Japan’s deep cultural problems

A front page story in the Honolulu Advertiser yesterday reported that Japan is still mired in a protracted economic recession. Japan’s economy has been in the doldrums since the early 1990s. And yet it still has not rebounded. Why?

The problem is as much cultural as anything else (e.g., political or economic). The Japanese culture itself tends to be stagnant and highly resistant toward badly needed change/reform. The Japanese culture does not promote maximum productivity, creativity, entrepreneurship, and innovation. It does not foster free, open and unbridled free market competition. The Japanese culture is economically inefficient in many respects.

What the Japanese culture needs is a good dose of good, old-fashioned Yankee free enterprise and rugged individualism. The Japanese culture desperately needs to liberalize and modernize. In order to compete with the mighty United States of America, Japan has to drop all of its cultural baggage and begin anew. Japan desperately needs a new Meiji Restoration. Otherwise, it will never be able to fully extricate itself from its persistent economic malaise.

Japan, for example, has to drop its cultural tendency to value close personal relationships over price and quality. In Japan, close personal ties matter much more than a product’s price or quality. This represents a distinct competitive disadvantage in a world filled with continuous change and competition.
American businessmen would probably do business with Mr. Jack D. Ripper if the price is right and his service is all right. It is not complicated.

Furthermore, Americans get right to the point when doing business. As Benjamin Franklin said, “time is money.” And Americans do not like to waste time getting overly aquatinted with their business suppliers or associates.

For Americans, what counts above all is merit. “Can they get the job done right at the best possible price?”–that’s all that really matters to most Americans.

Not so for the Japanese. In Japan, you need “connections” to get the business. There are endless letters of introductions, formal introductions, bowing, business card rituals, do’s and don’ts, proper seating arrangements, and a whole host of other business inefficiencies.

In Japan, it is considered impolite to be direct, concise and straight to the point. Business people need to seduce each other first, before getting down to the nitty gritty of price, terms and specifications. In Japan, discussing major business items over the telephone is frowned upon. There, it is considered impolite to discuss business on the first meeting (sort of like kissing on the first date).

Americans do not have such cultural hang-ups. We do not feel compelled to waste time and money by constantly giving each other gifts for business purposes. We simply do business.

We do business with anybody from any part of the world–so long as they can produce or perform. We do not view foreign companies as “the enemy.” Americans make money through an open climate of earned merit–through a free market, capitalistic system that respects the individual, not through a closed system of cultural protectionism.

Japan will never surpass America through a culturally closed, inefficient system. No country in the world can succeed through merit-less protectionism.