Dogs and Demons_ Tales From the Dark Side of Japan - Kerr [124]
Japan's low capital productivity begs another comparison with ancient Sparta. Plutarch writes that Lycurgus, the founder of Sparta, ordained that Spartans must use iron money. Given that iron was of so little value and yet so heavy, the best people could do was lay up stocks of it in their closets. After a while, they ceased to have much interest in acquiring wealth and instead devoted themselves to military glory. Plutarch points out that «being iron, it was scarcely portable, neither, if they should take the means to export it, would it pass amongst the other Greeks, who ridiculed it... For the rich had no advantage here over the poor, as their wealth and abundance had no road to come abroad by but were shut up at home doing nothing.»
Japan has stored up a huge pile of savings, but the money is iron, shut up at home doing nothing, and the nation is paying the price, with the Tokyo Stock Exchange stagnant for a full decade, a crumbling welfare system, and securities firms that lack the expertise to compete abroad. In this there is a valuable lesson in what really constitutes culture and tradition. Entrenched Asian elites are very fond of appealing to hallowed «Asian values» as a means of clinging to power. MOF's distrust of the free use and flow of money would seem to have all the sanction of Japan's tradition of control by elite officials. On the other hand, it's important to realize that for all its bureaucratic background, Japan also has a freewheeling mercantile history. Distrust of the free flow of money is actually something new, an aspect of Japanese tradition that was relatively minor until after World War II.
When the U.S. Occupation confiscated the zaibatsu assets from their owner families, the bureaucracy as we now know it took control of the government. Salaried officials feared the robber-baron capitalists of prewar times and used every means m their power to rob them of the power of their money. That was how the present system got going. Today, the reason MOF fears the free flow of money boils down to a simple question of control. Money is power, and the ability to decide how money is used and invested is what keeps Japan's bureaucrats firmly in control. That said, the oddest part of the equation is the amazing disdain the bureaucracy shows for money. The figures for debt, bad loans, failed stock markets, and so forth are staggering enough to keep the leaders of most other countries lying awake at night in terror. Yet Japan's government agencies seem curiously unconcerned. Like spoiled society girls who grew up on ample trust funds, Japan's officials have never really had to learn what money is. When they needed it, there was always more from Daddy.
Edo townspeople knew better than to distrust and disdain money. The novelist Saikaku warned:
Year after year the loss and senseless waste pile ever higher one atop the other: the blossoms of a merchant's flowering talents fall, his brocade robes are replaced by ones of paper, and finally, in the same way the seasons turn one to another, he is reduced to a faceless beggar. Consider all this and it should become apparent that for the merchant, in all his varied activities, there is simply no room for lack of heed.
Michael Phillips, an adviser to start-up companies in California, wrote a classic little volume in 1977 entitled The Seven Laws of Money. The Second Law was «Money has its own rules,» which meant that no amount of goodwill or cleverness gets you beyond the simple laws of supply and demand, income and outgo, profit and loss, compound interest, and so forth. He writes: «The rules of money are probably Ben Franklin-type rules, such as never squander, don't be a spendthrift, be very careful, you have to account for what you're doing, you must keep track of it, and you can never ignore what happens to money.» Yet for a while it became fashionable