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Family and Economy Ken Shimoda, 2001 faire system. In contrast, the American economy is strongly market-driven, and when economists see an over-reliance on market forces in the United States, they refer to it is a market failure. The electric-power crisis in California in 2000 offers a typ ical example. In the mid-90s, California set in motion a plan to deregulate the electric power industry in hopes of introducing competition, thereby reducing electricity prices and improving service quality. However, because of the immense cost of building power plants (and the risk of environmental challenges), few companies saw sufficient potential returns on the required investments to justify increasing electrical power supply. Consequently, demand for electricity came to outstrip supply and both power outages and price increases followed. The remedy for this market failure was government intervention: the state issued bonds to save existing companies from bankruptcy, while controlling prices to protect consumers. What bothers me about this dichotomy between market and state is the assumption among economists that it applies universally. As an economic point of view, the dichotomy frames a vast range of economic systems, but I wonder if it is really adequate when applied to the Japanese system. For one thing, it is exceedingly difficult to identify the notion of individual self- interest anywhere in modern Japan. For another, those who see failures of government and argue for the power of market principles in Japan clearly imply that the Japanese need to become more selfish and egoistic. From my point of view, any such notion is fundamentally at odds with the Japanese spirit. Egoism and self- interest are simply not relevant to discussions of the Japanese way of thinking. Far more relevant to the Japanese soul is the idea of altruism. In Japanese morality, extinguishing the self and rendering service to others are central values. This conception of the essential Japanese spirit is certainly a traditional one, and in the present era people have often dismissed it as a spirit that has been lost. I do not agree with this idea. In my view, this spirit of altruism has clearly been a significant factor in Japans rise to prosperity and major economic power status. It is the spirit of altruism, rathe r than the pursuit of self- interest, that has long supported the Japanese economy. Japan would do well to resist arguments calling for the hasty introduction of market mechanisms. Certainly the present economy has performed poorly, and a failure of government has naturally been declared, but addressing the problem through the
Family and Economy Ken Shimoda, 2001 dichotomy between big government and free markets makes little sense if self- interest plays no role in the Japanese economy. That is, if the dichotomy does not apply to Japan, then a solution based on it is unlikely to improve the situation. And even if the results of such a solution were enhanced performance or greater competitiveness, would it even be possible for the Japanese people to repudiate our ideal of living for others -- our belief in sacrificing oneself for ones people? If my own education is any guide, the answer would have to be no. As an elementary and middle school student in the late 60s and early 70s, I was taught by people who were raised before the war, and the pre-modern education that they received deeply influenced the education that they provided for me. Even though more than ten years had passed since the end of World War II, the notion of democracy had yet to become a dominant theme. Instead, the basic theme of my early education was altruism. I learned to reject any idea that entailed selfishness. I came to understand that my motive and purpose in life is to be of value to others. To live for a family. To live for children, our hope for the future. To live for the people of the world. I learned to live for society and for my country. The moral lessons that I learned as a schoolboy shaped me. These lessons are taught throughout Japan -we cannot avoid this educational experience; altruistic values are brewed into the Japanese spirit from the first. Countervailing images of Japanese egoism -- which in modern times have led to the tragedy of world war -- serve only to reinforce these va lues. In short, Japanese people feel an almost physiological antipathy to the pursuit of self- interest and to egoism. We shouldnt ignore this fundamental truth when we turn our eyes to the economy. In general, an economic system must be regarded as a whole, and every economic system is characterized by its unique culture and philosophy. Thats why there is little hope of bringing about an economic recovery by repairing only one part of an economic system -- even if only that part has been performing badly. Although the current economic situation in Japan requires an urgent response, a major surgical operation will probably be required, and can succeed only if the whole system is taken into account. Rather than simply treating the symptoms, we should look for causes from a system-wide perspective -- at the least we should make certain that our treatments will not cause further damage. Such a system- wide view has somehow been left out of the controversy over structural reform in the Japanese economy. Modern economics cannot fully explain
Family and Economy Ken Shimoda, 2001 what has been supporting Japan -- the philosophy of altruism -- but a cure for our economic ills will surely depend upon careful consideration of this underlying reality. What is unfortunate for Japan -- not least because it obscures this understanding -is the modern historical view that Japan and the Japanese people are state-oriented. In the context of this view, solutions based on the dichotomy between market and state sound all the more convincing. But this view is based on a misperception of people like me who received postwar education. In fact, our education taught us a spirit not of country, but of altruism. We were taught to dedicate ourselves not to the state, but to others -- to people. The spirit of altruism has nothing to do with ultra right wing, statist principles. One day, my young daughter surprised me by asking, Why did Japan go to war? Her question caught me off guard (she was only eight), but I replied calmly. Japan went to war because it thought only of itself, I told her. To avoid the same misfortune, we must be considerate of others. This means we have to talk to and respect each other. I wondered if this was enough of an explanation, but what else could I say? I couldnt tell her to live for herself or her country -- that wouldnt have answered her question at all. Im not sure why, but the concept of samsara -- the transmigration of souls -- has had a particular influence on me. At the heart of this concept is the idea that if I live for others, render service to others, then happiness will visit me. Or if not me, happiness will visit someone else. And even if this someone else has not yet been born, happiness will come to him or her in the future. Wouldnt this be reward enough for my actions? Returning to my main subject, the question remains of how economics can cope with this ideal of living for others, an ideal not compatible with that of the dichotomy of market and state. Perhaps the answer lies in understanding that living for others entails regarding everyone -- all people -- as your family. From the perspective of this moral consciousness, Japanese visitors to the web sites of U.S. companies are often surprised to encounter expressions like balance of work and life so frequently. In Japan, we do not draw a clear distinction between work and life. Rather, we see the company as family -- work at the company is life. This is why so many Japanese people (mainly men) are workaholics, and why so many others (mainly women) accept the work ethics of their spouses. The spirit behind this attitude towards work -- the spirit of altruism -- has supported the lives of countless or-
Family and Economy Ken Shimoda, 2001 dinary Japanese people. This spirit is a virtue, a beautiful moral force. This spirit is a philosophy, one long at the center of Japanese ethics and the Japanese worldview. To alter this philosophy would require tremendous power, yet the Japanese economic system cannot be changed without such alteration. Structural reform has been stressed as essential to the future of Japan, yet for reform to succeed we will have to find a new philosophy for those ordinary people who constitute our economy. This new philosophy can only be established through education, and only when people have been educated in this new philosophy can a new culture be cultivated according to its principles. Reform will take a great deal of time. This is appropriate, since the history of the past thousand years and of at least the next hundred must be considered. In my own life, I have lived and been supported by the spirit of altruism. I cannot cha nge my commitment to it or my belief that it is the most beautiful of philosophies -- the one that has supported Japan and the Japanese people. I want to live not for myself but for the sake of Japan. I want to live for the world. I want live for others. If everyone lived according to this ideal, the individual would disappear, selfinterest would fade away, and all would be members of a single family. Before exploring some new philosophy, I think it important to consider this philosophy that has supported us, and indeed to seek to regain its spirit. If we succeed, then family and economy can be reconciled, and perhaps their fusion can replace the dichotomy of state and market.