Japan: The Modernization of an Ancient Culture
by Lawrence C. Wolken
At a time when both countries face similar economic problems, political considerations must be put aside if the strong ties between the United States and Japan are to be restored. Internally, both nations are confronted by a slowdown in economic activity, rising unemployment, increases in government spending, growing deficits, and demands for expanded social programs. Externally, they face greater competition in the world market not only from each other but also from developing nations like South Korea, Taiwan, Hong Kong, and Singapore. In spite of these problems, the basic economies of both countries remain strong. Giving in to the increased pressure for protectionism may be politically appealing to Americans and Japanese alike, but this will not solve the economic problems they face. Instead, it will only make matters worse. The few jobs which may be saved initially in protected industries will be more than offset by the jobs lost at first in export industries and then in other parts of the economy as economic activity declines as a result of the higher trade restrictions. In addition, consumers will pay higher prices for the goods they buy and both the variety and the quality of these goods would be reduced.
What is the alternative to protectionism? Reducing, and eventually eliminating, all trade restrictions between the two countries. This would force industries which previously were protected to either become competitive in the world market or go out of business. Undoubtedly some companies in each country would fail. This could be offset by the emergence of healthier companies in the surviving industries and by the increase in general economic activity which would result from an expansion of international trade. In time, this new economic growth would help reduce the pressures on both governments to stimulate the economy by expanding social programs and thus help reduce budget deficits. Japanese and American consumers would benefit from the lower prices and improved quality resulting from increased competition.
This can occur only in an atmosphere of trust and understanding coupled with mutual cooperation and friendship. Japan and the United States cannot afford to repeat the mistakes of mutual misunderstandings, fear, racial prejudice, distrust, national pride, and ignorance of each others culture which characterized their relations during the 1930s. There is no reason why two countries which compete in world trade cannot remain friends. This is particularly true of Japan and the United States. If two countries with so many similarities in their economic, political, educational, and social systems cannot maintain friendly relations, then what two countries can?
Efforts to reduce the friction between Japan and the United States are of paramount importance not only to the two countries themselves but also to the entire free world. Because they account for onefifth of the trade in the free world, an escalation of protectionism and a deterioration of the political ties between the two countries could threaten the economic vitality of the entire free world. If the global economic trends which have occurred since World War II are any indication of the future, economic activities involving the United States and the Orient, particularly Japan, will dominate the world economy of the twentyfirst century. A return to protectionism and the economic stagnation which is bound to result should not be allowed to happen. It is therefore imperative that the United States and Japan work toward solving their own internal economic problems while trying to build stronger economic ties with each other. Accurate information and a genuine effort to understand shared problems are vital to this process.