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Another
Look at Japan: Enlightened Capitalism By Misha Goussev, January 2010 Previously published
in The Wharton Journal and referenced
by Business Exchange |
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As the world is entering a new phase of
globalization marked by virtually unlimited technological possibilities on
the one hand and by very tangible problems of global warming, terrorism and
financial uncertainty on the other, the need for new models of society, our
relationship with nature and co-existence between countries is becoming more
and more obvious. While the West was leading the Industrial Revolution, the
East may be instrumental in helping us develop solutions to many challenges
that come with it. This article invites readers to take
another look at Japan, the country full contrasts and paradoxes, in search of
inspiration and possible answers. Japan, in my view, is a unique example of a
highly industrialized democratic (!) society, which is able to maintain its
position as a leading economic power, while preserving its core cultural
principles and a true union with nature.
Perhaps it is one of the working examples of the sustainable
development models the West is moving towards- a form of Enlightened Capitalism. If
the 19th century was the age of the industrial revolution, the 20th
century was the age of technological breakthroughs, which forever changed the
dynamic of life and literally made science fiction become reality. While the
pace of the technological evolution in principle allows for the possibility
of colonization of the Moon (and perhaps even Mars), the question of
immediate importance is where we go next as the human race here on Earth? In
other words, what models of society and co-existence between countries will
work best in the 21st century? I
would like to invite you to take another look at Japan, the country full of
contrasts and paradoxes, in search of inspiration and possible answers.
Despite its small size in geographic terms, this tiny islands-based country
has become one of the world’s leading economic powers (third after the US and
China).[1]
Even though the Japanese economy has been in decline since the 1990s,
officially entering into a recession in 2008, one can’t help but be surprised
by the level of technological sophistication, advanced public infrastructure
and the overall vitality of the society upon visiting Japan. Even temporary
workers without a permanent home (read “unemployed” and “homeless”) have an
opportunity to sleep at a capsule hotel, once a symbol of Japan's prosperity
and built for the businessman who worked too late to catch the train or
stayed out drinking all night.[2]
Finally, despite its prominent status in the world, as both an economic power
and a cultural attraction, Japan remains surprisingly closed to the Western
influence and maintains its ancient roots and traditions in its DNA behind
the façade of modernity. My
experience with the Japanese lifestyle, customs, and worldview has a long
history and is multifaceted. In my early teens I remember being deeply
touched by a Russian writer, Vsevolod Ovchinnikov, who did a masterful job in
comparing and contrasting key cultural nuances of Japanese and British
culture in his book Sakura and Oak.
For instance, he explained, when placing a vase on a table, a Japanese would
instinctively place it asymmetrically, while Westerners would generally put
it in the center. This minor detail highlights an important aspect of the
Japanese national character, namely, to follow the natural order in
everything. And nature, as we know, does not tolerate symmetry. Like the
majority of teenagers around the world (or at least in Russia), I grew up
worshiping Japanese electronics as the manifestation of perfection of quality
of sound and image. In my later teens I began practicing karate and learned Japanese terminology for punches and blocks,
as well as stories about the life of “the father of modern karate” Gichin
Funakoshi.[3] Finally, after my third
year at university, I decided to spend my summer break near the Sea of Japan
as a member of a geological expedition to the Far East of Russia. Despite the
geographic proximity, Japan continued to remain a mysterious and abstract
land and culture for me. Fast
forward twenty years, and I found myself living in the United States, having
graduated from Wharton, and working on Wall Street in New York City. Despite
my immersion into the world of finance, my fascination with East Asia and
Japan in particular never lost its grip on me, but became even more
important. Since then, I’ve had several opportunities to visit Japan, every
time discovering something new and becoming more amazed by its delicate
culture and hard-working people. The
first impression is always powerful. One can’t help but be surprised by the
quality of the customer service and the overall public infrastructure
everywhere – not just in the major cities. Train conductors wearing white
gloves and bowing reception staff are not perks limited only to the
first-class passengers and five-star hotels, but a norm everywhere. Clean public bathrooms and spotless common areas
everywhere redefine the standards
of hygiene. Most importantly, an always
up-to-the-minute precise transportation system inspires a sense of awe and
provides a feeling of security and reliability – whether you are traveling by
plane, local metro, or by bus in a remote mountain region. Brief observation
and conversations with the locals reveal that the high standards are not the
results of the laws and regulations, which are of course vigorously enforced
too, but are upheld mostly based on the strong work ethic and commitment to
do the absolute best at one’s job. Japanese are known for being hard workers
and for putting in long hours, but it’s not quite obvious why. On my question
to one Japanese manager why he chooses to spend often up to sixteen hours a
day six days a week at his job he replied: “It is a Japanese thing – you will
not understand…” Japanese
are also known for their efficiency at recycling and taking great care of
their environment. This, perhaps, can be explained more easily with the
rationale that a country with the third largest economy in the world and with
severely limited natural resources due to its geography does not have a
choice but to recycle. This is certainly true but, again, the commitment to
recycling is not so much a result of the government laws and regulations,
which of course exist, but rather stems from the internal understanding of
its importance by ordinary Japanese citizens. If you have doubts about it,
consider how effective the anti-littering laws are in the United States and
especially in New York City. Finally,
the hard work and commitment to do best for the society pays off for Japanese
(or at least it used to). Most Japanese companies guarantee lifetime
employment for a substantial portion of the urban labor force, a benefit that
has now began to erode due to the dual pressure of globalization and domestic
geographic change. Nevertheless, Japanese enjoy one of the most
technologically advanced lifestyles and the highest life expectancy among the
developed countries, and third in the word (according to the CIA World Factbook).[4] Not
everything can be painted in rosy colors, as there would not be an upside
without a downside. On the flipside of Japanese advances in many areas and
the nation’s overall success is the need to conform to the customs and the
way of life. Compared to many Western countries, where individuality is taken
for granted due to the makeup of the fabric of the society consisting of
various ethnic groups and cultures, in Japan individuality is not a norm, but
rather an exception. A homogeneous people, Japanese seem to be living a very
communal life, and in many respects place the interests of the society above
their own individual interests – to put it in a very simplistic form. This
is rather a curious paradox considering Japan’s leading economic power and
the ease of access to the Western world (for example, many countries do not
require visas for Japanese citizens), including the United States’ influence
after WWII. A historical reference may provide some perspective on this. In
the period of 1603 to 1854, Japan was literally isolated from all foreign
influence by the Tokugawa shogunate (military dictatorship) in order to
secure its power. Perhaps it is during this period, as the West was entering
the Age of Enlightenment (as a precursor to the Industrial Revolution and
science), that Japan was developing and solidifying the inner core of its
culture before opening its doors to the West and the resulting modernization.
Perhaps
it is due to its conformist culture that Japan ranks rather low on the Life
Satisfaction scale[5] (#34)
and comes behind all Western countries. To be objective, I have done
additional research on how Japan ranks against other countries in a variety
of categories and I was rather disappointed – the numbers paint a picture
which is rather controversial: Apart from its high life expectancy, relatively good
health, low crime rate, and reasonable GDP per capita (far from exceptional,
though), Japan ranks well behind Western countries in all other fields, from
freedom, democracy and gender issues, to quality of accommodation, life
satisfaction and happiness. So, based on these numbers, can Japan be
considered a good place to live from the point of view of quality of life?
Worldwide, yes, but comparing to almost any Western countries certainly not.[6] Despite this sobering summary, we have to consider
this information in the context of the opening question of this essay: What
models of society and coexistence between countries will work best in the 21st
century? In the short-term the Western model, which is largely based on the
assumption of unlimited resources and unceasing economic growth, certainly
produces the return we all benefit from. The big question, however, we have
to ask ourselves is whether these returns are going to last and whether these
assumptions are going to hold true indefinitely. The current wealth creation
machine must be fueled by unceasing (and ever increasing!) consumption on the
one hand and by the availability of low-cost production facilities (like the
ones offered now by China and India) on the other. Neither is a likely scenario in the long
run. Absolute growth is a fantasy – whatever comes up must eventually come
down based on the laws of physics. What we call “progress” today is
generating an equally powerful and offsetting force we will have to deal with
as humanity as a whole in the not very distant future. Many minds are trying
to foresee what this future may be. One such scenario has been brilliantly
painted in the recent movie Avatar,
showing humans as colonizers of a remote planet in search of profit and
material resources, as our own planet was no longer able to provide for us in
the 22nd century. In his book Powerdown:
Options and Actions for a Post-Carbon World, Richard Heinberg presents
and explores four main scenarios for how our civilization may develop once
the lack of resources becomes imminent as a result of continuous growth and
industrial expansion: Last One
Standing: The Way of War and Competition, Powerdown: The Path of
Self-Limitation, Waiting for the Magic Elixir: False Hopes, Wishful Thinking
and Denial and Building Lifeboats:
The Path of Community. I will leave it up to the reader to decide whether
this list is comprehensive, but I would make an argument that the playbooks
for all four scenarios are already being written and tested today. As
I am personally a believer in the superiority of the capitalist democratic
system over others (despite some serious side effects), I see hope in the
emergence of the so-called Enlightened
Capitalism scenario as the next phase of the evolution of society, where external competition (and greed being
an extreme form of it) must be coupled with an internal sense of responsibility for one’s actions and the
realization that the individual freedoms we all enjoy must also be unified
with the collective consciousness and Mother Nature. What does this have to do with Japan? As we experience difficulties due to the constraints of resources, pollution, overpopulation, wars and other problems, we may be forced to surrender our individuality (at least parts of it) for the sake of higher principles in order to survive. This has already been evident based on reactions to recent cataclysms such as the threats of global terrorism and the financial crisis. In both cases, as a result of retaliation, we have lost some of our individual freedoms for the sake of security and stability. As we continue to face global challenges and threats, new models may be required to help us deal with them. While the West was leading the Industrial Revolution, the East may be instrumental in helping us develop solutions to many challenges that come with it. Japan, in my view, is a unique example of a highly industrialized democratic (!) society, which is able to maintain its position as a leading economic power, while preserving its core cultural principles and a true union with nature. In the event, if the future of human kind comes down to choosing one of the four scenarios presented by Heinberg, I would make an argument that Japan is better positioned among the developed countries to adapt the path of self limitation and/or the path of community, as these principles are already deeply embedded in its cultural psyche and way of living. I also believe that Japan is a working example (or the closest approximation) of the Enlightened Capitalism model, and allows us to have a glimpse of one of the futures the world will face in the 21st century. • |
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