1999 (37 page)

O
nly one new economic superpower has emerged in the world since World War II. Only one Asian country in history has entered the first rank of modern industrial powers. That same country has the most stable democracy in Asia. It is Japan, an ancient storied land whose economic and political success stories in the last forty years can only be described as mind-boggling.

Tocqueville foresaw that the United States and the Soviet Union would be the most powerful nations in the world and also the world's most powerful adversaries. But in his time Japan still lay beyond the reach of the West's consciousness, shrouded in mystery within the closed society created by its rulers. Commodore Perry opened Japan in 1854, and around the same time its leaders realized the key to its future lay in making judicious use of Western influences.

Japan's development was steady, but the West was slow to sense it. In 1924, on one of the rare occasions when he made a mistake in predicting the future, Winston Churchill said, “Japan is at the other end of the world. She cannot menace our vital interests in any way.” Seventeen years later the British Empire and its allies were overwhelmed by the Japanese Empire in the Pacific theater of the most destructive war of all time. And just as Churchill could not have predicted the war with Japan, he could not have predicted
that forty years after the war Japan would be a trusted member of the Western community of democratic nations and would be on the verge of becoming the strongest economic power in the world.

As late as 1929, Japan's share of world economic production was 4 percent, compared with the United States's 34 percent, 10 percent each for Britain, Germany, and the Soviet Union, and France's 5 percent. Today Japan's share of world GNP is 10 percent, second only to that of the United States. In 1945 it was defeated, and its industrial plant smashed, by American bombs. In 1987 it was America's largest trading partner after Canada, and its GNP surpassed that of the Soviet Union.

It is frequently said that Japan's economic miracle is the most significant development of the postwar era. But even if there had been no war Japan would still have become one of the world's mightiest industrial powers. If anything, the war accelerated the process. In the early 1950s Japan's legendary Prime Minister, Shigeru Yoshida, said, only half facetiously, “Fortunately, Japan was reduced to ashes by air raids. If Japan introduces new machinery and equipment now, it should be able to become a splendid country with productivity far higher than the countries that have won the war. It costs much to demolish machinery, but the demolition was done for us by the enemy.” The fact that he was right is a reflection of why the conservative policies and principles enunciated by Yoshida are still in large part observed by Japan's leaders today.

It is fashionable to write and talk about the Japanese economic miracle. But the more impressive Japanese miracle was the birth of democracy in a society that had been ruled for centuries by warlords and emperors. Planted by the American occupation under the visionary leadership of General Douglas MacArthur and nurtured by Yoshida and his carefully groomed sucessors, democracy has taken hold and put in deep, lasting roots. In the twentieth century Japan's great achievement has been an economically powerful Japan. America's great achievement has been a democratic Japan. No nation in history has conducted a military occupation with such admirable intentions and such lasting, beneficial results as the United States. No nation has made as much of such opportunities as Japan. One of the greatest ironies of our time is that the
average income of a citizen of the nation that lost the war is, at $16,000 a year, only $2,000 lower than that of a citizen of the nation that won. Just over twenty years ago Japan's average personal income was 25 percent of the United States's.

Japan's transformation into a pro-Western industrial democracy is one of the most fortuitous developments of the postwar era. While it is an Asian rather than a European nation, it is as critical to the Western alliance as any member of NATO. Strategically, it holds the Eastern ramparts. Economically, its might is indispensable if we are to have a unified Western economic policy. And practically, it has much to gain from an alliance with the West because it has just as much to lose as the United States and the Europeans from further Soviet advances.

Japan has become an indispensable member of the Western alliance. If it were to fall under Soviet domination the Pacific would become a red sea. In 1983 Prime Minister Nakasone pledged that his country would be an “unsinkable aircraft carrier” in the effort to deter Soviet aggression in the Far East. His dramatic metaphor did not even go far enough, because it implies a far-too-passive role for the Japanese. The United States, Japan, and Western Europe make up over two thirds of the world's total economic output. The day that all that economic might becomes part of a single geopolitical strategy—matching public and private development aid, military expenditures, and trade—is the day the West will win the Cold War. Against the combined and unified forces of freedom, totalitarianism can never prevail.

The Western alliance is immeasurably stronger with Japan than it would be without it. Both the United States and Japan should be proud of the partnership that produced a democratic Japan out of the bitterness and destruction of war. But the war and the American military occupation that followed it—and the period of Japan's dependency on the United States that followed the occupation and that continues today—have had negative results as well as positive ones.

Japan is now governed by a constitution written and translated into somewhat awkward Japanese by Americans. It contains an antiwar provision that at the time sparked little controversy in a country that was exhausted by war but that today, with a healthy
sense of national pride on the rise, some Japanese find insulting. In the meantime Japan, like West Germany, remains dependent on the United States for critical elements of its national defense.

A relationship based on dependency can breed contempt on both sides. So can the harsh memories of war. Pearl Harbor was only forty-seven years ago, the Bataan death march only forty-six years ago, and Hiroshima and Nagasaki only forty-three years ago. A Japanese who is thirty-five years old today was born in a country that was under military occupation and ruled from Washington, D.C. Americans and Japanese have their own ways of remembering these events and judging whether they were right or wrong. On the surface Americans and Japanese, perhaps better than any other former antagonists in modern history, have overcome their differences and learned to work together to their mutual benefit. But it is an unfortunate fact that many Americans, who have no experience of foreign military occupation, still resent the Japanese for starting the war, and many Japanese, who have no experience of foreign military aggression, resent the occupation. And seared into the consciousness of every Japanese is the realization that Japan was the first and only nation to experience the horrors of nuclear war.

These resentments become significant, and dangerous, only when they are exacerbated by other factors—such as the bitter economic disagreements that have clouded U.S.–Japan relations in recent years. Unless the leaders of both Japan and the United States act with courage and foresight, today's temporary economic pressures could do permanent damage to one of the most important and fruitful bilateral relationships in the world.

While it is by no means the most important element of the relationship between the United States and Japan, the most neuralgic issue is the trade imbalance. In 1986 the Japanese sold $60 billion more worth of goods in the United States than we sold in Japan; this was the major factor in creating a worldwide U.S. trade deficit of $170 billion. Japan's critics say this imbalance costs American jobs and complain that the Japanese have closed their markets to American goods.

There are a number of actions Japanese policy-makers could take to increase the amount of money Japanese have to buy imported goods and services. It could buy American rice for $180 a ton; instead it forbids rice imports to protect Japanese farmers, whose rice costs $2,000 a ton. A change in property-tax and zoning policies could ease the astronomically high cost of land and thereby give consumers more money for other expenditures. For instance, the price of a parcel in downtown Tokyo is 900 percent higher than a comparable parcel in midtown Manhattan. In the suburbs some medium-sized houses that cost $70,000 in the mid-1970s now cost as much as $1 million. And while the Japanese have canceled so many import-blocking tariffs that they now have fewer in force than the European Economic Community, they could do more to lower the bureacratic, nontariff barriers that prevent American firms from participating to a significant degree in such projects as the massive new Kansai Airport in Osaka Harbor.

The perennial and politically popular complaints of American protectionists notwithstanding, however, the Japanese are not entirely, or even principally, responsible for the trade deficit. Changes in the value of the dollar and the yen have also had powerful effects. For fourteen of the years between 1955 and 1975,
Japan
had the trade deficit, importing more than it exported. But then the value of the dollar, and American demand for fuel-efficient Japanese cars, took off and Japanese imports began to flow into the United States. When the dollar plunged against the yen in 1987, the edge began to come off the trade deficit and Japan began to suffer from the high yen as American exporters had suffered from the low yen a year or two before. Finally, before we go too far in pointing out the beam in the Japanese eye we should examine the mote in our own eye. We cannot blame the Japanese for the huge U.S. federal budget deficit, nor can we blame them because they have outcompeted the United States in industries such as consumer electronics.

The critical question is whether the United States should punish Japan with protectionist legislation if it fails to take the actions we believe it should take to improve our trading posture. The answer is no. Since entering Congress over forty years ago I have been a
free-trader, but I base my argument here not on the evils of protectionism but on the realities of the balance of power in the world. Japan, like all nations, pursues policies it believes are in its national interest. Among allies and friends there are always disagreements over such policies. But unless the short-term disagreements are more important than the long-term relationship, punitive measures must be avoided. This is a simple lesson that protectionist politicians in the United States should learn once and for all.

Instead the American attitude toward Japan vacillates between friendliness when times are good to thinly veiled, occasionally ugly hostility when times are bad. Last year one senator called the Japanese “leeches,” while a congressman, angered at the Japanese for dumping low-price semiconductors on the American market, said, “God bless Harry Truman. He dropped two of them [atomic bombs]. He should have dropped four.” Such comments, while reprehensible, are not surprising from American politicians anxious to hold on to their jobs during a time when protectionist sentiment is running high. But a coequal partner like Japan, in a strategic alliance such as the West's, cannot at the same time be a convenient political punching bag every time the trade issue flares up. The Japanese notice the vicious tone of the trade debate in the Congress and inevitably wonder whether they can count on our friendship in other areas. We should note that last summer a book reached the Japanese bestseller lists entitled
Japan Is Not Bad, America Is Bad.
Another popular book,
Japan in Danger,
argued that the United States was making Japan a scapegoat for its own economic problems.