hankyoreh

Illustration by Kim Dae-jung

Pak Noja (Vladimir Tikhonov)

By Pak Noja (Vladimir Tikhonov), professor of Korean Studies at the University of Oslo

In the early 1990s, I read “The Rise and Fall of the Great Powers,” a book by Paul Kennedy (b. 1945) that was very popular following its publication in 1987. While it remains an indubitable classic for its exploration of hegemonic politics over the past 500 years, it also illustrates the difficulty of guessing what tomorrow will bring.

After a very cogent discussion of the fall of American hegemony, Kennedy identified Japan as being the “future power” that might arise to displace the US as the global hegemon. Academics often cite this inaccurate prophecy as an example of the limitations of predicting the future.

But it may not be fair to castigate Kennedy with the advantage of hindsight. In the mid-1980s, most of the Western world, aside from a few skeptical analysts, saw Japan as being the capitalist model with the most potential for the future.

Japan had much less inequality than the US and only half the child poverty of the US (which then stood at 10%). In 1985, the birth rate in Japan (1.76) was considerably higher than Western countries such as Germany (1.36). Overall, Japanese society looked much healthier.

Violence and social deviancy in Japan were at the lowest level of any high-income country, and its high level of social cohesion was the envy of the West. On top of that, Japanese culture was gaining more and more appreciation abroad.

Some experts raised concerns about the closed-off nature of Japanese society — evident in its discrimination of Korean-Japanese and other minorities — as well as the intrinsic fragility of the “construction state,” referring to Japan’s overreliance on construction projects. But such observations were ignored by the numerous people who fervently believed in “Japan as number one” (which was the title of a bestselling book).

About thirty years have passed since then. The US briefly recovered its prestige in the 1990s, during the fall of the Soviet Union and the Internet revolution. But in the 2000s, the decline of American hegemony foreseen by Kennedy continued apace with the debacles of the US invasions of Iraq and Afghanistan.

Those failed invasions, the rise of political groups fueled by racial animus, and the US’s feckless attempt to fight COVID-19 have left the US’s global reputation in tatters. But if we were to identify a country whose status has been even more tarnished than that of the US, it would have to be Japan.

First of all, Japan’s “era of growth” is now a thing of the past. Since aggregate domestic demand isn’t increasing, the slowdown of growth can’t be reversed no matter how much money the administration pours into the economy through quantitative easing.

The obvious reason that aggregate demand isn’t increasing is the pauperization brought by the creation of large numbers of irregular jobs, a product of neoliberal policies. The poverty rate in Japan — where 38% of all employees are irregular — is 15%, even higher than the US (9%), and average wages are only about 75% of the level in the US.

Japan is a stagnant society plagued with uncertainty and growing inequality, leading to various pathological phenomena. The suicide rate in Japan, to take one example, is much higher than in the US and most Western countries. As the society ages and the birth rate falls, Japan’s total population has been on the decline since 2011, leading an increasing number of people to ask whether Japan has a future.

Under Kennedy’s analysis, US weakness has been exacerbated by immoderate military expansion. But considering that Japan has refrained from excessive military spending since 1945, the cause of its failure must be found elsewhere.

Some people believe that the primary cause for Japan’s downward slide over the past few decades is the “establishment bloc” of the Liberal Democratic Party (LDP), which has monopolized political power (except for a very brief period) since 1955 and avoided societal corrections regardless of its policy failures.

In this analysis, land-owning politicians kept the economy focused on construction projects, leading to the real estate bubble that ultimately imploded. Members of the establishment were indifferent to issues of redistribution and inequality and didn’t even try to prevent the growth of employment insecurity and relative pauperization.

Whereas the members of the establishment were uninterested in labor issues, organized labor had far too little of a voice, preventing the society as a whole from resolving those disparities.

Other analysts attribute Japan’s population decline to the strict immigration policy adopted by the establishment, making it impossible to maintain or expand the population by letting in immigrants. Under this view, the LDP dinosaurs who took pride in having built postwar Japan were ultimately responsible for ruining the country.

On the surface, this would seem to bear no relevance to South Korea. While Japan is a de facto one-party state, a two-party system has taken root in South Korea over the past 25 years, with power regularly changing hands. The sharp standoff between the two parties has made Korean political scene much healthier than Japan’s.

But there’s a problem: the two parties have maintained an unofficial consensus on certain issues that are little different from the LDP’s catastrophic policies over the last few decades. Despite a debate about damage to the environment, the ruling party actively supports the construction of a new airport on Gadeok Island, in Busan, shedding light on the elites’ bipartisan consensus on the economic focus on construction.

Several progressive ideas have been proposed, such as building more public housing units, but both conservative and liberal governments have so far failed to suppress housing prices and prevent a bubble from forming.

These administrations have been criticized for prioritizing the interests of high-income earners with multiple properties, such as by providing tax benefits for registered landlords. Korea’s continuing focus on the construction industry and the failure of its housing policy raises the specter that Korea is following the path taken by Japan.

Thus far, South Korea has been more successful than Japan at attracting immigrants who can bolster the workforce as the society ages. Foreigners account for 4.9% of the Korean population but less than half of that — just 2.3% — of the Japanese population.

But in terms of the exclusionary nature of policy toward foreigners, South Korea and Japan have more in common than one might expect. Korea allows marriage migrants to become citizens, but most workers, including manual workers, aren’t given the option of residency and are only allowed to be (temporary) workers and sojourners. In an era of societal aging and low birth rates, human resources are more precious than money or skills, making such insular policies a human disaster.

What reason could South Korea have for regurgitating policies that have already failed in Japan? Even more importantly, why has Korea allowed the mass production of irregular workers, which has been identified as the cause of the decline in aggregate demand and the pauperization of the masses around the world, including Japan?

Japan used to be the role model for modernity. But today, it offers Korea, and indeed the whole world, a prime example of what not to do. Koreans need to take stock of Japan’s failure and consider how they can avoid the trap into which the Japanese have already fallen. And we’re running out of time to avoid that trap, even in part.

Please direct comments or questions to [english@hani.co.kr]