic planning agency, the Japanese economy is not a planned economy. It is a predominantly private-enterprise economy. Occasionally government intervenes in private activities, but the basic nature of the present Japanese economy is a highly competitive market economy.

Vaguely, I suppose, we can see what Dr. Okita is getting at: although the Republic of Honduras exports bananas, as another example, it is not a banana republic. We have to distinguish simple description from loaded, pejorative, hurtful expressions. Dr. Okita amplifies his thoughts on Japanese planning:

Based on the character of the plan, it is necessary to restrict to the minimum government direct control measures and give free rein to private enterprises as much as possible—recognizing that it is the motive power for the development of the economy. The government must also establish long-range measures for undertaking projects which are difficult for private enterprise to carry out. That is, the government must reinforce social overhead capital such as roads, railways and port facilities.

Once again, we have a trans-Pacific failure of communication. Professor Thurow adds helpful notes to his contributors’ essays, but he might, I think, have made things even clearer, by explaining the differing philosophies that underlie the notions of planned and unplanned, free and unfree, in these exchanges. Encountering the expression “free enterprise,” a Japanese is less likely to think of Henry Ford than to hear the voice of Confucius, who defined the free man as he who is in a position to carry out his social obligations, as laid down by higher authority, without having to pay off petty tyrants along the way. The wise government is the one that sets a good example and points to the path that loyal subjects should tread, in their own interests. Here, from a Confucian viewpoint, lies true freedom.

A recent example might make things clearer to non-Confucianists. Earlier this year a certain Taiji Sato, an ex-boxer and small businessman who operates Lions Oil, a chain of seven gas stations near where I live, tried to import gasoline from Singapore which he proposed to retail at five yen a liter cheaper than the big Japanese refiners. I would not have had the nerve to buy Sato’s gas, but others might. The Ministry of International Trade and Industry, however, believes that imports of cheaper gasoline, while perfectly legal, would disrupt the Japanese refining industry and might cause the price of kerosene to go up.

An official of the ministry therefore telephoned Sato’s bank and made this point, purely from a philosophical viewpoint. This happens a lot in Japan and is called “administrative guidance,” the duty Heaven imposes on a Confucian ruler gently to correct those who stray from the true path. Sato’s bank thereupon cut off his credit and instructed him to sell his gasoline to one of the Big Five established refiners, who in turn sold it at the normal price, thus preserving the orderliness of the market and the stability of Japanese society.

The facts are not in dispute, but the incident has led, in Japan, to some discussion about whether this can truly be described as free enterprise in action. The Japan Times has ruled on the matter, as follows:

This episode provides a notable example of the difference between principle and reality. The principle, stipulated by law, is that trade in oil products is free. That is why Lions signed an import contract. The reality, supported by official guidance, is that such products—gasoline in this case—cannot be imported without Government approval.

The need for price stability, particularly in a market exposed to perennial price competition, is understandable. Nevertheless it is unfortunate that the lawful attempt by a minor oil retailer to import lower-priced gasoline has been crushed under the weight of reality. The sooner the reality is made to conform to principle, the better.

His market share drastically trimmed, Sato nevertheless had a very Japanese reaction: “The name of Lions Petroleum,” he said, “now ranks with Mobil and Exxon.” The Japan Times, we might note, wants shadow and substance tidied up (a constant preoccupation of Japanese intellectuals) not cheap gasoline imported. Another Thurow contributor, Kiuchi Takashi of the Mitsubishi Electric Corporation, makes the Japanese attitude even clearer:

First, trade imbalances have emerged not because Japan has forcibly exported, but because people abroad have been willing to buy superior but cheap goods. Second, all major cases of trade friction are made the subject of Japan’s voluntary export restriction or of the importing country’s import restriction. Third, foreign requests concerning Japan’s nontariff trade barriers [to imports] are tantamount to raising objections to Japan’s social structure. Therefore there is little possibility that those requests will be met. [my italics]

Nothing, from a Japanese viewpoint, could be fairer than that. The Japanese intend to protect their social harmony, or wa, the heart of their society, even if it means more expensive driving, eating, housing, and other less important aspects of life. How Americans protect their wa is their problem. But if Americans, or any other qualified market, are having wa problems caused by Japan, then international wa is the answer: Japanese and foreigners can cut a deal, accompanied by heavy sake drinking in Japanese restaurants, nonverbal communication, exchange of visiting cards, and other sure-fire Japanese aids to wa. Both sides can then sell the resulting quota, “voluntary” restraint, or whatever, to their respective industries, using, of course, not compulsion, but further helpings of wa.

By Japanese ideas this is not a denial of free trade, it is free trade, because, as the Mitsubishi man says, no one is being forced to buy Japanese goods, while the Japanese are free to arrange their own affairs at home any way they like. One such arrangement, for example, the merger of two Japanese-style free-enterprise companies, Yawata Steel and Fuji Steel in 1970, produced the world’s biggest steel company, New Japan Steel. This merger makes sense to all Japanese, because steel is both an unprofitable business now that Taiwanese and Koreans are also using wa, and, as the Japanese say, “steel is the rice of industry,” meaning that a manufacturing country needs a reliable cheap supply of it.

This merger was promoted by the Ministry of International Trade and Industry which, as the name suggests, keeps an eye on international trade and the industries that supply it, against the strenuous objections of the largely powerless Japanese Fair Trade Commission (a relic of the American occupation). It is true that two men from MITI sit on the board of New Japan Steel, and the first president after the merger was the newly retired MITI vice-minister, Hirai Tomasiburo. But New Japan Steel is a private concern, the Japanese insist, and is not part of a planned economy, being the result, not of compulsion, but of everyone doing what is clearly the best for Japan and therefore for themselves. How about New Japan Steel’s rusty American competitors? As one of Professor Thurow’s contributors asks despairingly: “Who is watching out for the [US] steel industry and worrying how to make it viable? No one? The market?” The answer, I suspect, is no one. The advocates of a US industrial policy want “business” and “labor” to collaborate with “government” to do the worrying. But the more one looks into the workings of Washington wa, the more it seems that the I’ve-got-mine, you-get-yours outlook of Americans will be hard to change—it is in fact the basis of America’s social structure.


The writers I have been discussing all suggest that changes, one way or another, will have to be made in the United States in response to the Japanese challenge. Marvin J. Wolf, in The Japanese Conspiracy: The Plot to Dominate Industry World Wide—And How to Deal with It, has a radically different proposal: the Japanese, he says, must be stopped now—before it is too late. Wolf, clearly, is no admirer of Japanese culture. Presenting, as it were, the case for the prosecution at some notional Tokyo Trade Crimes trial, he ringingly denounces

a system of business activity which can best be described as economic totalitarianism [italics in the indictment], a government-directed enterprise in which all the energies of Japan have been mobilized to overwhelm the world competition. It is a national conspiracy directed from a central command post, a squat eleven-story building in Central Tokyo, the headquarters of MITI, the Ministry of International Trade and Industry.

The modus operandi, says Wolf, is “a concerted, covertly organized industrial plan” featuring “predatory pricing, secret Government subsidies, the targetting of advanced technology industries in America and elsewhere, restrictions on direct foreign investment, and a grossly undervalued currency.” Their motive: “at least in part…revenge for Japan’s devastating defeat in World War Two.”

The Japanese have, Wolf writes, “brilliantly disguised their conspiracy in a cloak of free enterprise,” are waging “economic war without any rules,” and can be dealt with only by “relentless punishment of each incident of anti-competitive behavior.” At the root of Japan’s criminal behavior, in Wolf’s view, is their refusal to live like Americans. Instead of eating Japanese food, “they could import enough low-priced American foodstuffs—grain products, beef, citrus fruits—to eliminate perhaps half their US trade surplus, simultaneously providing their citizens with a more nourishing diet.”

There is no need for them to live in poky little Japanese houses, either: “America and the European nations, if allowed to sell their expertise in designing, building and furnishing homes, could transform Japan into a far more livable country” (for Americans and Europeans, anyway). Even the way they speak is part of the plot: “the Japanese language seems designed for the speaker who wants to deceive. In Japanese, the verb is always placed at the end of the sentence, a syntax that can be artfully manipulated.” (The Romans, we might recall, used the same trick and wound up the world ruling.)

Disgusted by this landscape of lie and deception, Wolf retreats to the American embassy, which is “light and airy, in welcome contrast to most Japanese office buildings…. It is one of the few places in Japan where genuine American fare is offered, and at prices considerably below those prevailing in Tokyo.”

Putting, as prosecutors tend to do, the worst construction on everything, Wolf nonetheless gives an informed account of the way the Japanese system works—as seen, that is, from the outside. The Japanese certainly tend to concentrate on lines of manufacture they are good at (“targeting”). They often sell their products abroad at prices below what the Japanese retailers charge at home (“dumping”) and collect all the information they can about foreign products, processes, and market opportunities (“industrial and commercial espionage”). It is certainly true, as Wolf charges, that MITI has diverted the proceeds from gambling on bicycle races to finance R and D in the machine-tool industry, a resource not available to Americans in the same line of business. Indeed, from a Japanese viewpoint, how much wiser it is to use this money in the national interest than, in the American way, letting the local equivalent of the Mafia have it.

Wolf has, in particular, shown almost Japanese diligence in digging up every Japanese scandal of recent decades, from the Showa Denko affair of 1952 to Lockheed, which, since former Prime Minister Tanaka Kakuei is currently appealing his conviction and prison sentence for taking a $2 million bribe, is in a sense still going on. He is right to concentrate on this aspect of the Japanese economy, which is indeed of the utmost importance to an understanding of how it works. Japan has institutionalized corruption (once again, this is an unkind Western expression for what the Japanese call “back money” or “nose medicine”) as a way of ironing out anomalies, or introducing some cash, checks, and balances into the system. As a matter of principle Japanese bureaucrats do not take bribes, and are thus generally accepted as giving their “administrative guidance” selflessly in what they conceive to be the national interest. In fact, Fukuda Takeo, then vice minister, or administrative head, of the Finance Ministry, who was accused of taking “back money” in the Showa Denko scandal, had no honorable course but to resign and turn politician, later becoming prime minister.

How then can companies get access to the bureaucratic circles in which decisions critical to their futures are being made? The job of the Japanese politician is to accept “back money” (which he will, in turn, spend on buying free drinks and other inducements for the voters) in order to see the supplicant’s viewpoint and as far as possible influence the bureaucracy in his favor, all, of course, within the Japanese limits of hodo hodo, or what is felt to be fair and reasonable. Economic gnats like Lions Petroleum cannot, of course, afford this access, and the impudent Sato was in fact guilty more of lese majesty than of questionable, over-free trading.

But Japanese politicians are, by strict convention, for sale only to Japanese. The real offense of Boss Tanaka was not in taking a bribe, but in taking foreign money from Lockheed; this is the business equivalent of allowing a foreign teacher to corrupt Japanese youth with non-Japanese ideas, and it is easy to see the sense of it: if foreigners can buy their way in, the shared Japaneseness which makes nonverbal communication and indeed the whole wa structure workable will soon break down. But what are we to make of Wolf’s main charge, that Japan is engaged in a monstrous, world-shaking conspiracy? Actually, purged of its pejorative overtone, “conspiracy” in its literal meaning of a “breathing together” is not a bad way of describing the Japanese system. It is also true that the Japanese establishment has decided that the future lies with knowledge-intensive industries rather than energy-intensive ones, exactly as the American establishment has (and, indeed, as primary schoolchildren in both countries have long been aware).

What then to do about the Japanese challenge? The school that wants to see an American counterconspiracy has to devise ways of doing so within the American tradition, no easy task. Wolf, on the other hand—whose point of view seems close to that of some of the flashier Silicon Valley entrepreneurs—wants somehow to force MITI to disband, to impose “quotas, from perhaps 10 to 30 percent of market share on all Japanese goods,” which “would not only check the Japanese conspiracy but be a great stimulant to domestic industries, both in the United States and Europe.” He also wants Japan to refund its trade surplus in cash—not all of it but enough to cover US outlays for Japanese defense. Sound or otherwise, these plans would involve a new occupation of Japan and a restructuring of Japanese society by the same people who, in fact, put MITI in charge of Japanese trade and industry in the first place (the zenith of MITI’s power was during the occupation).

The truth is at the same time simpler and more complex than a conspiracy. National capitalisms are just as diverse and potentially in conflict as national communisms, and the system these writers (and I) have been studying really is the Japanese version of “free enterprise” shaped like all the others by their history and tradition. If the Japanese system resembles anything the West has ever seen, it is fascism in its early days in Italy,2 or Germany’s war economy of 1917–1918, described by its leading promoter Walter Rathenau as “closely akin to communism in its methods, yet it departs essentially from the prophecies and demands resulting from radical theories.”

But Mussolini had only fractious Italians and the myth of ancient Rome to work with and, even so, some of the enterprises of his time endure to this day. Similarly, some of Rathenau’s survived the second wreck of the German economy in 1945, to live on in the bureaucracy–bank–business triad of today’s Federal Republic. The Japanese are also doing no more than working with the culture they have inherited, trusting in the promise made at the time of the Potsdam Declaration that the Allies’ intention was “not to pastoralise Japan or starve the Japanese people, but allow them to find their own place in the world by peaceful trade and industry.” They are only doing, with predictable Japanese zeal, exactly what the man said.

The Japanese spirit of community is very ancient, and it has held together through unimaginable disasters (which blind loyalty to consensus largely brought about in the first place, of course). The Japanese are not likely to abandon it now, when they have already achieved economic power in the world and prosperity at home that the stiff-necked samurai of 1860, dozing on alien bathroom utensils, could scarcely have dreamed of. No one knows what Japan’s final place in the world will be, but it looks like being an even more important one. If this means the “pastoralising” of Pittsburgh and Silicon Valley, these are America’s problems, not Japan’s.

This Issue

March 28, 1985