Out of Lukewarm Water Is Japan Ready to Dive into the Cold Water?

Public Relations Office        March 21, 2013

Tomoharu Washio, Professor, School of International Studies

Tomoharu Washio, Professor

Tomoharu Washio, Professor

In Japan’s lost 20 years, it has been revealed that the nation has four “naïve” views toward international society. First, the nation has a naïve expectation that effort is always rewarded and that the world will accept and highly recognize the nation someday. Second, it embraces a naïve but firm belief that existing rules will never change. Third, it supports a naïve idea of groupism. Finally, it endorses a truly naïve principle of the precedence of international equilibrium.

You must secure your own position by yourself. Your opponent will try to change the rules if he or she finds them inconvenient. If the rules are changed, making competition even more severe, the result will depend on the ability of the individuals involved. No matter what is said, every country respects its own domestic affairs. It might be fair to say that Japan is at the mercy of these four cruel realities of world politics.

As a result, the Japanese economy suffers a chronic lack of investment opportunities. Deflation phenomena and decreased annual incomes force people in Japan to be defensive. It has become essential for both the husband and wife to work in order to support their household, drastically changing the Japanese family system and values. Choosing to have fewer children is prevalent now in society; companies are worried about the decreasing population and associated reduction of their markets.

Politics is now being affected badly by populism. The emphasis on assessment systems and transparency prevents private organizations from dealing with issues in a flexible manner according to circumstances. No matter how much effort each individual exerts to break the sense of helplessness, such efforts are not accepted by society and his/her organization, which cling to past successes and become accustomed to acting “by the manual.” People in Japan are depressed and demoralized, discouraging them from establishing themselves in an international society.

In Considerations on the Causes of the Grandeur and Decadence of the Romans, Montesquieu of France says that what the Roman senate dreaded most was the demoralization of the general public, which deprived citizens of whatever energy they had left. What if such demoralization is occurring in Japan today? The world may focus on this “Japan disease” as a serious problem.

One of Japan’s neighbors sees things from quite a different perspective. That neighbor is China, which has been enjoying economic growth of 10% a year. There, people fear that inflation is a clear and present crisis factor and that, unless development is achieved now, they will be left behind. This makes the people anxious for development, leading to further economic growth. While strict regulations remain in the field of investment in productive factors, many restrictions have been removed in product markets. The one-party autocracy of the Chinese Communist Party enables domestic markets to be placed under government control, isolating the markets from confusion, even in the current period of global crisis.

Schumpeter, an economist, defines an innovator who brings development as someone who foresees the future, has a willingness to change direction, and overcomes social resistance against new trials. Keynes warns that, if the spirits of entrepreneurs are dimmed and spontaneous optimism falters, leaving us to depend on nothing but a mathematical expectation, enterprises will fade. In the mid-1980s, the U.S. described Japan, which was reluctant to conduct structure reforms, as a frog in lukewarm water gradually being heated to the boiling point. It is obvious that the frog will die if nothing is done, but the present situation seems so comfortable that the frog chooses not to jump out of the water.

Without determination and preparedness to enhance the national strength again with fresh insights, it would be impossible to brighten Japan’s new prospects.

Profile of Tomoharu Washio

Graduated from the School of Business Administration in 1970. Joined the Japan External Trade Organization (JETRO), where he assumed positions such as Directer general of the Overseas Research Department, Special Coordinator for North America and Oceania (also in charge of the Film Media Team), Executive Vice President (Board Member), and Special Advisor to JETRO in charge of Research and Planning. During this period, he was stationed in the U.S. three times (New York and Chicago). Has published many books such as Gloom of Wen Jiabao, (JANET, Jiji Press, 2008) and Challenges and Trials of Energy Cooperation between Japan and China (World Economic Review, 2007).

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