William J. Holstein

Japanese Elections: What They Show About the Role of Japanese Politicians
TOKYO--I was in Japan for the July 11 Upper House elections and spoke with Koichi Kato, a member of the Diet, and with Takao Toshikawa, editor of Insideline and also the Tokyo correspondent of The Oriental Economist.

As everyone knows by know, the old Liberal Democratic Party scored big gains in this election against the Democratic Party of Japan led by Naoto Kan. This frustrated the hope expressed by my Japan watchers that the DPJ would be able to consolidate political control and usher in a period of "reforms" to wake up Japan's slow-growing economy.

The reality is that Japanese politics is in a period of utter confusion, and Japan watchers should not focus their attention on it. It is going to take years to play out and is not as important to Japan's economy as observers such as The Economist would pretend. Politics is largely a sideshow in Japan. Real power is wielded quietly and from behind the scenes, as in a puppet show.

Kato, now 71, who has been elected to the Diet 13 times for the LDP, says a historic realignment is taking place because Japan has achieved its two key post-World War II goals--defeating Soviet Communism and catching up and surpassing the West in economic terms. "We had a very clear-cut goal of building this company to compare with European or American affluency," he said. "That target was achieved."

Now the usefulness of political system put in place in 1955, which he calls the 1955 system, has played out. There is no direction in Japanese politics because the Japanese don't know what goal they should be pursuing, other than to defend their $15 trillion in wealth and the sophistication of their economy.

He noted that the DPJ simply does not have a real platform and probably cannot remain in power as it is currently configured. He thinks that perhaps Japanese politics will evolve into something along the lines of the American two-party system, but it is still too early to tell.

Toshikawa has a different view. He thinks that some politicans within the DPJ will split off and form a grand coalition with the LDP, recreating a stable one-party system. And he notes that the real power shaping the debate today is elite bureaucrats within the Ministry of Finance. Nan was former minister of finance and was influenced by the administrative vice ministers, who are the key power-brokers in Japan.

These power brokers are far more influential than the politicians themselves, Toshikawa explains. They are shaping Kan's proposals on increasing Japan's consumption tax, and are pulling the strings on what his government can achieve. Because a Japanese prime minister comes into office with only about 25 of his own people, he lacks the power to force the ministries to obey him. There's even evidence that the reason that Kan's predecessor, Hatoyama, made such a mess of the negotiatons with the Americans over its military base on Okinawa is that the Ministry of Foreign Affairs and the Self-Defense Agency denied him adequate information and expertise. He was flying blind.

The bureaucrats also are the ones fueling the scandals plaguing one-time LDP kingpin Ichiro Ozawa. The bureaucrats don't want him in power, so they have unleashed the Tokyo prosecutors on him. He will not be allowed to consolidate power.

So for the foreseeable future, Japanese politics is going to be in a state of disarray, and will be shaped by bureaucrats acting behind the scenes. But that seems to work for the Japanese economy as a whole. It is not suffering from the political malaise. There are some issues that are cropping up, such as tensions over increased stratification in wealth and income, and between urban and rural areas, but overall Japan is incredibly wealthy. It is enjoying the fruits of more than half a century of striving to establish itself as an advanced industrial economy.