I must say that I have had a revelation about Japan this past week. There really is no one in charge and the country is adrift.
Yes, I know you've heard this many times before. For years, prime ministers came and went in Japan even more rapidly than in Italy. Ministers were a dime a dozen. Just about the time you remembered the name of the minister of foreign affairs or finance, the guy would be gone and you'd have to start trying to remember all over again.
But in the old days there was a division of labor in Japan that may have been murky to outsiders but that was very clear to those who ran and understood the system. The political scene was dominated by the Liberal Democratic Party. Of course, it was neither liberal nor democratic, but it was a party that understood how to grease the wheels of Japan's politics. So it did the politics. Meanwhile, Japan's superb bureaucrats took care of vision, policy, and actually running the country.
I remember being awed in the era 1965-2000 by the power of officials such as the vice minister of International Trade and Industrys (MITI), the director of the Industrial Policy Divison, and even the assistant director of the Auto Industry Section. I recall in 1984, Sony Chairman Akio Morita telling me apropos of disputes between the U.S. and Japanese semiconductor industries that the MITI officials needed to give "strong guidance" to the CEOs of the Japanese electronics companies. I recall being in the office of important Japanese CEOs such as the head of NEC when he received phone calls from these MITI officials and took them immediately. In 1985-86, I and Michael Smith and other U.S. trade negotiators cut a deal with the Japanese officials that halted dumping of Japanese semiconductors in the U.S. market and that assured the U.S. semiconductor industry or a very high probability of gaining a twenty percent share of the Japanese semiconductor market. Not only did these officials have the power to cut that deal, but they made it stick.
Well that was the "good old days" that are no more. Over the past week, I spent time at Japan's Ministry of Economics Trade and Industry (METI). It is the successor to MITI but only as a pale, pale facsimile. In discussion with one high official I noted that Japan is suffering a hollowing out of its big manufacturing industries such as autos, semiconductors, and consumer electronics (Can you imagine that South Korea's Hynix may acquire the bankrupt Elpida, Japan's last maker of semiconductor DRAMS?). His response was that METI's new theme is "Cool Japan" with emphasis on the writing of Manga (cartoons), cooking, and development of computer games. He actually said that Japan is suffering fatigue from its competition with Korea. I nearly fell off my chair. Where were the do or die men of yore who dared to challenge and beat the giants of American industry, men like Naohiro Amaya, Makoto Kuroda, and other unsung heroes of Japan's economic miracle.
Well, apparently what has happened is that in the past ten or fifteen years, the politicians have decided to do policy as well as politics. Power has moved out of the bureaucracy to the prime minister's office and to the Diet. Of course, this is what we Americans always wanted in the past as we wrestled with the bureaucracy. But what we missed at the time was the fact that, difficult as it was, the bureaucracy had a vision and ideas and a plan for realizing them. Unfortunately, today's Japanese politicians seem to have no vision and no ideas and no plan.
Years ago I wrote a book entitled Trading Places. It referred to Japan overtaking the United States in key areas of technology and industry. Now that seems to be happening in the political realm as well. Japan, like the United States, increasingly seems to have no idea of where it is going or how to get there.
Clyde Prestowitz is the president of the Economic Strategy Institute and writes on the global economy for FP.