Japan's agonizingly slow attempts to resuscitate its ailing economy have left many observers bewildered. The policy failure is plain: the lowest growth rates in the industrialized world, skyrocketing unemployment (by Japanese standards), rising levels of bad debt and historically high levels of bankruptcies. For good reason the '90s are referred to as "the lost decade." Yet change has been piecemeal at best. How can a country tolerate this death by a thousand cuts?
Edward Lincoln, a long-time Japan watcher, provides the most convincing explanation for that inaction in "Arthritic Japan." His conclusion is strikingly simple: Japan is too rich to feel the pain, its citizens either too comfortable with the rigidities of the economy or too fearful of the unknown to embrace reform. Japanese values are an obstacle to the serious structural change that is needed. They will continue to inhibit reform -- and the world needs to accept that fact and its implications.
Lincoln is a reliable observer. From his vantage point at the Brookings Institution, a venerable Washington think tank, he has published several books on Japan's economy and the country's role in the world. In addition, he spent several years in Tokyo as the special economic adviser to U.S. Ambassador Walter Mondale. That tenure gave Lincoln real insight into the workings of the highest levels of Japanese policymaking. It must have been a frustrating experience: Several years ago, he proposed that U.S. policy makers quit returning phone calls from Japanese colleagues as a way to get their attention.