Japan: from frugal production to an anthropogenetic regime

Date: 2015
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Le Japon : de la production frugale à un régime anthropogénétique
13
Article Index
Awareness and Japanese environmental policy
Education, science and above all social security…
Health, education and culture at the heart of the…
Designing an anthropogenetic city
The anthropogenetic regime: Japan better than the…
13

For two decades, Japan has been seeking answers to questions raised by an increasing number of European countries in terms of economic growth, energy choices and adaptation to an ageing society. Japan aims to be anthropogenetic by 2030, combining societal needs, innovation and education objectives.

This decade has been marked by the emergence of new questions. Is the European Union at risk of falling into deflation and a long period of virtual stagnation? Is an economy without growth compatible with an era of prosperity in which the improvement of well-being is the central purpose of governments? What would the complete abandonment of nuclear power mean in terms of a reorganization of the energy system: an acceleration of the transition to renewable energies or a return to old techniques that contribute to global warming? Will population ageing bring about a crisis in public financing and result in a drying up of the sources of innovation, thus jeopardizing long-term growth? Is inequality in terms of income, wealth and the capacity to influence public decisions, an inevitability?

For over two decades, although not quite providing definite answers, Japanese society has delivered many insights into these various questions. This chapter offers some important lessons that can be drawn from the analysis of a trajectory that was once regarded as fairly unusual, but that is today proving to be an illuminating model for many countries. In the 1980s Japan served as a reference for new industrial models, but the country is enlightening in many other respects, in particular for the exploration of a socioeconomic system that is more in harmony with nature and takes into account the preservation of the social fabric to which education, culture and health especially contribute. This regime, which can be described as anthropogenetic, is not the result of the implementation of a theoretical model but the result of a series of adjustments in response to internal economic, social and demographic changes, but also of changes in the global economy over the decades since World War II. This chapter explains the main stages of its emergence by highlighting the components of the regime. Such an analysis would be incomplete without a discussion on the diffusion capacity of the Japanese configuration and an examination of the possibility that the anthropogenetic regime is one of the options for the reorganization of development models.

Accelerated modernization raises ecological issues at an early stage

After World War II, the Japanese authorities instigated a catch-up process in the country with a focus on imports, followed by a hybridization of the techniques of mass production. It was also an era of a great transformation in Japanese society (Sabouret, 2004). As a result, Japan grew rapidly which, however, led to considerable environmental damage. Such damage was all the more acute given the country's small size, making the coexistence of industrial facilities and cities difficult to organize. It was in this context that Minamata disease was discovered in 1953, a neurological syndrome caused by mercury poisoning that leads to the degeneration of the nervous system. With its striking although geographically-limited nature, this ecological disaster was one of the earliest factors that raised awareness on the relationship between human activity and the environment. Similarly, the demonstration of the link between increased asthma-related diseases and air pollution triggered the implementation of a protective law as early as 1968. Equivalent movements were observed in other countries, but the specificity of the Japanese geographical environment along with a vision of the world that links human and environmental processes, led to the threat being taken seriously, as demonstrated by the creation of an institute, then an agency, followed by a ministry, with a dedicated responsibility for the environment. The Japanese authorities were also aware of regional, and even global, interdependence in this field, as shown by the negotiation of the Kyoto Protocol (Okuma, 2013). Finally, accidents involving radioactivity also contributed to this awareness, not forgetting the way in which the recent tsunami and the Fukushima incident has brought environmental risks to the fore (Figure 1).

The lack of natural resources encouraged energy frugality and technological innovation

A second step in the development of the Japanese economy came in response to the two oil shocks of 1973 and 1979. Firstly, at the global scale, the analysis of the Club of Rome pointed strongly to a long-term incompatibility between the finiteness of natural resources and the possibility of unlimited growth. This message was particularly apt for Japan as the country has virtually no energy resources or raw materials. Secondly, Japan's public authorities reached the conclusion that it was important to redirect technical change towards greater frugality, and from this date onwards increased efforts to make more efficient use of natural resources and to recycle. At the macroeconomic level it was therefore important to aim for a strong external trade surplus for industrial products, to offset a structural deficit in energy products and raw materials. In essence, the Japanese economy is the antithesis of 'rentier regimes' which not only produce but also consume energy because its price is kept low, helping to contract the industrial productive base of those countries. Japan has taken the opposite direction and this is what has guided its overall growth strategy.

Therefore, considering its high standard of living, Japan is one of the world's most efficient countries in terms of energy intensity (OECD, 2014). In this way, the technological footprint is reduced for a variety of components: environmental damage grows at a significantly slower rate than production.

Thus it can be said that a complementarity existed between innovation, energy policy and a limitation of environmental damage. This represented the beginnings of a shift away from the American model of mass production and consumption. Industrial organization experts then diagnosed the emergence of an original production model that became known as 'frugal' insofar as it was based on a continual search for economies in all areas. This corresponded to an original configuration of the manufacturing sector in terms of incentive and remuneration and also of information flow and decision-making (Aoki, 1988). It was at this time that Japan was said to have explored an alternative path to that of a deepening of Fordism. What was the result of a series of pragmatic adjustments became a model that many other countries tried to emulate. In retrospect, several production models coexisted in Japan and their diversity is an enduring feature of industrial history (Boyer and Freyssenet, 2000). This point deserves attention because it is also likely to be relevant for emerging development models.

Financialization, a major crisis and a long stagnation

This enthusiasm was short-lived. Indeed, given the accumulation of major trade surpluses, the Japanese authorities were forced to open the country's economy and to liberalize the financial system. Thus, liberalization and international financial openness in the 1980s precipitated a speculative bubble in property (Aveline, 1995) and the stock exchange, of such a magnitude that the economy underwent a major crisis due to excess credit that could only be absorbed through a long period of restructuring of the balance sheets of banks and companies (Koo, 2009). This resulted in a loss of competence and legitimacy of the Japanese government, a government that blocked a quick exit from the crisis through recapitalization and restructuration of the banking and financial system (Boyer, Yamada, 2000). In addition, the increasing heterogeneity of the Japanese economy made it difficult for new coordination mechanisms to emerge (Lechevalier, 2011).

In the 1990s, two lessons were drawn about possible successors to the post-World War II growth regime. Firstly, it was during these years that the corrosive nature of financial liberalization was highlighted: enabling the possibility of indebtedness created a succession of speculative bubbles, which destabilized Japan's dynamic regime. Secondly, the disarray of the authorities responsible for economic policy, as well as the magnitude of the imbalances accumulated during the expansion period, led to a long period of quasi-stagnation. Japan was the first of the old industrialized countries to involuntarily experience an economy without growth. For over two decades, social and economic actors developed an original configuration that in some ways achieved the transition to an economy of prosperity.

Slow growth and the preservation of the social fabric

Following the rationale of the post-World War II model, the widespread access to education and the extension of social security coverage were seen as the result of dynamic growth, the benefits of which could be distributed between direct wages and the contribution to the financing of public goods and services. Indeed, when growth considerably slowed down, deficits in the public budget and the social security coverage accounts appeared and have accumulated until the present day. One of the peculiarities of the Japanese trajectory is that the cumulative growth of the public debt to GDP ratio has been acknowledged to be a result of a strategy based on two pillars. The first being that the continuity of the innovation strategies of companies is promoted by the state because it is the condition for sustainable integration into the world economy without reducing the standard of living, which is the most satisfactory definition of the concept of competitiveness. The second pillar is the importance of meeting the needs of society, first through a widely accessible education system: in fact, Japan is very well positioned in the international student performance ranking, not only when looking at the average but also when considering the low number of poor performing students (OECD, 2013); and also through a rise in expenditure on health, pensions and more recently those related to dependency. It is worth noting that these types of spending are continuing to represent an increasing share of total public expenditure (Figure 2).

Social fabric is preserved due to the originality of the Japanese wage labour nexus. Indeed, large companies exposed to international competition maintain the stability of the employment relationship: facing a reduction in the order books, they reduce hiring, working hours, bonuses and eventually the base salary, with redundancies being an instrument of last resort. In addition, the service sector has implemented a variety of employment contracts, including part-time and fixed-term, and the corresponding flexibility has avoided the explosion of mass unemployment. This configuration is the antithesis of the American-style model in which downsizing is the first tool in defence of profitability and for company survival.

Since the 1990s, inequality has increased significantly in Japan, prompting many analyses from researchers and causing public concern (Tachibanaki, 2009). Yet, in international comparisons, Japan, together with the Nordic countries, are the ones in which the growth of inequality has been contained (Piketty, 2013, Figure 9.3). One of the reasons for this is that the return on capital and the growth of inheritance are far from being major sources of rising inequality, even if they pose a threat for the future (Hayashi, 2014). Thus, during this period, the public budget has shown a dual priority: strong incentives for innovation to ensure competitiveness; and steady growth of social spending to safeguard the well-being of an ageing population. Quality of life can thus be maintained despite the absence of growth, on the condition, of course, that the deficit would be financed by the savings, that are essentially domestic, and that such savings would have a low return. However, this inability to curb the growth of public debt undermines the long-term viability of this original regime. This explains the reasoning behind Prime Minister Abe's government's attempts to revive the economy to better ensure the financing of social security. This can be interpreted as a defence of a socioeconomic system that favours well-being ahead of economic orthodoxy (Wolf, 2013).

Synergy between innovation and anthropogenetic rationale

Does Japan's current configuration define a transient regime specific to this country? Or is it part of a general movement aiming to account for the historic characteristic of the post-World War II growth regime and for indicators aiming at measuring the performance of each economy? Many indices argue for the generality of this transformation of representations and the recognition of emerging economic systems based on a better integration of welfare objectives. Improving health and efforts to universalize the provision of education are increasingly considered as vectors of development and not merely its consequences, especially given that the analysis in terms of human capital has been overtaken by approaches equating economic development and capacity building through the provision of basic goods such as access to education and health (Sen, 1999). The human development indicators that are regularly published by international organizations (UNDP, 2014), including the World Bank, demonstrate this evolution. These indicators are no longer simply a reflection of the success achieved in terms of the acceleration of growth, they can instead reflect the conditions of a better quality of development. This paradigm shift is not only true for emerging countries, it applies equally if not more so, to the more advanced countries for which the pursuit of prosperity could gradually replace that of growth (Cassiers, 2011).

Conceptually, these considerations may be the basis for a new representation of the economic circuit in contemporary societies: shouldn't they aim for the mobilization of human capabilities in order to reach a higher level of development, according to a recurrent and cumulative process? Natural resources, technology, products, services, capital and credit, namely the central concepts of economics, would only constitute intermediates in this ongoing process of creation and regeneration of modern society. To highlight its originality, namely the creation of humanity by human labour, it has been proposed to classify such a rationale as anthropogenetic (Boyer, 2002), in line with the founding intuition of Bruno Théret (Théret, 2011), who called it anthroponomic.

In a more analytical way, we can also show that the economics of innovation is itself a component of the corresponding process, by incorporating logically the demographic phenomena and highlighting the synergy between education, culture and health. The consideration of innovation is important as it stimulates production and provides funding for public services and social security, which are at the basis of the model (Figure 3). Its success is no longer measured in terms of the GDP growth rate, but of the observation of improved well-being as perceived by members of society. It does not prejudge the end of growth or the need for degrowth: it will be a result of a specific institutional configuration.

A change of society and era

Japan's situation is characterized by an ageing population, the beginnings of a slow population decline and almost flat economic growth. As a result, most institutional forms and policies have to adapt (Matsutani, 2006). In the past, the benefits of growth were fairly evenly distributed and while the social protection was relatively limited, public infrastructure works allowed the homogenization of the evolution of the different regions and consequently of the various social groups: this is how solidarity was expressed. The 2000s marked a breakdown, the use of public works decreased while spending on social coverage accelerated (see Figure 3). This era is now over for a variety of reasons.

"Japan's GDP will no longer be in itself the foundation that is able to maintain a sense of national unity (...). However, even in the absence of economic growth, Japan will have another asset in increasing quantities. This asset is leisure time. (...) This additional leisure will give more opportunities for individuals to pursue their interests and a new individualism will emerge. While the common pursuit of economic growth implied shared values, pleasure related to leisure will develop a wider range of values. The reference to "I" will replace the perspective of "We the Japanese". People will begin to see themselves more as members of their communities than as citizens of a nation. (...) To maximize the benefits of increased leisure requires the organization of appropriate spaces. Urban planning will have to take into account the local culture and traditions and different types of recreation. (...) The reduction of the Japanese population opens an interesting promise of richer and more fulfilling lives." (Matsutani, 2006, 186-187).

This vision is already at work in some local experiments such as in the Toyoshikidai district in Kashiva city in the Chiba prefecture (Technology.org, 2013). It aims at organizing a community designed for senior citizens including not only medical and care services, but also employment opportunities, while ensuring that different generations of residents are able to meet, for example through a community restaurant (Figure 4). In 2009, the Institute of Gerontology at the University of Tokyo, which supervises this project, launched a consortium on gerontology bringing together universities and industry, in which are involved most of the major companies from all sectors of the Japanese economy. These companies perceive an old age society as an opportunity for new activities and they anticipate that the knowledge acquired in Japan will be exported to other Asian countries that will experience their own period of rapid population ageing, soon after Japan.

This example highlights three features of the emerging regime. Firstly, it does not only involve costs to the public budget and social security because it can be an opportunity for new sources of innovation, in biotechnology and health, but also in all other sectors (home automation, transport, urban development and recreation). Secondly, it carries the potential of the local integration of policies previously conceived as sectoral actions derived from central government, the interdependencies of which could have appeared in the field as malfunctions. Finally, in seeking to integrate various activities (work, consumption and leisure) at the local level, this strategy may be efficient in terms of energy and the environmental footprint. The anthropological rationale is not contradictory with the search for ecological sustainability. Thus Japan, although often blamed for its delay in implementing economic policies to exit the crisis, may in fact be exploring a possible route for the future (Sabouret, 2011).

From a series of adaptations to a reflexivity effort: what are the vectors of this emerging model?

The analysis of changes in Japanese society since World War II brought forward an overall reorganization which distances the country from the typical industrialist model of Toyotism. To a theoretician, these transformations are likely to define a system and an original socioeconomic regime. However, what about collective actors and individuals who shape the daily transformation of organization forms: do they adhere to such a perspective and do they adapt their behaviours and strategies accordingly?

If the vision of a society without significant social tensions is adopted, in which most people recognize themselves as belonging to a large middle class that relies on the political and economic elite, then piloting such a transition is, a priori, easy. This is because it would be a reiteration of the modernization strategies of the post-World War II era. In fact, success has gradually transformed Japan's social structure into one where the interests of various social groups are no longer necessarily convergent.

Given the economic downturn and the drop in job creation, it is more difficult for the younger generation to gain access to the wage/social status of their parents: the university system delivers more graduates than the corporate sector can recruit under the privileged status of 'salarymen'. The proliferation of non-standard employment is causing a fragmentation of employees and, in some cases, the few who are left behind by the education system reject the status of employee. This, a priori, goes against the anthropogenetic model. However, the cultural component of this model contains a corrective factor, since a proportion of the young people who reject the old model may serve as the vector of the new one in the cultural field (design, publishing, music, performing arts, gastronomy, etc.). We refer here to some of the successful diffusions of Japanese innovation (manga, karaoke, cinema...).

The status of women is a second major issue. Indeed, Japanese society does not make the most of female expertise because, despite performing better at university than their male counterparts, the traditional social norm prevails over gender equality, even though this equality is inscribed in law. Indeed many women have to choose between pursuing a professional activity and the education of their children. The insufficiency of public nursery systems and the lack of funds dedicated to family policy largely explain the low Japanese birth rate of about 1.3 children per woman. A declining population goes hand in hand with an ageing one, therefore the problem lies in the purely demographic component of the anthropogenetic model in the strictest sense.

Pensioners are theoretically the beneficiaries of a system in which life cycle is integrated into the organization of social security coverage. Two other favourable factors for senior citizens are the Confucian philosophy of respect for elders, and secondly that the rural population (which is relatively large and ageing) has a significant impact on the electoral process. However, other factors are obstacles: given the increase in life expectancy, the retirement age has had to be raised and low pensions mean that some must continue working, while others fall into poverty if they have not had a salaryman career. Given that beyond a certain threshold health expenditure grows very rapidly with age, those responsible for economic policy are concerned that ageing is a major cost to public finance.

Large Japanese companies specializing in the production of manufactured goods that are typical of modern lifestyles continue to play a key role in the macroeconomic regime: the surplus of the trade balance that they allow provides the necessary funds for the importation of natural resources and agricultural products, a dependency that the shutdown of nuclear power plants has increased. Therefore, the stepping up of social security coverage should go side by side with the preservation of an export sector that is structurally competitive beyond short-term exchange rate fluctuations. This sector can continue to benefit from the spillovers resulting from the dynamism of innovation in mature industries, favoured by the adaptation of the school and university system, which can also be extended to innovations derived from the establishment of the anthropogenetic model (biotechnology, automation, urban planning and the network organization of healthcare services). The objective is to somehow disseminate and generalize the experiences mentioned above (Figure 4) and to bring about a system of innovation and production that is consistent with extensive insurance coverage. This is, it seems, the recipe for success in social-democratic societies (Boyer, 2015).

The task of researchers is to unravel the multiple causalities inherent to this new regime. While the most important work relates to the capacity of politicians to arbitrate between contradictory interests and to attempt to reach a consensus that can guide actor strategies and social groups.

The dynamics of local solidarity and the loss of trust in politicians

Between World War II and the 1980s, Japan had a reputation for high quality management assured by the trinity of competent bureaucracy, political stability ensured by the continuous leadership of the same political party and powerful industrial groups supporting technological modernization. In view of Japan's remarkable economic performance, public opinion was generally convinced that these elites were working for the good of the majority of the Japanese population. If this remained true today, it would be sufficient to update this configuration to establish a new mode of development. Research on social movement in Japan provides a somewhat different picture: at the local level, new demands have periodically emerged, which have been inconsistently dealt with over time (Buissou, 1997; 2012; chan-Tiberghen, 2008). They have led today to a loss of confidence that is particularly focused on the ability of governments to meet the expectations of citizens.

A first breach of confidence occurred when the property bubble burst in 1990: not only did citizens question the competence of the public authorities to overcome the crisis, but they suspected that collusion between banks and the government had been instrumental in the genesis of the problem. In 1995, the Kobe earthquake dramatically highlighted the disorganization of the public authorities, given that most of the emergency assistance was provided by a local solidarity movement. The readiness to pass laws promoting the solvency of insurance companies and the slow pace of reconstruction suggested that the government did not defend the general interest of the population. In March 2011, the nuclear accident in Fukushima once more revealed the weakness of government control over large companies for electricity generation and the difficulty to define and fund a reconstruction programme to address the challenge posed. On the other hand, this government weakness led to a new anti-nuclear movement of unprecedented proportions, which itself is part of a long history.

Opinion polls revealed a collapse in the credibility of government spokespersons that was even more dramatic than the falling trust in media or energy producing companies. International comparisons show that a similar trend has been observed in most countries, but it is especially marked in Japan (Edelman, 2014; World value Survey, 2014). This is of course a handicap for the exploration of a development path that requires coordination around expectations shared by a large number of actors.

In contrast, sociological analyses confirm the resilience of a high degree of trust and solidarity at local and sectoral levels, which allows social experimentation to be carried out in response to the demands and aspirations of citizens. It is currently difficult to scale these experiments up into a national strategy, but they are one of the two components of the processes which, in the past, have led to the emergence of new development modes (Boyer, 2014).

Making the best use of models

Is the Japanese trajectory general? A priori, it is close to the design implemented by the social democratic Nordic economies, given that social security coverage has for a long time been thought to be a possible contribution to a growth regime that makes equity and efficiency compatible (Visser and Hemerijck, 1997). In fact, many statistical analyses confirm this similarity: Japan and the Nordic countries are the most advanced in ecological terms and also show the lowest economic and social inequalities). However, institutional analysis confirms they do not belong to the same variant of capitalism (Amable, 2004; Harada and Tohyama, 2011). For some reason there is no canonical configuration of anthropogenetic regimes. Is this assumption called into question if one takes the United States into account? Indeed, the United States is at the technological frontier in most areas: education and university system, health and leisure industry. However, the response is largely negative (Figure 5).

The life expectancy of Japanese people is significantly higher on average than that of Americans, health spending appears lower by nearly 40% compared to those of the United States, even though the proportion of the elderly population is much higher. In Japan, the share of public expenditure on education is lower, but access to higher education is better than in the United States. A comparison of the incidence of crime and homicide shows that Japanese society is more peaceful than that of the United States. Finally, inequality is much lower in Japan. As noted earlier, the only area where Japan falls short, which is an important one, is the low Japanese fertility rate that leads to an ageing and declining population. This trend derives largely from the unequal economic status between men and women (Lechevalier and Arai, 2005), and feminist movements have not been able to eradicate this inequality (Fujimura and Kameda, 1995). This is one of the weaknesses of this version of the anthropogenetic model. However, given that the return to rapid growth seems unattainable, why couldn't a prosperity economy be organized that centred on the pursuit of the quality of life? It is possible that this strategy could be applied to Europe in its present and future state. However, it must be remembered that those who tried to import the Japanese model of production in the 1980s encountered many problems. This difficulty is even greater when considering a complex socioeconomic system, which should be part of every national trajectory, because it requires the reconfiguration of a large number of institutions and organizational forms that have been inherited from a past that is no longer with us today.

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