Lessons learned in Japan

OPINION:

TOKYO. — Don’t forget Japan In our single-minded focus on one crisis at a time, the American news media and we, their customers, tend to blot out everything going on in the world except for the one headline that dominates the news at any given time. Two weeks ago it was the threat of poisoning from Chinese imports. Then it was nasty words from and about the president of Iran. Then it was Myanmar. Maybe we ought to broaden our focus a bit and pay attention to the fact that we have multiple fish to fry.

Japan is a case in point. Not so long ago, when Americans worried about foreigners eating our lunch, it was the Japanese we worried about. Japanese exports destroyed American competitors making cameras, televisions, stereos, office copiers, power tools, etc. And — more than once — they have brought the American automobile industry to its knees.

But in the last decade, we have largely forgotten Japan. This is partly because Japanese wages have risen to almost the same level as ours, and because Japanese economic growth slowed for a while. It is partly because the Japanese have learned how to lull us into a false sense of security by, for example, building car factories in the United States. And it is largely because other countries, above all, China, have surged forward and are eating our lunch as well.

But Japan is moving again. Japanese manufacturing grew by 3.3 percent in 2006 and is continuing at about the same pace this year. In many ways they are much better positioned than we are to continue to grow.

For example, the Japanese save and invest, while we borrow and disinvest. The Japanese now invest about half again as much as we do in new plants and equipment. Their foreign direct investments in 2005 were more than double those of the United States (Incredibly, between 2004 and 2005, the latest year for which we have figures, U.S. foreign direct investments plummeted from $252 billion to $21.5 billion, while Japan’s rose from $30 billion to $45 billion.)

The U.S. imports about two-thirds of its petroleum but is largely self-sufficient in other fuels — notably coal and natural gas. Japan imports about 99 percent of its fuel. Japan also imports about 60 percent of its food and virtually all other raw materials. Yet, in 2006, Japan sold $174 billion more in goods and services overseas than it bought. We bought $900 billion more than we sold.

Ironically, the Japanese are in a better position than Americans to deal with soaring energy prices, because they spend 50 percent less on energy to generate a dollar’s worth of goods or services than we do. And with the coming crunch on greenhouse gas emissions, the advantage will swing even further in favor of the Japanese.

The Japanese economy is much more “sustainable” than ours given the energy and environmental problems we all face. It also is more sustainable politically and socially. The statistics are dramatic: In the United States, the poorest 10 percent of the population earn 1.8 percent of the income. The richest 10 percent earn 30.5 percent. In Japan, the poorest 10 percent earn 4.8 percent of the total. That means they get a 267 percent bigger piece of the pie than Americans in the same bracket, while the richest earn 21.7 percent.

The Central Intelligence Agency uses something called the “Gini Index” to compare distribution of income in different countries. In 2002, Japan scored a 38 on the index, comparable to many European countries, such as Italy and the Netherlands. The United States stood at 45, which means we had less equal distribution of income than any other industrial country — even worse than Russia with its Wild West economy.

In the United States, 12 percent of the population lives below the poverty line. In Japan, the number is statistically insignificant — well below 1 percent.

A very successful Japanese lawyer said Sept. 28, “We have the most successful socialist country on Earth.” But what kind of “socialism” is it when so many private companies are allowed to do so well? It’s perhaps the kind of socialism championed by the late Swedish Prime Minister, Olaf Palme, who championed “as much capitalism as possible, as much socialism as necessary.”

Forget the statistics. What do they mean for people living in Japan? Seen through American eyes, it’s another world. Japanese policemen don’t carry guns. They don’t have to, because there is no reason for them to fear the people. And the people have nothing to fear. Ride the subway in Tokyo, a metropolitan area of 35 million people. You will see little girls — 7 or 8 years old — dressed in impeccable school uniforms and riding the subway alone. In a society where parents are as fanatical as any on the planet about the well-being of their children, they are confident enough to send them out alone in the biggest city on Earth.

We can learn a lot from the Japanese.

George H. Lesser has reported for more than 30 years on international political and economic developments for both U.S. and European publications. He has been based in Washington, New York, London and Brussels, and lives in Washington and Florence, Italy.