Dogs and Demons

How on earth did Japan get itself into such trouble? Iida Hideo, a finance lawyer, describes what he calls the Boiled Frog syndrome: «If you drop a frog into a pot of boiling water, he will jump out immediately and be saved. If you put him in warm water, he feels comfortable and does not notice when you slowly raise the temperature.» Before the frog knows what is happening, it's cooked.

The Boiled Frog syndrome is what comes of failing to change as the world changes. Techniques such as tobashi keep the water lukewarm, hiding disastrous mistakes. The policy of shoring up insolvent firms and wasteful government agencies at public expense creates no incentive for those in charge to rethink their mistakes. Meanwhile, the government croons the public to sleep with reassuring lullabies about Japan's unique form of government by bureaucracy, and its superiority over the degenerate West, exemplified by Sakakibara Eisuke's book Japanese-Style Capitalism as a Civilization.

Death at a slow boil is also behind the sad condition of Japan's rivers, mountains, and seashores, as well as the landscapes of towns and cities. Ill-pla

Radical change will come only when conditions have grown completely intolerable, and in Japan's case that day may never come. To put Japan's financial troubles into context, we must remember that it remains one of the wealthiest countries in the world; the bankrupt banks and deflated stock market are not going to deprive most people of their television sets, refrigerators, and cars. From this point of view, Japan remains a reasonably comfortable place to live.

In using the word «comfortable,» I would never suggest that Europeans, Americans, or most middle-class Southeast Asians envy such a lifestyle. For the Japanese, cramped low-quality housing, lack of time for private life, and a degraded environment in cities and countryside are so all-pervasive that most citizens can hardly imagine an alternative. Goals set in the 1950s and 1960s – to own television sets, toasters, and cars – froze to where even now they define the limits of Japanese modernism. As long as people get to keep their toasters, very few will complain if it becomes a little harder to buy a house, or their companies make more severe demands on their time, or their surroundings get a little uglier. Such things seem such a normal, even predestined and unavoidable part of life that it is hardly worth thinking about. Japan has trained its population to believe in the old military virtues of hard work and endurance. Hence people will bear hardships without necessarily asking how they might avoid or decrease them, especially if the hardships are quiet in the coming.

The best word to describe Japan's modern plight is Chuto Hanpa, which means «neither this nor that» – in other words, mediocrity. Stu

Part of the undertow against change is Japan's dream of becoming the leader of Southeast Asia. The old desire for empire, previously called «the Greater East Asian Co-Prosperity Sphere,» never completely faded, and in recent years it is enjoying new life. Japan is pouring huge amounts of industrial capital, ODA funds, monetary loans, and cultural grants into Southeast Asian nations in the hope of integrating Thailand, Malaysia, Indonesia, and other nations into a new Asian bloc, with Japan at the helm. The dream is that Southeast Asia will join hands with Japan and act as a new engine for industrial growth; Japan will then take center stage once again, and all the old policies will be vindicated. Typical of the group of theorists beating the drum for a new co-prosperity sphere is Professor Shiraishi Takashi of Kyoto University's Centre for Southeast Asian Studies, who argues that Southeast Asia at the dawn of the new century must now «choose» between the United States and Japan for its model and controlling partner. The choice, of course, should be Japan. Shiraishi represents a strong body of academic and official opinion that is angry at foreign criticism of Japan, especially what Shiraishi calls «stereotypical Anglo-American triumphalist statements that both the Japanese model and developmental authoritarianism are now bankrupt.» He longs for the old days when Japan produced an economic miracle without having to update or rationalize its internal systems. «Free-market ideas of legal contracts, impartial regulations, and transparency are all fine, and perhaps these are all portfolio investors need,» he says with some bitterness. «But can we rely safely on markets for long-term investment for industrialization, technological development, and, above all, human-resources development?» Shiraishi's question – what to rely on? – touches on many of the questions raised in this book. The value of free markets is only one issue; there are numerous others, such as the role of bureaucracy and the importance of clear and correct information to the efficient ru