Chapter One
The Politics of Complacency
Continuity and Change
In the late summer of 1993, the Liberal Democratic Party, Japanâs governing party for thirty-eight years, suddenly found itself in the unfamiliar position of being in the political opposition. Power fell into the hands of a coalition that included every other party in the Diet, Japanâs parliament, save the Communists. The toppling of the LDP from power seemed to offer new prospects for change. There was a charismatic leader in the person of Morihiro Hosokawa as the nationâs prime minister and a palpable sense of excitement in the country as Japan seemed ready to turn to a new page in its political history.
The coalition collapsed in less than a year. The LDP returned to power in an alliance with the Japan Socialist Party and Sakigake, a small splinter party of former LDP members. The Socialist Partyâs chairman, Tomiichi Murayama, became prime minister. He remained prime minister for a year and a half, when the LDPâs Ryutaro Hashimoto succeeded him as head of the LDP-JSP-Sakigake coalition government. The Socialists and Sakigake suffered devastating losses in lower-house elections in October 1996. They remained allies of the LDP, but withdrew from the cabinet. The LDP formed a single-party cabinet for the first time in more than three years.
In the course of these changes, parties opposed to the LDP, recently hailed as harbingers of a new politics in Japan, fragmented, reorganized, split, and merged again. It was virtually impossible to keep track of changing party names and party affiliations of Diet members. During a visit to Tokyo in April 1998, I was struck by the number of Diet members I met who had stopped indicating their party affiliation on their name cards. Some had changed parties five times in five yearsâfor example from the LDP to the ShinseitĆ (Japan Renewal Party) to the ShinshintĆ (New Frontier Party) to the MinshutĆ (rendered in English as Good-Governance Party) to the MinshutĆ (Democratic Party). No doubt they had tired of printing new cards each time they changed their party label. More important, except for the LDP and the Communist Party, the only two parties keeping their names, party labels became virtually meaningless to the electorate.
The LDPâs loss of power in 1993 was widely portrayed at the time as representing a dramatic rupture in Japanese politics. Overnight the party that for nearly four decades had monopolized political power at the national level was out of office. It was as though a great earthquake had shaken Japanâs political world and had turned everything upside down. Stability had given way to uncertainty; predictability had been replaced by an unprecedented (at least in the living memories of most Japanese) volatility in political alignments. Hosokawaâs coalition government seemed the immediate product of a sharp discontinuity in Japanese political history.
And yet, the political events in 1993 were not an abrupt break in Japanâs political development. There was more continuity than met the eye. The collapse of LDP power was not caused by a sudden shift in Japanese votersâ attitudes or in patterns of political support of powerful interest groups. It neither was preceded by nor did it precipitate social instability. Change in party power was accompanied by continuity in public policy.
When the LDP returned to power a year later, some observers concluded that nothing of lasting political importance had changed. After all, they argued, LDP Diet members remained bound to the special interests that had funded them in the past, and policy was once again in the hands of unelected bureaucrats.
LDP leaders themselves seemed to believe that they had got Japan back on its former political track. One by one, Diet members who had left the LDP to join one or another of the opposition parties began to return. In September 1997, these returnees made it possible for the LDP to recover the lower-house majority it had lost in 1993. With the opposition divided and seemingly unable to articulate a program the public found attractive, LDP leaders seemed confident that Japan had returned to a familiar systemâa system in which the LDP was the natural party of government and the divided opposition was unable to convince the public it offered a credible alternative.
But the LDPâs optimism was misplaced. Although it had regained power in 1994, the LDP could not put Japanese politics back on the same political track it had followed before Hosokawa became prime minister. The LDPâs loss of control of the government to a seven-party coalition in the summer of 1993 was indeed the end of an era. The dynamics and the logic of the political system would be different in the future from what they were during the period of the so-called â55 system, the long era of LDP dominance that began in 1955 when the conservative parties came together to form the LDP and the right and left wings of the Socialist Party (which had formed separate parties in 1951) reunited.
In July 1998, the LDPâs eyes were opened to Japanâs new political realities. It had gone into a campaign for an upper-house election to be held that month, anticipating that it might win the sixty-eight seats needed to recover a majority that it had lost in 1989. If it succeeded, it would no longer need alliances with opposition parties in the upper house to pass legislation. Its recovery would be complete.
The election (discussed in greater detail in chapter 6) was a disaster for the LDP. The voting rate was fourteen points higher than in the previous upper-house election. Voters who had abstained before turned out to cast votes against the LDP. Instead of winning a majority, or obtaining the sixty-one seats that would have kept the LDP at its pre-election strength in the upper house, it won only forty-four seats. It was the LDPâs worst performance ever in an upper-house election.
Prime Minister Hashimoto immediately resigned. The new LDP government of Prime Minister Obuchi seemed painfully aware that the public was now truly frightened by Japanâs economic and financial problems, and furious with the LDP for failing to take adequate steps to deal with them. Obuchi brought former Prime Minister Miyazawa into the cabinet to be minister of finance, to spearhead a new effort to solve Japanâs banking crisis and get the economy growing. This was the first time a former prime minister had returned to serve in another prime ministerâs cabinet since before the Second World War.1 Suddenly the LDP was on the defensive, and the opposition parties were looking forward to a lower-house election, hoping to defeat the LDP there as well. Japanâs political future was more uncertain than ever.
There are many dimensions to an explanation of why Japan found itself in this economic predicament and at this political impasse. This chapter tells the story of one of them. It is a story of how Japanâs success in accomplishing its postwar goal of rapid economic development produced attitudes and political interests that sustained a politics of complacency through most of the 1990s. Precisely at a time when Japan needed policy change, its politics produced a consensus in favor of the status quo.
That consensus did not begin to unravel until near the end of the decade, making problems that might have been handled with relative ease if they had been confronted earlier all that more difficult and painful to solve. Throughout the 1990s, the public mood was cautious about change. There seemed to be a strong feeling that a period of fiscal austerity and low growth was the inevitable price to be paid for the excesses of the bubble economy. It was not until late in the 1990s, when it was no longer possible to deny that Japanâs financial system was tottering on the brink of disaster and when all indicators made it painfully clear the economic situation was becoming worse rather than better, that this mood began to change. Government policy was no longer seen as squeezing excess out of the bubble but as squeezing life out of the economy.
Even then, there was a palpable resistance to fundamental structural change. There was, and there remains today, an ambivalence in the Japanese public mood. Most people are satisfied with their present circumstances, as we shall show later in this chapter, and averse to taking risks. But satisfaction with the present is combined with anxiety about the future. People wish things to remain as they are, and at the same time fear for the future if things do not change. The public mood is inherently contradictory: it favors change to the extent it helps retain the status quo. This chapter offers an interpretation of how politics evolved to create this situation.
The Progressive Challenge
The LDPâs return to government in alliance with the Japan Socialist Party in 1994 spelled the definitive end to an era in which political competition pitted conservatives against progressives. This conservative-versus-progressive division was the defining feature of the â55 system. In 1960, Edwin O. Reischauer, then a professor of Japanese history and politics at Harvard University, published an article in Foreign Affairs entitled âThe Broken Dialogue with Japan.â The dialogue that Reischauer had in mind was not with the leaders in the LDP who held political power, but with the Socialists, intellectuals, college students, and public figures who were opposed to the LDP. These were âthe would-be ideological pathfinders and the generation to which the future Japan belongs,â Reischauer wrote, and their anti-Treaty actions were âa sign of a huge current of discontent with Japanese societyâa frustration with present trends and a strong sense of alienation.â2
The reason why the United States needed a dialogue with these anti-LDP elements, and presumably one reason why President Kennedy chose Reischauer to be the U.S. Ambassador to Japan, was that their voices were going to grow increasingly important in Japanese political life. âThere is little prospect that their views will prevail in Japanese politics in the immediate future,â Reischauer wrote, âbut their victory at some future date seems not just possible but probable.â3 The Socialists and the Democratic Socialists âhave a capacity for growthâ and they âmay prove to be the political wave of the future.â4
The late 1950s and the 1960s were years of intense, bitter, sometimes violent ideological conflict in Japan. The sociologist Herbert Passin, surveying Japanâs protest movements in 1962, opined that âthis quality of all-out, uncompromising struggle is the most disturbing feature of the political climate of Japan today.â5 Japan was divided into two political camps advocating antithetical policies and ideologies. The LDP was committed to overturning the constitutional order imposed by the American Occupation. Its platform called for a sweeping revision of the constitution and it pressed vigorously if mostly unsuccessfully in the early postwar years to undo reforms sponsored by the American Occupation and to reintroduce features of the prewar political system. These efforts reached a peak in 1958 when Prime Minister Kishi attempted to expand powers of the police that had been curtailed by Occupation reforms. This provoked strikes and workshop rallies by some four million workers, protests from the press, and a Socialist boycott of the Diet. These activities amounted to the largest protest in postwar Japan up to that point and served as a âdress rehearsalâ for antiâSecurity Treaty protests that would soon follow.6
As the LDP tried to push the political system back into more familiar and comfortable institutional and ideological patterns of the prewar period, the Socialists tried equally hard to pull it in the opposite direction. Marxism was the dominant ideology in the party and among Japanese intellectuals and college students, and also in the leadership of Japanâs most powerful labor union federation as well. To be a college student in the 1960s in Japan was to be âprogressiveâ in terms that French or Korean students would immediately understand. Marxism and a radical leftist political culture dominated Japanese intellectual life. The leftist camp included not only a large, militant student movement (the zengakuren), but also powerful citizensâ movements against nuclear weapons and other mass movements linked to the Socialist or Communist parties.
Reischauer was not alone in believing that the progressives represented Japanâs future. Prevailing Japanese opinion was much the same. In 1963, one of the LDPâs then-popular young leaders published a much commented upon article in the journal ChĆ«Ć KĆron. In it he argued that current economic and social trends, by spreading higher education among the masses and forcing wide-ranging changes in the occupational structure, were weakening LDP bases of support and would bring the Socialists to power within the decade.7
The LDPâs support base was in the old middle classes of farmers, merchants, and the owners of, and workers in, family businesses and small manufacturing companies. The party was supported predominantly by middle-aged and older voters and by voters with relatively low educational levels. The Socialist Party was the party of choice for the modern sectors of Japanese society: organized blue-collar workers in Japanâs large enterprises, the rapidly growing white-collar âsalarymanâ class, intellectuals and college students whose numbers had mushroomed thanks to the American Occupationâs reform of Japanâs higher-education system, and more generally the young, the urban, and the well-educated.8 Given the rapid economic growth and concomitant social changes occurring in Japan, it seemed only a matter of time before power would shift from the tradition-bound conservatives to the modern progressive camp and change the face of Japanese politics.
The LDP Response
Predictions of the LDPâs imminent demise proved premature. The LDPâs determination to hold onto political power caused it to retreat from its revanchist program. It became a party committed to a policy of making cautious, incremental adjustments in the status quo as necessary to retain power. There were ideologues in the party to be sure, but the party leadership was not about to let ideology stand in the way of retaining control of the government. By the end of the 1970s, the LDP had successfully transformed itself from a traditional conservative party into a modern catchall party. It drew more support from all social strata than any other party, including industrial workers, who up until the early 1970s had supported the Socialists over the LDP.9
Partly because the society was so deeply divided over other issues, the LDP put great emphasis on the unifying themes of economic recovery, rapid industrial growth, and what amounted to a virtual ideology of âGNPism.â The energies of this ideologically bifurcated society were mobilized in a most impressive manner to pursue a goal with which nearly everyone could agree: the century-long quest to âcatch up with and overtake the West.â As long as a consensus on the priority of growth prevailed, it provided guideposts to give direction to government policies and to measure the effectiveness of those policies.
The power of a consensus on growth to drive politics declined over time. It is not that Japanese no longer wanted their economy to be strong and to grow ever larger; rather, as double-digit growth rates sustained for more than a decade catapulted the Japanese economy into a new and higher orbit, it no longer was so evident what economic âsuccessâ meant, or what policies were most appropriate to attain it.
GNPism was an ideology that focused on aggregate national indicators of economic progress, on the gross national product. By the 1970s, however, Japanâs emergence as an economic power, as well as environmental damage created by rapid industrialization, drew the publicâs attention not just to measures of overall national economic performance but to indicators of affluence as well. Arguments that affluence meant improved welfare services, ...