A Tokyo Tocqueville

The Enigma of Japanese Power, by Karel van Wolferen, New York: Knopf, 496 pages, $24.95

Some 160 years ago, a young Frenchman set out on a journey to study prisons in the United States, returning home after many months to write, in addition to the planned monograph, a truly great book about politics in a democratic age. His name, of course, was Alexis de Tocqueville, and Democracy in America is without peer in plumbing both the character of the first new nation and the political trends that shaped the century that followed.

Now a Dutch journalist named Karel Van Wolferen, based in Tokyo for the last 25 years, has written a book that does something similar for Japan and, I fear, for the next scene in the global melodrama. It's called The Enigma of Japanese Power, and it paints a somewhat terrifying picture of the world's dominant economic power.

Van Wolferen argues that Japan, behind a facade of constitutional democracy and free markets, is actually an oligarchy. Seemingly modem institutions supposedly under popular control are in reality insulated from outside influences and are run by tiny, self-appointed cliques in their own interest. Politically speaking, no one is in charge. Formal policymaking and representative institutions (parties, parliament, prime minister, elections) are shell games worked by ministries, top bureaucrats, and corporate interests to their own self-chosen ends. The state is weak; sovereignty scarcely exists. Big issues concerning the public interest and the fate of the nation aren't addressed or dealt with. Japan is a juggernaut on a course no one can predict or control.

Power in Van Wolferen's Japan is located mainly in the huge, cartel-minded, export-oriented megacorporations. They are coddled by policies making capital cheap, labor docile, investors loyal, and customers abject. They're carefully exempted from any really dangerous foreign competition in the home market. They're free to pursue an obsessive desire for sales volume and market power with little regard for the costs and risks that such a strategy entails in ordinary circumstances. Proof of the corporations' privileged position is the fact that the Japanese, though they out produce everyone in the world, enjoy a living standard not much above that which prevails in the Soviet Union.

Contrary to most observers, Van Wolferen argues that the Japanese system isn't a simple case of pluralism or corporatism with an Oriental accent. The Japanese system, he holds, stymies the popular participation that pluralist and corporatist theory assume. It is, in an ancient and useful term he doesn't make use of, an oligarchy.

Van Wolferen has written a subtle, richly detailed book that ranges widely through Japanese history, culture, and postwar politics. Though written by a person immersed in Japanese events and personalities of the past two decades, Van Wolferen's book is much more than journalism. It's a work of high social theory that rises above the conventional social science because the author isn't isolated in a methodological and disciplinary cloister. His theory grows out of intimate, direct, personal knowledge based on experience as well as scholarship. One quickly comes to trust and like the author.

This is a scary book. Van Wolferen writes in part to warn the West that Japan really is different. Uniquely among modern nations, Van Wolferen's Japan is capable of behaving in ways harmful to itself and others. Oligarchy has a profound blindness to the consequences of actions that serve the oligarchs' interests. That, says Van Wolferen, is why the Japanese military regime attacked Pearl Harbor in 1941 despite the vastly superior industrial might—and, therefore, the superior eventual military might—of the United States. Van Wolferen's main point is that Japan today is quite capable of undertaking the economic equivalent of Pearl Harbor, for example, by continuing to expand exports but not imports regardless of its increasingly protectionist-minded trading partners' rage, thereby inviting a global economic holocaust.

If Van Wolferen is right about this, the implications for U.S. trade policy are ironic, however. In the months since the book was published, Van Wolferen has been assailed by Japanese and their many American academic apologists and warmly embraced by American protectionists, as if the book called for tough retaliatory measures against what Peter Drucker terms adversary trade. Actually, what Van Wolferen's thesis suggests is that it's futile to pressure the Japanese to lower their trade barriers on pain of being shut out of the foreign markets that have made them so rich. If Japan works the way Van Wolferen says it does, section 301 retaliations by the United States won't have the slightest impact on Japanese trade policy. They'll merely touch off a fresh chorus of Japanese self-pity over their unfair victimization by the gaijin losers and fresh PR to hypocritically reassure foreigners that Japanese protectionism is on its way out even as the trade barriers that are driving Japan's trading partners around the bend are given a new lease on life. Van Wolferen's subtext is that only the United States can prevent a protectionism-induced worldwide depression à la 1930—that no matter how badly the Japanese may act, the correct U.S. response is never to respond in kind. Thus the people who really ought to be celebrating Van Wolferen's thesis are the adversary traders in Tokyo and the free traders in Washington! U.S. protectionists can take little comfort in this book.

I am not sure, however, that Van Wolferen is entirely correct in his analysis. Like Tocqueville's effort to explain everything about America in terms of equality of condition, Van Wolferen's oligarchical thesis slights some important realities. The Japanese system has an ability to change directions and act prudently that Van Wolferen doesn't do justice to. He eloquently explains the extraordinary political career of Kakuei Tanaka, prime minister from 1972 to 1974 and for a decade thereafter the kingmaker of the Liberal Democratic Party. It was Tanaka who set Japan on its present course of export-oriented economic growth; who ditched the left and built a new (if corrupt) foundation under the dominant LDP; who presided over the forging of an entente between industry and environmentalism; who, in short, put together the Japan the world has come to know and respect and fear over the past two decades. Yet Van Wolferen's theory in effect denies that leadership on such a scale, involving the exercise of sovereignty and a change in national direction, is possible in Japan.

Van Wolferen's failure to acknowledge Japanese political leadership is paralleled by a slighting of Japan's business achievements, which he attributes largely to public policies that starve the consumer sector and to corporate structures that enable Japanese managers to invest vast sums over long periods at little or no profit. These, to be sure, are important advantages, but they are far from telling the whole story.

Van Wolferen says nothing about the leadership and organizational resources that, in less than a decade, enabled the Japanese automakers to shift from producing tiny, ugly, underpowered, rickety econoboxes for the domestic market to producing what are by far the best cars in the world, vehicles that dominate the biggest auto markets despite protectionist barriers and that are earning enormous profits in the process. And the case of Japanese car companies isn't unique. In industry after industry, the Japanese have shown an astonishing ability to boldly respond to markets different from their own and to outperform non-Japanese competitors well entrenched in those markets. Where have Japan's supposedly pampered business oligarchs, supposedly isolated from any need to deal with others on the others' terms, found the incentives and skills to undertake the redefinition of their own businesses—and their own managerial roles—that their recent competitive success has entailed? To my mind, this is the central puzzle about Japan. Van Wolferen doesn't illuminate the issues involved.

The Enigma of Japanese Power is Toquevillian in the prophetic as well as the analytic sense. Reading this volume, I was often struck by how strongly the United States and other industrial societies are coming to resemble Van Wolferen's Japan.

The book calls to mind the extent to which the Western economies are tranforming themselves along Japanese lines. Responding to the challenge from the East, many American and European firms are following their Japanese competitors in improving product quality, involving employees more intimately in the life and affairs of the workplace, and developing better products for new or newly segmented markets. In Washington and the state capitals, there's been growing emphasis on tax and other policies to boost economic efficiency and growth.

But there are sharp limits to the extent to which the West is apt to reproduce Japan's economic miracle, which Van Wolferen's analysis suggests is sui generis to a very substantial extent. For example, it'll be a cold day in hell before policymakers in the West start starving consumers and fattening producers in the Japanese manner, or before Western corporations develop the social homogeneity and unity of purpose that enable large, bureaucratic Japanese firms to attain levels of creativity and competitiveness usually associated with small, new, entrepreneurial firms.

For me, the really striking areas of convergence between East and West suggested by Van Wolferen are political and cultural and involve not the Americanization of Japan but the Japanification of the American political system. Van Wolferen's demonstration of how Japanese leaders create the illusion of governing in the public interest while actually avoiding issues and serving the oligarchical powers that be reminded me of how, in an age of news media, spin management, and political action committees, our own politics seems increasingly to work the same way. Our political parties, like Japan's, neither represent nor govern. Our policymakers, like Japan's, spend most of their energy posturing in behalf of the public interest while always making sure that nothing they do would give offense to any substantial organized interest and that most of what they do serves those interests. Our media, like theirs, generally cooperate with dominant institutions in putting out the deluge of thematic events that conceal and legitimate oligarchy. Our culture, with its modernist relativism, has less and less room for universalistic notions of morality and truth whose absence in Japan, according to Van Wolferen, is a key reason for the oligarchy's ability to manipulate the system.

In only one way—but it may be a decisive way—does the United States appear not to be converging on the Japanese model: in the scope we give to the individual as a cultural ideal, legal reality, and fact of social life. In Japan, writes Van Wolferen, the individual scarcely exists, and Japanese rhetoric to the contrary notwithstanding, there's little reason to think that the individual will become a force anytime soon. The Japanese, Van Wolferen argues, can't change jobs or residence at will, are subject to minute (if polite) police surveillance, and have limited rights at law and very few lawyers to help enforce them. Indeed, the system of social control he describes is so tight that in many respects the Japanese individual seems less free than a Russian under Stalin or a Chinese under Mao. In Japan, there are no dissidents. Though Van Wolferen doesn't make this explicit, the implication is that U.S. survival may well rest on its ability to remain true to the better angels of its individualist nature.

Paul Weaver, author of The Suicidal Corporation, is a John M. Olin media fellow at the Hoover Institution.