Japan As Number One: Lessons for America [ペーパーバック]

I have just finished Ezra Vogel's Japan as Number One and I found it a surprisingly good book. I say surprisingly good because I had some preconceived notions about the book without having even read it. I thought that it was full of cliches, that it was too positive about Japan and that it ignored the bad aspects of Japanese economy and society, that it wasn't based on serious research and that one could only learn distorted lessons from it.

And in a way all these criticisms proved to be true: the cliches in the book are those generalizations that Japanese love to repeat about themselves, especially in the presence of foreigners; painting a rosy picture was all too natural for a country that had experienced more than two decades of unprecedented growth and overcome the first oil shock; most of the structural weaknesses of the Japanese economy were not already visible (although the book does pinpoint social weaknesses), Western scholars who had studied contemporary Japan were only a handful, and the knowledge base was very thin; and the book proved too pessimistic in its depiction of American ills that it thought could be cured by drawing lessons from the Japanese model.

So what makes it a good book? First, one has to consider the date when it was published: 1979. At that time, an academic pretending that Japan was a number one nation may only have invited incredulity and bewilderment. Americans knew very little about Japan or, if they did, were mostly attracted to the traditional aspects of its culture and national character. But here was a book that was telling the general public that "Japan has dealt more successfully with more of the basic problems of postindustrial society than any other country", and that "Japanese success had less to do with traditional character traits than with specific organizational structures, policy programs, and conscious planning" that America would do well to imitate. One can barely imagine how new and provocative these statements were at that time. But the book came to define the zeitgeist of the following decade, when learning from Japan was all the rage.

Second, at a time when little was known about Japan, the book gathered an impressive array of knowledge spanning all aspects of Japanese economy and society. This knowledge formed the conventional wisdom about Japan that was to be echoed and amplified in numerous publications, seminars, and everyday conversations. Most of this conventional wisdom is no longer true, and some wasn't even accurate at the time the book was published, but these generalizations inherited from the past still influence the beliefs that foreigners entertain about Japan or the image that Japanese hold about themselves. People who specialize in contemporary Japan will only ignore them at their peril.

Third, although the lessons for America that Vogel identified some thirty years ago may no longer hold, the idea that Japan has lessons for other countries is still as true today as when it was first formulated. The reasons listed by the author are as follows. For one, Japan, unlike Western countries, has consciously examined and restructured all traditional institutions on the basis of rational considerations and offers the best example of intelligent design in modern societies. A second reason why Japan is a useful mirror is that of all the industrialized democratic countries, Japan, as the only non-Western one, is the most distinctive, and thus offers must sought-after variance that allows the testing of hypotheses and the validation of theories. Third, circumstance has forced Japan to pioneer in confronting problems that other developed countries later experienced with a time lag. If only by its failures and challenges, Japan still holds lessons for America and other Western countries.

This was the book that launched a thousand other efforts in the "Japan Hyping" that marked the Bubble Economy of the 1980s. The very same qualities that Vogel pointed out as key to Japan's success, and thoroughly worthy of emulation, are now attributed as being the cause of the country's post-bubble stagnation, and it is laughable to think that the Japanese edition of this book was an all-time bestseller on the country's non-fiction list. Who still advocates taking lessons from Japan on education, finance or corporate governance today?

Ezra Vogel deserves a place of honor alongside Paul Ehrlich and other would-be prophets of the future whose prophecies ended up being egregiously far off the mark. His book should
be read, if at all, as a caution against buying into journalistic hype, a problem those susceptible to today's China-boosting would do well to take heed of; the future is rarely a straightforward extrapolation of the past.

Ezra Vogel is a Harvard educated and based scholar on the Far East. He has published 10 or so books on the area, including ones on China, Korea, and "the four tigers." In 1979, when this work was published, it advanced the controversial thesis that America had already been eclipsed economically. Japan's success was primarily attributed to the flexibility and willingness of their governing institutions to do what worked, shorn of ideological considerations. And, they had an "industrial policy," with the government picking and supporting likely "winners," and closing down the "losers."

There is an old adage on Wall Street that when a company makes the cover of a popular news magazine, touted as a success, then it is time to sell it short. All the good news has been "fully discounted." Vogel's book was a bit too "cutting edge" to merit the same fate. Japan continued to flourish, as he indicated, for another entire decade, before its ludicrous real estate "house of cards" collapsed in 1989 (as one indicator, the land under the Imperial Palace in Tokyo was valued at more than all the land in California). Hum, real estate "games" does have a familiar ring.

Vogel is knowledgeable. He had been visiting Japan annually, for extended periods, for two decades prior to this work's publication. His first chapter is entitled the Japanese "miracle" and recounts how it quickly recovered from the utter devastation of World War II. In part, the "clean slate" allowed them to have a fresh look, and actually make changes in the way their society was organized, with very real poverty being a constant goad to pragmatism. He says that if there is a single factor that explains their success, it is a group-directed quest for knowledge. Although it has a strange ring to American ears, the phrase "dedicated government bureaucrat," specifically and in particular, those who worked at M.I.T.I. (Ministry of International Trade and Industry) and who ran their "industrial policy" were also an essential component to Japan's success. Vogel devotes chapters to their political institutions and practices (hint: they were no dysfunctional deadlocks), to their large companies that were promoted to be global competitors, as well as chapters on their basic education, crime control and welfare, key societal components whose smooth functioning supported their economic efforts.

A few of the key observations that I noted: Japanese society was far more equalitarian than America's in 1970, with an income ratio of 4.3 between the highest and lowest quintile in Japan compared to 7.1 in the USA( and that was 1970, long before the aggrandizement of the 1%); Japan had 10,000 lawyers compared to 340,000 in the USA; and perhaps most importantly, in the USA, "we have supported egoism and self-interest and have damaged group or common interests" (the Ayn Rand syndrome?)

Vogel was no Pollyanna; he identified the problems, but he was not prescient enough to predict the factors that would led to Japan's stagnation over the last two decades, and even suggest that China might eclipse Japan in turn. I do note his recent book, published in 2011, Deng Xiaoping and the Transformation of China might provide some insights. Overall, a solid achievement, that is now somewhat dated. 4-stars.