Tokyo: The Hard Life

Japanese stoicism seems to be a guarantee of continued trade imbalances


FOREIGNERS IN JAPAN soon work up lists of “Why on earth ...”questions. Why is pachinko, a mindless pinball game that you “play” by watching metal balls bounce around, the most popular pastime among some of the world’s best-educated people? Why is a person’s blood type—A. B, O, or whatever— supposed to reveal his character, like an astrological sign? Why do men cruise through neighborhoods twice a week, in trucks equipped with loudspeakers, incessantly announcing that poles for hanging laundry are for sale? (Can there be that much repeat business?) Why do the generally fastidious Japanese leave their lurid, phone-book-sized comics, known as manga, on train seats, on sidewalks, or wherever else they happen to finish reading them? Why have I gotten the urge to read manga on the train?

One question is even more compelling than this last one: Why is life in Japan so hard? I don’t mean hard for me, with my battered dollars, but hard for the Japanese, who have supposedly won the world’s economic wars. Japan, as everyone knows, now has the highest per capita income of any country, apart from, perhaps, a couple of oil baronies. Yet few Europeans or North Americans would willingly trade places in daily life with the average Japanese, whose living conditions are cramped, working hours are long, and material rewards and chances for recreation are slight compared with those in the rest of the industrialized world. One friend from New York, on his first visit to Japan, walked through our neighborhood in Yokohama on a sunny day and saw laundry flapping from every window and porch. “You mean no one has dryers?” he asked. “ This is how I expected Seoul to look.” Japan now has enough money to do anything it wants. Why do rich people keep living this way?

The answer to this question is crucial, because it essentially determines whether the world’s trade battles with Japan will ever end. If most Japanese people agree with the outside view— that Japanese life is needlessly hard— then trade imbalances will start working themselves out. The Japanese government may try to keep markets closed, bur the people themselves will eventually rebel. They will find ways to buy cheaper imports, they will take more time off, they will get tired of tightening their belts in order to increase world market share. They will complain about, and finally change, the regulations and government-sanctioned cartels that thwart the consumer’s interests in Japan. But if, for whatever reason, the Japanese public feels that its material desires have been satisfied, then trade problems might never solve themselves. Japanese workers and consumers will have little incentive to behave the way market theory says they should, by using their ever increasing wealth to live in ever more comfortable style.

My impression is that, unfortunately, the second hypothesis is the correct one: the Japanese public is already quite content, or, more precisely, is not unhappy enough to demand a substantial change. Contentment is a plus for any country, but in this case it practically guarantees continued trade friction.

Now a few definitions: In many nonmaterial ways Japan’s standard of living is certainly very high. Crime exists, but its rarity is a luxury for which many Americans would gladly exchange loads of material wealth. Although class divisions also exist—and, in fact, seem to be widening, as it becomes more and more expensive to get children into the right private schools, which lead to the right universities, which lead to the right jobs—the divisions are muted compared with the United States or Europe. And Japanese society suffers none of the emotional or physical strain imposed on America by its underclass. From the Japanese perspective, the homeless and the derelicts of New York represent an incomprehensible social failure, giving the city more in common with Manila than with Tokyo. “Compared with when I first came here, in 1964, life in Tokyo is much better,” Clyde Prestowitz, the author of Trading Places: Haw We Allowed Japan to Take the Lead, told me late last year. “Life in New York and Washington is worse.”Not everyone in Japan is well educated or competent, but at most levels of society most people throw themselves into doing their jobs as well as they can, The effect is contagious: after watching gas-station attendants race out to greet each arriving car, or seeing construction workers sweep up around their building site, I feel as if I should rush to my desk, polish my computer, and sit down to work. In practice Japanese politics is not very democratic—seats in the Diet are heavily gerrymandered, and one party is in permanent control—but legally the society is impeccably free.

In the strictly material sense, too, Japan’s standard of living is higher than many countries’, and is on the way up. Twenty years ago many streets in Tokyo were unpaved. Now they are not only paved but full of modern cars. Not all Japanese-made products are as well designed as the country’s exports would indicate—ready-to-wear clothing, for instance, is generally unappealing—but at least once a day I am forced to stop and admire the delicacy and skill with which something has been made. Japan’s department stores are bursting with elegant and super-expensive goods. The riot of advertisements on television, billboards, and subway placards makes this society seem anything but frugal or abstemious. The excitement of Tokyo’s biggest, most bustling districts—Shinjuku, Shibuya, Aoyama, as well as the more famous Ginza—is a kind of materialistic frenzy. Endless streams of people surge down the streets and into the stores, gigantic open-air TV screens run nonstop commercials that look like music videos, and neon signs flash on and off, urging the cash-rich Japanese to buy, buy, buy.

How, then, can anyone call Japanese life mean or hard? Many Japanese have replied with semi-offended astonishment when I’ve raised my “low living standards" question with them; they’ve taken the very premise of the question as a sneer at what they have achieved. In attempting to explain why it’s not a sneer, I’ve come up with three ways in which this ever more affluent country still seems pointlessly austere.

The first is crowded housing, and daily crowding in general. The typical Japanese dwelling is much smaller, much more expensive, and somewhat worse made than its counterpart in Europe or, especially, the United States. The typical Japanese also spends more of his day fighting for survival space in unending crowds. The second is purchasing power. Japanese factories make many products very efficiently, and Japanese exports are famous for giving overseas consumers more for their money. When they spend their yen at home, however, Japanese consumers are shortchanged no matter what they buy. The third is leisure. Certain categories of Japanese— namely, white-collar salarymen and public-school students—have essentially no free time.

The most interesting thing about such “hardships” is the sharply differing conclusions that Japanese and foreign observers draw from them. To me they look like totally unnecessary burdens, and to most outside economists they are all symptoms of an economy biased toward “underconsumption.” To many Japanese, however, they’re part of the broadly accepted social contract that has allowed the nation to succeed.

THE HIGH COST and poor quality of housing are the best-known Japanese problems, and the ones that Japanese themselves are most likely to grumble about. But the grumbling does not appear to be the kind that would lead to a change in behavior. Most Japanese seem to view the tight quarters and high prices as part of their fate, since they live (in the boiler-plate phrase that I have heard times without number) in a “small island nation lacking natural resources.”

Japan’s home-building industry has never had serious foreign competition in Japan itself and does not try to compete seriously overseas; probably as a result, its slipshod quality standards are miles below those of the well-known Japanese exporters who have been toughened in the international marketplace. Houses spring up in established neighborhoods quickly and almost noiselessly: only three or four weeks may go by between the demolition of the old house, with a miniature bulldozer, and putting the finishing touches on the new one—a job done by workers wearing medieval cloven-toed booties. The finished product is not exactly built for the ages. The walls are virtually uninsulated (I deduced this merely by living in our own house, which is newly built and much admired by our neighbors, and I confirmed it as I watched others going up). Wind whistles through many of the window frames. I feel as if I could ram my hand through the typical interior walls of a Japanese house, and I am not famous for my strength. Houses are almost never centrally heated. Newly built ones have individual heating and cooling units in the bedrooms and dining room, with entryways and halls left unheated. Public schools are heated with large, throbbing-hot kerosene heaters in the middle of each room. (This is one of a million indications that the tyranny of product-safety legislation has not yet extended to Japan. On a parents’ visiting day at the neighborhood elementary school 1 walked into my son’s sixthgrade class and saw children cutting plywood with a high-speed, unshielded electric saw that would have drawn a throng of tort lawyers in the United States.) In these close quarters privacy becomes a stylized concept. I sometimes look up from my desk late at night to see the salaryman in the next-door apartment stepping into his ofuro, or deep bathtub. Newly built houses are connected to sewers, but two thirds of Japanese houses still aren’t. In old neighborhoods it is common to see a vehicle that looks like a fuel-oil truck but has a worse smell. It prowls the narrow streets sucking up the contents of individual sewage cisterns.

Some people contend that the quick, light Japanese building style reflects historical and cultural forces. This is, after all, the land of earthquakes, which shake down any rigid structure; and in the pursuit of freshness and purity some famous shrines are torn down and rebuilt every twenty years. I have trouble swallowing this theory, which implies that Japanese homeowners waste their heating money every winter because of a cultural preference for thin walls.

In actuality, a variety of commercial and political forces leave them with very little choice but to live in expensive, inelegant houses on small plots. Japan’s determination to subsidize its high-cost rice farmers means that tiny, inefficient paddies occupy about a quarter of the nation’s nonmountainous land. Tax laws discourage the sale and development of land, and further inflate the price of any land that reaches the market. The cost of land makes the dwelling itself seem a trivial, consumable item. In greater Tokyo the value of a house is typically only a tenth of the value of the land it’s built on. This means that many houses are built to be torn down in a decade or two, which discourages heavy investment in sturdiness or finishing touches. One neighborhood near our house exemplifies the modern “Japanese dream”: brand-new single-family homes, tastefully landscaped on a small scale, many even with carports to hold the meticulously shined Toyotas and BMWs. It would be obvious to any Japanese that these houses represent a tremendous concentration of wealth; a typical house in the neighborhood, with its land, costs several million dollars. Yet most foreigners, passing by, would think the houses attractive but unexceptional. To me, the neighborhood looks like a new development in Silicon Valley, with much smaller lots.

Even the state-corporate partnership that undergirds Japan’s economic success indirectly leads to small, cramped houses. Because face-to-face consultation and coordination with the government are more important in Japan than in the United States, there is much more pressure on a Japanese company to have its headquarters in Tokyo than on an American company to be in New York, Washington, or any other given city. The few major Japanese companies that aren’t based in Tokyo are well known precisely as exceptions. The housing problem is therefore atypically acute in Tokyo and its environs—as it is in Manhattan. The difference is that not even one percent of Americans live in Manhattan, and they are surrounded by much-lower-cost places to live relatively close by. Nearly a quarter of all Japanese live in the Tokyo-Yokohama conurbation, and even with a commute of two hours or more each way it’s hard for them to escape the distortions of the world’s highest-cost land market.

Besides the housing shortage, there is the general atmosphere of crowding that throws outsiders like me into a panic and must wear down even people who have been used to it all their lives. Nanjing Road, the main street of Shanghai, is celebrated by the Chinese as an extremely crowded thoroughfare, but to me it can’t compare in claustrophobic density to any of Tokyo’s big train stations or major shopping streets. Each morning between 7:15 and 8:45 the plat-

forms at my neighborhood train station are patrolled by “packers,” ready to cram extra riders into each passing commuter train. Every train that pulls in is already full, but commuters who need to make a certain train take their places in specified areas on the platform. As the doors open, the first dozen or so people in each line push their way in under their own power, often entering backward and digging with their heels for extra traction. Then the packers take over and wedge in anyone else in line. Two or three times a week I make the half-hour trip to Tokyo on one of these trains. As I stand with my arms immobilized against my chest, someone’s hip jammed into my groin and odd appendages pressed against my other surfaces, I alternately boil with anger and rejoice that I don’t have to undergo this indignity every day. When I get off the train, after giving thanks for my survival and trying to smooth out my jacket and tie, 1 wonder why no one except foreigners seems to think that a rich country should find a less degrading wrav for its citizens to get to work.

My intention is not to examine the roots of Tokyo’s housing and crowding problems but simply to say that they’re not likely to change. All the remedies would involve making frontal assaults on the strongest interests in Japanese politics: changing the tax laws to encourage residential development, driving out the rice farmers, moving the central government away from Tokyo. (Prime Minister Noboru Takeshita often talks about moving government offices to the hinterland, but this seems more like a dream than an actual plan.) If ordinary Japanese had more room to live and play in, they might behave more like consumers in the rest of the world. “I can honestly say there’s nothing I want that I don’t have,” a Japanese journalist friend of mine said one night when we were discussing the Japanese contentment with low living standards. “Oh, come on,” said another friend, a professor. “You mean there’s nothing you want that will fit in your house.” They agreed on one thing: neither will ever have a bigger house.

THE SECOND PROBLEM, Japan’s high prices, is usually misunderstood. Most Western reports about high prices focus on changes in the dollar-yen exchange rate. The typical message is that at 125 yen to the dollar it is very hard for tourists and foreigners to make ends meet in Japan. That is true, but it’s less important than the fact that the Japanese consumer is in exactly the same bind. With the shift in exchange rates, average Japanese and American salaries are now about equal. (Japan’s per capita gross national product is higher, but proportionately less of it is paid out in personal income; the corporations keep more in profit.) The Japanese may not feel the emotional pain that Americans here do as the dollar dwindles in buying power, but the buying power of the yen in Japan has always been pathetically low.

Before my family moved from Malaysia to Japan, last summer, we bought all the supplies we could think of for the upcoming year: tubs of peanut butter, big sacks of rice, new sofas and a diningroom table, bicycles, and clothes. Even after paying for the packing and sea freight, it was all much cheaper than if we had bought it in Japan. (This is a simple bit of prima facie evidence that something other than normal market forces is setting consumer prices in Japan. Our small-scale shipment naturally cost us more than volume importers would pay, but even so our shipped-in goods were well under the local price.) The Organization for Economic Cooperation and Development recently released a report saying that Japanese retail prices were, on average, 70 percent higher than American prices for similar products. The average Japanese spends more on consumption than the average American does (about $13,500 a year in Japan, and $12,500 in America) but ends up with much less. For his money, according to the OECD, he gets goods that would cost an American only $7,800. After four uninterrupted months in Japan last fall, my family made a brief trip to California at Christmastime. We walked through grocery stores and shopping malls first in a stupor and then in a buying binge; it seemed to us that the merchants were giving everything away free.

The basic reason for this imbalance, of course, is the orientation of the Japanese economy toward exports and away from the Japanese consumer’s welfare. Kenneth Courtis, an economist with Deutsche Bank in Tokyo, has illustrated exactly what this bias means. Since 1985 the yen has more than doubled in value against the dollar. If life worked the way economics books say it should, American customers would have to pay much more for Japanese-made products, and Japanese customers would be able to buy American-made goods for much less. But in fact, Courtis showed, neither country’s retail prices have changed nearly as much as they should have, and the extreme shift in exchange rates has made little difference in the trade imbalance. The retail price of Japanese cars and cameras has barely gone up in America, and the price of American products in Japan has barely gone down. The explanation is that Japanese corporations, acting as middlemen, have penalized Japanese consumers in order to preserve their low prices (and therefore market shares) overseas.

This pattern of penalizing the Japanese consumer, through tariffs and cartel-based prices, shows up in hundreds of ways. Because the price of oil in dollars and the value of dollars in yen have both plummeted, Middle Eastern oil costs Japanese importers about a quarter as much as it did five years ago. Very little of this reduction has been passed on to the Japanese consumer who buys gas at the pump. Japanese banks are famous for the low cost of their capital, with which they bankroll Japanese manufacturers and encourage the long-term perspective on building market share. (If your capital costs are lower, you don’t have to worry as much about quick profits.) How do the banks do it? Part of the mystery is explained once you become a bank customer. Japanese banks pay ordinary depositors next to no interest—the local Mitsubishi branch where I reluctantly bank offers slightly over three percent on six-month certificates of deposit—and charge heavily for their services. The equivalent of one personal check can cost from $3.20 to $4.80. It is hard to pass a travel agency in Japan without gritting your teeth in rage. Flying from Tokyo to any destination typically costs almost twice as much as the same trip going the other way. The difference is that flights originating in Japan require tickets bought in Japan, which are priced at deliberately extortionate rates. As ordered by Japanese government regulation, the carriers start with the International Airline Tariff Association fare in ITS. dollars and then convert it to yen at a rate about twice the normal exchange.

The essential fact about this anti-consumer social arrangement, however, is that it has at least the tacit consent of most Japanese. Some analysts argue that the Japanese consuming public has finally had enough, and is about to demand changes in the tariffs and cartel agreements that keep prices so high. Recently I’ve seen two op-ed pieces (translated by the Asia Foundation’s translation service) that were written by Japanese professionals who had served overseas and were shocked by the high prices and bad housing when they returned to Japan. New chains of “NICs shops,” which sell cut-price imports from “newly industrializing countries,” like Taiwan and Korea, have been big hits. Editorialists and occasionally politicians have started to suggest that the Japanese public could enjoy the same low prices that Japanese producers offer customers overseas.

I am more skeptical. It’s not that Japanese consumers are eager to throw their money away: to judge by the way shoppers prowl through the neighborhood supermarket and electronics stores, they are extremely cost-conscious. But there are two major impediments to a more consumer-oriented economy.

One, as with land, is the main force of Japanese politics. Almost all existing moneyed interests, except consumers, benefit from the current system. Corporations get larger profits and are sheltered from foreign competition, because it’s hard for imports to retain any price advantage after they have fought their way through the middlemen and the markups. The full-employment economy, which rests on a featherbedded service sector, is preserved. Japanese manufacturing plants are more efficient than their American counterparts, but Japanese department stores, banks, and shops are heavily overstaffed and inefficient by U.S. standards. They can afford to operate this way—and to keep everyone at work—only because prices are so high.

The other impediment is in the hearts of Japanese consumers. The great majority of them don’t realize what a bad deal they are getting for their money, but I think that even if they were fully informed, most would still support an anti-consumer system like the one they have now. Americans take it for granted that people around the world want basically the same things we do. Let the Russians see Bloomingdale’s and they’ll all want to defect. It is hard for Americans to see the built-in costs of our mobile, capitalist society, which even other capitalists, like the Japanese, may not want to pay. If they had a more open economy, with fewer tariffs and middlemen, the Japanese would enjoy a higher material standard of living, and the world’s trade problems would start to go away. But they would also have to live with the tumultuous effects of real capitalism: frequent layoffs, business turmoil, and similar disruptions that they now generally avoid. In a free choice between that system and one of high prices, full employment, and great stability, Japanese consumers would, I think, choose the anti-consumer social compact, which in turn guarantees an imbalance in trade.

THE THIRDI HARDSHIP of Japanese life is the lack of free time. But this is even less likely than the other two to bring about a major change in behavior.

To most outsiders, the air of drudgery and joylessness is the very worst aspect of Japanese life. Being a Japanese employee essentially means turning your entire life over to the firm during your working career. (If you’re a woman, it usually means working for a few years in your mid-twenties and then finding a nice young man and settling down. After that you raise the children and run the house, maybe taking a part-time job later on. This is a subject for another day, but I’m coming to think that Japanese women, severely “oppressed” by Western standards, actually have fuller and more enjoyable lives than most Japanese men do.) The typical salaryman takes the train into Tokyo at seven or eight in the morning, rushes out for a quick lunch at noon, stays in the office till at least six and often nine or ten, and then is out eating or drinking with workmates for the rest of the evening. He takes the la re train home, falls asleep, and begins all over again the next day. This pattern prevails on weekdays and Saturdays; on Sundays, according to opinion polls, the salaryman’s favorite pastime is “sleep.”The way I’ve put this is partly stereotypical and is no doubt unfair to many individuals. For instance, one of our neighbors is home every night for dinner with his wife and children. Most other men on the street, however, rarely arrive before midnight. Many families in the neighborhood lack a father on even this lodging-house basis. The fathers have been posted to Osaka or Nagoya as “geographical bachelors" for months or years at a time, returning for visits perhaps once a month.

Once or twice a week I take the late train home myself, and feel as if I’m in the middle of Japan’s most depressing tableau. Half the salarymen are redfaced from their beer and whiskey. As many as can rest their heads against the train windows or their neighbors’ shoulders are passed out cold. “Drunk, stunned, slack-jawed, slumped boneless in their seats as though flung there by a mighty hand,” a recent magazine story called “White Collar Zombies,” said about the late train. “Hair like clumps of greasy lichens, arms and legs like canned asparagus, breath like death . . . these are typical Tokyo salarymen.”

Junior high and high school students are broken in to the salaryman’s life with an apprentice version of the same routine. Even my son’s sixth-grade classmates are already in organized activities during most of the day and night. Weekday school hours are about the same as in America, but there’s also a half day on Saturday, and typically, long hours at juku (pre-examination cram school) several nights a week. Our house adjoins a juku, and no matter when I come home from the train station, I can see students through the window, bent over their desks.

To most Americans, all this sacrifice and sweat might seem to be the obvious explanation for Japan’s economic success. With five days of school a week we have an enormous trade deficit; with six they have a huge surplus. I understand this view, since I interpreted Japanese work patterns in a similar way when I first arrived. But I think it is wrong.

In some areas the extra time that Japanese workers put in can be directly converted to extra output. The factory is the outstanding example: Japanese blue-collar workers not only spend more time on the job than Americans do (eight extra hours a week) but also, 1 think, typically work with more dedication and care. As a result of this human difference, plus more-modern equipment, Japanese factories are the most efficient in the world. By extension the same would seem to be true of Japanese schools and offices, but I don’t think it is. The Japanese white-collar world is significantly less efficient than its Western counterpart, and succeeds only because of the brute-force investment of time. Japanese schools and offices finally get a slightly higher performance out of their students and workers than do American schools and offices, by forcing them to commit dramatically greater amounts of time.

In most Japanese offices people are busy-looking but are often engaged in busywork. Office ladies bustle back and forth carrying tea, groups of men sit through two-hour meetings to resolve a minor point, and of course there are the long evenings in the restaurants and bars. Something similar is true of the schools. The children are at school for more hours each week than American children, but in any given hour they may be horsing around, entertaining themselves while the teachers take one of their (surprisingly frequent) breaks, conducting “self-improvement” meetings, or scrubbing the floors during dai soji— literally, “big clean-up.” (Most schools have no hired janitorial staff.)

Obviously, this approach cannot be ridiculed, considering the results that Japanese schools and corporations finally achieve. But the Japanese institutions are effective rather than efficient in terms of output per hour. The human costs of their effectiveness are very high. An obvious cost is fatigue: when I take the night train, I often think of Tokyo as one mammoth ward of battle-fatigue victims. Even on midday trains half the passengers are asleep; in my wife’s English classes, at a public junior high school, two or three of the forty-odd students regularly pass out with their heads on the desk. Before sending my children to Japanese public school, I vaguely thought that six-day-a-week schooling would be a good idea for America, too. Now, after watching their classmates drag themselves through the endless school week, I think Japanese education succeeds despite this policy, not because of it. Working life in America has the same tone only in extreme circumstances: during medical internships, political campaigns, and military combat.

Not even fatigue would be the hardest part of this bargain for most Americans. Rather, the greatest sacrifice in the salaryman’s life seems to be the “opportunity cost”: the near-total lack of time away from work, to do as he pleases. The salaryman’s life is successful to the extent that he sees the company’s (and the nation’s) successes as his own, but he has at most a few hours each week to spend with his family or, as we would think of it, to enjoy himself. If America had the same economic success, at the same cost, Americans would start taking it easy. (This is, in fact, what happens in America, when frugal first-generation immigrants give way to more confident, easygoing children.) I know that many Japanese deeply resent the salaryman’s life. But I don’t think that the overall hard-life bargain is about to change.

There is one practical factor that keeps the salaryman from rebelling: the physical circumstances of his working life. The office is bigger, brighter, and better furnished, cooled, and heated than his house. He can eat in a restaurant and drink in a bar each night, often on an expense account, rather than sit in the kitchen at home. (Several Japanese officials have told me that Japan, with half as many people as America, spends more money on business entertainment.) He has also invested more of his time and perhaps more of his emotion in his officemates than in his wife, and has at least as strong a sense of family at work. Moreover—and this is the important part—by devoting himself to his company he is doing what all his previous life has trained him to do. He is finding satisfaction through the success of his tightly integrated group, and he feels less regret about his lack of free time than a typical American would. From their first days at school, children are taught that the deepest satisfactions come from harmonious participation in a group, not knocking around on their own.

In short, life in Japan is bad in several ways—for non-Japanese. But very little about their predicament makes the Japanese themselves feel that they must change—buy more, sell less, take it easier, behave like consumers in the United States. This illustrates the robustness of their society, but it is another reason to doubt that trade imbalances will be corrected through free trade.

—James Fallows