Awasu » Special locks for our doors, jails for the people who break them
Monday 24th August 2009 10:52 AM [General]

A fascinating article on New Matilda today discussing how inefficient Japan's economy is.

And then there is the routine experience of what appears to be over-staffing. One person opens the shop door, another person assists in distributing trays, another takes your money and operates the cash register, and yet another deposits your items into a bag and wraps it.

There are old guys everywhere whose job it is to stand on the footpath next to a car park entrance and wave red flags around to "warn" pedestrians when a car is emerging.

But they also raise the key issue:

[W]hether something is inefficient or not depends on what you think its function is.

Many moons ago, I wrote a post about what I see as a key difference between how the Japanese think and operate to us in the West and this article explores more of these differences.

In Japan, relatively few politicians have been captured by neoliberal values - perhaps because there is very broad acceptance of the value of economic equality and social harmony. This co-exists with a resilient cultural heritage of hierarchical "groupiness". Schools, universities, neighbourhoods and workplaces are permeated with personal relationships of mutual obligation (usually of a rather unequal mentor-apprentice type). Within these various groups everyone has their place on the junior-senior scale, and a stake in the social order. Most Japanese are quite aware of this distinctive feature of their society, and whatever frustrations they may have with it, the US-style neoliberal society is not an attractive option to most.
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Japan has chosen, consciously or unconsciously, to make a trade-off at the expense of maximising GDP growth, higher shareholder returns and career-choice for individuals in favour of social harmony. And, indeed, why not? To see the benefits, compare the carefree experience of walking through the centre of Tokyo late on a Saturday night with a similar walk through Sydney, Melbourne, Brisbane or Perth, with their crime, aggression and social dysfunction.

I've long argued that we tend to value and aspire to that which we can measure and GDP and economic well-being is no exception. What would the world be like if we tracked a Gross National Happiness [1] index instead of widgets and industrial capacity?

Forty-one years, Robert F. Kennedy gave a speech that captured this sentiment:

We will find neither national purpose nor personal satisfaction in a mere continuation of economic progress, in an endless amassing of worldly goods. We cannot measure national spirit by the Dow Jones Average, nor national achievement by the Gross National Product. For the Gross National Product includes air pollution, and ambulances to clear our highways from carnage. It counts special locks for our doors and jails for the people who break them. The Gross National Product includes the destruction of the redwoods and the death of Lake Superior. It grows with the production of napalm and missles and nuclear warheads.... It includes... the broadcasting of television programs which glorify violence to sell goods to our children. "And if the Gross National Product includes all this, there is much that it does not comprehend. It does not allow for the health of our families, the quality of their education, or the joy of their play. It is indifferent to the decency of our factories and the safety of our streets alike. It does not include the beauty of our poetry, or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials... the Gross National Product measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country. It measures everything, in short, except that which makes life worthwhile, and it can tell us everything about America -- except whether we are proud to be Americans.

Watching ourselves waste incomprehensible amounts of money trying to "fix" the current financial crisis, with the sole aim of returning us to some notional place of economic "prosperity" where we can get back to the business of flipping houses and selling each other bad debt, how can one do anything but weep? 😥

[1]I just made this phrase up but it looks like the King of Bhutan beat me to it 😐

2 Responses to this post

The US government just ran a "Cash for Clunkers" program which gave people $4,500 towards the purchase of a new fuel efficient car if they trade in their old fuel-wasting car. The traded-in cars cannot be resold; they must be destroyed; however the car dealers are still selling the brand new versions of those same fuel-wasting cars.

This was primarily to give a boost to the economy, but it had a thin environmental veil draped over it. If the US government really wanted to help the environment they would add a $4,500 fee on the sale of all fuel-wasting cars, but that wouldn't help stimulate car sales would it? I'm sure as soon as the "Cash for Clunkers" program ends, new car sales will plummet so its economic effect will be temporary.

Although, there may be some of the recipients of the "Cash for Clunkers" $4,500 that are going to take their new cars and flip them in order to buy a newer version of the (gas-guzzling) car that they really wanted in the first place.

Yah, it's form over substance but even worse, we're trying to stimulate behaviour that got us into this mess in the first place. I see you Americans have a $8000 tax credit when buying a house but here in Oz, you can get up to almost USD $25,000 (!), (depending on circumstances, typically it's around $5-15k), which is obviously massively distorting the market.

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