The impact of the financial crisis reverberates to this day, and that drives a huge proportion of the issues, but the crisis in my opinion was inevitable. From my perspective, the Post-War Economic Miracle, as it’s called, catapulted Japan through all the stages of economic development into an almost accelerated version of the same problems that are afflicting the U.S. and other Western countries.
The dream of infinite growth in the Japanese context fell flat for the same reasons it is falling apart in other developed countries. A rise in standard of living and wages led to offshoring and outsourcing of production, the hollowing out of the middle class, a work culture at odds with family life, and so on. The country’s land and businesses were valued in the late 1980s as though it could remain competitive internationally with a mostly domestic supply chain, even as the production costs of its goods continued to rise along with the needs of its population, which in a globalized economy turned out to be a pipe dream.
We see the same thing in the U.S., where every president promises to restore the American manufacturing base, then comes up against the reality that U.S.-produced products made by U.S. workers paid U.S. wages cannot be competitive with something built in Southeast Asia and shipped overseas for less than $100 per ton. But the conservatism of Japanese society certainly plays a role, in that the country is highly resistant to change, and also due to a rigidity that stifles innovation, making it hard to start new businesses outside the keiretsu/conglomerate structure. The U.S. has somewhat mitigated its manufacturing decline through the creation of new service sector and especially tech businesses that operate internationally, which path is less available to Japan due to the rigidity of its business structure.
But the part I disagree with is the idea that Japan has rejected industrial society. Japan is still extremely proud of its culture and the impact it’s had globally. They love that people in western countries eat ramen and sushi, play Nintendo games or watch anime, and they have a deep reverence for their globally successful businesses and particularly the auto industry. They have no desire to reject or withdraw from industrial society, they just haven’t been able to figure out amidst external economic barriers, and internal cultural and financial barriers, how to move forward.