Dogs and Demons_ Tales From the Dark Side of Japan - Kerr [62]
Just as there is no environmental-assessment regulation, there is no product-liability law, no lender-liability law, very few rules against insider trading or other market manipulations, few testing protocols for new medicines – and no cost-benefit analyses for the gigantic building schemes of government agencies. Banks and securities firms routinely falsify financial information at the direction of the Ministry of Finance. When Yamaichi Securities went belly-up in late 1997, investigators found that MOF had instructed it to hide more than $2 billion of losses in offshore accounts. Hamanaka Yasuo, the trader who cost Sumitomo Trading $2.6 billion through his dubious commodities dealing, violated no Japanese law. While home builders must contend with a welter of ordinances that happen to keep construction-company profits high, there is no city planning in the true sense of the word.
Because of the paradox of control versus regulation, the world of rules in Japan has a Through the Looking-Glass quality. A store must wait three years after getting a liquor license before it can sell domestic beer – but vending machines sell beer freely, even to minors, everywhere. The supermarket chain Daiei had to apply for two separate licenses to sell hamburgers and hot dogs if it displayed these products in different sections of the same store – but meat-processing standards for food manufacturers had not changed since 1904. If a supermarket sells aspirin, a pharmacist must be present and have medical tools on hand – yet nowhere else in the developed world are physicians free to dispense drugs themselves, and as a result the Japanese use far more drugs, of dubious efficacy, than any other people on earth. The Through the Looking-Glass nature of Japanese regulations goes a long way toward explaining such preposterous prices as $100 melons and $10 cups of coffee. The aggregate cost to the economy is simply incalculable. These outrageous prices, absurd regulations, weird and inexplicable public works – all the ingredients of a manga-like world – exist for the simple reason that bureaucrats profit from them.
Officials have devised many ingenious ways of channeling funds into their own pockets. The River Bureau, as we have seen, has made a particularly lucrative franchise of its work.
While bureaucrats get the lion's share of the profits from construction work, a goodly percentage flows to political parties. The rule of thumb has been that contractors pay 1 to 3 percent of every large public-works project to the politicians who arranged it, in which practice the Tax Office colludes by recognizing «unaccounted-for expenditures» (i.e., bribes to politicians and bureaucrats) as a corporate-expense line item, which in the case of the construction industry amounts to hundreds of millions of dollars annually.
In Mito Komon, a long-running Japanese television series set in the Edo period, Lord Mito, the uncle of the Shogun, travels around the country incognito righting wrongs done to innocent people. The scene changes with each episode, but the villain is invariably a corrupt samurai machi bugyo, or town administrator, whom we see seated in his spacious mansion before an alcove decorated with rare and expensive art, counting gold from ill-gotten gains. His victims have no recourse against him. Only at the climax of each episode does Lord Mito's attendant raise high his paulownia-flower crest and reveal his true identity, whereupon the administrator falls to the ground in obeisance and is carried off for punishment.
The difference between Edo and modern Japan is that today we have no Lord Mito. The public suffers from chronically expensive goods and services, while bureaucrats and politicians prosper to a degree that verges on the fantastic, nowhere more than in construction, where amakudari reap post-retirement fortunes. With more than 500,000 construction firms in Japan, no ex-official will ever find himself out of a job. Their personal future income at stake, Construction Ministry bureaucrats support and encourage