Sunday, January 18, 2009

The LDP and the DPJ face the future

The LDP and the DPJ had their annual conventions in Tokyo over the weekend, steeling their resolve for the Diet session already underway and the general election that will occur within the year.

For the second straight year, the incumbent LDP president and prime minister told the party faithful that the "responsible governing party" (how the LDP now refers to itself) faces the worst crisis it has ever faced — at the same time that Japan confronts (to use what has now become a mantra from Aso Taro and his cabinet ministers) "the worst economic crisis in one hundred years, which has emanated from America." Mr. Aso told the convention that "only the LDP" can overcome the economic crisis, which would presumably be enough to save the party from what looks like certain electoral defeat later this year. (Interestingly, Hosoda Hiroyuki, LDP secretary-general, has criticized Mr. Aso's frequent use of this exculpatory expression because it is too negative, arguing that it dampens consumer confidence and undermines the government's own policies. And here I thought the problem was that by using this expression Mr. Aso was more or less ignoring discussing the crisis and therefore ignoring a serious effort to diagnose its cause and offer an appropriate and effective response...)

On that note, Mr. Aso used his address to repeat his pledge that Japan will be the first to escape the crisis and once again express his belief in the ability of the Japanese people to overcome any challenge. He also made sure to note that the nejire kokkai (read: DPJ obstructionism) is to blame for any lack of progress in moving the government's agenda in recent years.

None of this was particularly new or particularly inspiring; the 2009 LDP convention may be about as exciting a party as the 2009 World Economic Forum, another gathering that Mr. Aso may address.

The mood at the DPJ convention, held at a former postal meeting hall in Tokyo's Minato ward (as opposed to the luxury hotel that hosted the LDP gathering), was different, and not only because of the relatively spare meeting hall, a reflection of the party's need to conserve funds for the general election campaign. If Mr. Aso's speech had a pugnaciousness reflecting his party's and government's dire circumstances, Mr. Ozawa's was characterized by what looks like an attempt to strike an Obamanian note, full of talk of building a new Japan. In fact, Mr. Ozawa's leitmotif appears to have been borrowed from Abraham Lincoln's Gettysburg Address: he declared that the DPJ's fundamental purpose is a "politics of the people, by the people, and for the people," and then offered policies to create an economy "of human beings, by human beings, and for human beings" (contrasted with "a market economy of capital, by capital, and for capital") and finally a society "of citizens, by citizens, and for citizens." Rhetorically, this construction is clumsy and actually cheapens the phrase.

Meanwhile, does Mr. Ozawa have to copy Shii Kazuo and the JCP? I am sympathetic to his point about building a safety net and counteracting the "dehumanization" caused by capitalism — score one for Karl Polanyi — but Mr. Ozawa would do well not to get too carried away in the anti-capitalist rhetoric sweeping the Japanese political system.

This election year is turning into a fight over who can be the most energetic in criticizing "market fundamentalism;" even the LDP's reformists, the vanguard of the Koizumi revolution, have shifted their emphasis from pushing for economic deregulation to attacking the bureaucracy and fighting the consumption tax. But sooner or later, one party or another will have to govern, at which point it will discover that the market is still there — and that the Japan will have to find a way to be more competitive while providing an appropriate and politically desired level of social assistance. I recognize that in criticizing "market fundamentalism" Japanese politicians are specifically criticizing neo-liberalism and the ideology that fueled the US financial crisis, but at times their rhetoric strays into more radical terrain. There needs to be less focus on pointing fingers and assigning labels and more focus on providing answers to the questions of how Japan can provide greater opportunity for its citizens and greater protection for the aged and infirm — in particular, how it can pay for it. My hunch is that the Japanese people are more interested in these answers than in learning who among their leaders are card-carrying members of the neo-liberal party.

In the latter half of the speech, Mr. Ozawa does turn his attention to these matters. He calls for two New Deals, an "environmental" New Deal and a "safety" New Deal. The former basically appends to the party's standing promise of subsidies for farmers a pledge to promote the "greenification" of rural Japan through the widespread use of solar panels and the "greening" of roofs and walls of homes and offices. The latter calls for making schools and hospitals earthquake-resistant, basically an overt pledge of support to small- and medium-sized enterprises that would benefit from these contracts. As Mr. Ozawa said himself, the goal is to promote job creation in rural Japan.

All in all, Mr. Ozawa's proposals are less ambitious than his rhetoric would suggest. And there's still no indication of how a DPJ government will pay for the two new deals. Once again, Mr. Ozawa has borrowed a phrase from American political history only to drain it off its evocative power. The New Deal was an ambitious experiment in American governance; it is still unclear how a DPJ government will be a dramatic departure from the past, other than the fact of its existence.

That's not to say it's impossible for a DPJ government to break decisively with the status quo, but for now the DPJ has a lot of work to do to determine precisely how it intends not just to jump start the Japanese economy, but to put it on a more viable footing. As an article by Waseda's Noguchi Yukio in Shukan Diamond argues, the decimation of the past several months may mark nothing short of the end of Japan as "skilled manufacturing, exporting nation."

While time will tell whether this is hyperbolic, the DPJ ought to have a better answer to this transformation than two feeble "new deals."


Adamu said...

Oh man, thanks for posting that link to the new Noguchi Yukio column! I am reading the book version of his previous column ("The Wartime System is Still Not Ended") and was wondering when he would weigh in on the financial crisis.

Anonymous said...

"...the past several months may mark nothing short of the end of Japan as "skilled manufacturing, exporting nation..."

I think this is very prophetic.

Margret Thatcher the then UK Prime Minister recognised the same thing some 25 years ago..when heavy and industrial work was slowly being placed more and more over seas namely in in Asia. She attempted to realign the economy to face the new "high-tech" era that was slowly emerging and dispense with the heavy industries as future dinosaurs. Whether one agrees with her tactics or results one cannot argue with her prophetic foresight.

The above phrase, may too be a defining moment in Japan.

Siegfried Knittel said...

UK industry was not competetiv after 2.World War. As an example. British car were very poor in quality. Nobody in Europe bought British cars. So the car industry declined. Japanese car industry is competetiv and very innovativ. So after this crisis the Japanese car industry will be competetiv again. UK changed from manufacturing to financial industry. Thats not a way Japan can go. Japan is like Germany strong in manufacturin and should not change this.

Siegfried Knittel

Noah said...

Re: Anon's comment...

Does the "end of Japan as a skilled manufacturing exporting nation" mean that Japan will remain prosperous while becoming less structurally dependent on manufacturing and exporting? If so, that might not be a bad thing in the long run. And the "decimation" Japan is currently experiencing is probably a sign that it persisted for too long in trying to be a "manufacturing exporting nation".

It is my belief that a mature economy will do a bit of everything, and do everything well. The dogma of "manufacture more, export more" just isn't that useful for a rich country.

Anonymous said...


From my first comment you picked up. I too concur with your assesment.