Japanese businessmen like the idea of an Anglo-Saxon economy but not the realityby John Plender / May 20, 1997 / Leave a comment
The former prime minister James Callaghan once remarked of his successor that the further one went from Britain, the higher the esteem in which Margaret Thatcher was held. Having recently returned from Japan, I can vouch for the truth of this barbed compliment. Wherever I went in Tokyo, politicians, bureaucrats and businessmen volunteered profound admiration for the lady.
Among other things, this enthusiasm is a symptom of decline of Japan Inc-the model of egalitarian corporate capitalism in which the Japanese entrusted the management of the country to a bureaucratic and business elite while working furiously in pursuit of economic growth. Today the bureaucrats are blamed for the disastrous economic bubble of the late 1980s and for the subsequent recession which has left a lingering banking crisis. Incompetence has been accompanied by allegations of corruption, encompassing even the super-mandarins at the ministry of finance.
One indication of the breakdown of trust between the business community and bureaucrats is that amakudari, the “descent from heaven” whereby some 300 bureaucrats a year used to join big business on retirement at 55, is petering out. Nobody wants them any more. Another is that businessmen rejoice in market forces. They claim to want labour practices that allow individuals to fulfil themselves, take responsibility and meet challenges.
As always in Japan, these statements mean both more and less than appears at first sight. Jiri Nemoto, boss of the employers’ federation, enthuses about labour flexibility and Margaret Thatcher. But he is appalled by the escalating salaries in American and British boardrooms and shocked at the degree of inequality in the two countries.
Other leading businessmen told me they recognised the need to raise the return on capital to internationally acceptable levels. But maintaining employment and satisfying other stakeholders would continue to be overwhelming priorities. None saw merit in the US culture of constant improvement whereby companies continued to fire people even when they were highly profitable.
Japan Inc has often been over-idealised in the west. Lifetime employment was confined to large companies. The whole system depended on an army of less privileged workers in smaller firms that were ruthlessly squeezed by their corporate customers; also on compliant wives, without whose support longterm commitments in the workplace would not have been possible.
The risk now is that the enduring merits of the Japanese model will be too easily disregarded. A system which asserts the primacy of human…