But the funny thing is that neither Japan nor Germany is in much of a mood to imitate the United States. For all their problems, the Germans and the Japanese don’t want to be more like us. There are, make no mistake, plenty of businessmen in both countries who openly envy the flexibility and efficiency of the U.S. economy. But neither country shows much inclination to junk the systems that created their respective economic “miracles.”
Why? Mostly because the Germans and the Japanese give a different answer to a simple question: what’s an economy for? Most U.S. policymakers would say, to raise living standards. For the Germans and the Japanese, the answer is: to create social stability. For that reason, Tokyo and Bonn are convinced that the American ruthless emphasis on efficiency has social consequences they want no part of. Thus, in Germany, even though it’s obvious workers are vastly overpaid, no major company would think of trying to break a union by hiring scabs. The country’s social compact won’t allow it. Meanwhile, lavish unemployment benefits–often up to 80 percent of a worker’s prior pay–ease the pain of joblessness, and employed Germans pay the necessary taxes with less grumbling than you’d expect. “It’s simple,” says Axel Zerdick, an economist at Berlin’s Freie University, “we need to pay those taxes.” To many Germans, taxes are the price of admission to a country that believes government should make the pain that capitalism can dole out go away. Whether Germany can continue to afford to do that without snuffing out economic growth is now an open question. The only thing that’s certain is that it’s going to try.
What sets Japan apart is the role of the corporate shareholder. In the United States, the shareholder is king. Ever heard of an American CEO who didn’t say his main job was to do right by his shareholders? In Japan, you turn the question around: ever heard of a CEO who did say his main job is to reward shareholders? The answer in both places is no. A Japanese manager’s constituency remains his employees. Japan’s CEOs look at Kirk Kerkorian’s latest run at Chrysler in horror. Why a plainly successful company should have to deal with something like that is not, to them, immediately apparent. They remain much more comfortable with the stable shareholding arrangements between companies–the famous keiretsu ties in business groups like Mitsubishi. Precisely because of those ties, Japan’s top corporate managers are not–and never will be–slaves to shareholders. Japanese CEOs can thus try to abide by the country’s lifetime-employment gospel without driving away investors.
In a no-growth economy–which is what Japan has had for the last four years–that hurts corporate Japan’s competitiveness in the short run. That’s particularly true now, with a strong yen adding to Japan’s cost burdens. But the overwhelming consensus in Japan is that it’s worth it. In this, the longest slump in Japan’s postwar history, the unemployment rate among Japanese men between the ages of 30 and 55 is all of 2.1 percent. And as sexist as it might sound to American ears, keeping those men employed in good-paying jobs is the foundation of social stability in Japan. Part-time workers–many of whom are women-have been shed in droves in Japan. Full-time workers–mostly men–have not. In the United States being No. 1 is everything; the Germans and the Japanese know very well they have enormous problems; but still, they’re looking at us and saying, you can have it.
