Coming in from the cold war; to make the American economy competitive, we have to shake off our longstanding political, educational, and psychological hang-ups.

• Author: Halberstam, David

COMING IN FROM THE COLD WAR

The years of the Vietnam war--1965-1976--cover the true surge of the Japanese economy. My clearest memory from 1967, pre-Tet, was of thousands of Americans wandering around Saigon in combat gear and hundreds of Japanese businessmen in their civilian clothes doing business in the city's best hotels and eating at the city's new Japanese restaurants. What seemed like thousands and thousands of young Vietnamese men and women were riding around on Honda motorbikes. There was only one conclusion: We were obsessed with the Cold Ware and then the hot war, but the Japanese were obsessed with commerce.

One incident will suffice to show the different visions of the two nations at that moment. It was a conflict that took place within the small American business community in Tokyo in the mid-sixties. Frustrated senior American businessmen there complained to their embassy that the Japanese, who they knew were in the midst of a prolonged boom, kept their own markets closed, even as they set their sights on exporting their way to becoming a world-class industrial superpower. The top diplomats at the American embassy barely listened to them. They had a different agenda for Japan, one set in Washington by the people at Defense and State: to use whatever leverage we had in Tokyo to keep the Japanese lined up as a rhetorical ally during Vietnam,using all our influence to get them to do what they were going to do anyway. The commercial attache at the embassy, who represented the American businessmen, did not have the clout to change the decision. The Japanese, as the saying then went, had to be kept on the team. At the moment we had maximum leverage in Japan, we wasted it. It was an odd collision of perceived national interests with real national interests, and perceived national interests always won in the Cold War.

It was as clear an example as I can think of to show the difference between Japan and the United States: We, the culture of affluence, with our abundant resources, were a political society; the Japanese with their difficult, inhospitable conditions, were, involuntarily, an economic one. Our national security complex was composed of the State Department, the CIA, and the Defense Department. Our Commerce Department was a minor player in foreign policy decisions. Their national security complex was an economic one, with the Ministry of Finance, the Ministry of International Trade and Industry, adn the Ministry of Foreign Affairs as the chief players. Their job was to monitor first and foremost Japan's economic relations with the rest of the world, or, perhaps more accurately, its political relations as determined by its economic interests. In Japan, wealth has to be renewed each day by the nation's most talented people. Politics is a secondary business, and that means journalism is a tertiary business, it being a field derivative of politics.

Bloc heads

I do not think the Japanese ever thought in terms of a Capitalist bloc or Communist bloc. They thought, as befits a nation where the sense of nationalism is so powerful, always of the greater good of Japan. Their economy in the end represented a form of state-guided communal capitalism. While the communal society failed in Eastern Europe because it was an equal misery distributor instead of an equal benefits distributor, it succeeded in its capitalist manifestation in Japan. There it fit the historic needs and traditions of the country, a poor land where, if the rewards were too great at the top, the poverty would be too great at the bottom. There was nothing very ideological about modern Japanese capitalism, for the Japanese had the most pragmatic of societies. Everything was based on the best use of a nation's limited resources. Like the citizens of most nations, the Jjapanese might be prisoners of their own national myths, but they were never prisoners of ideology.

The key to understanding Japan for Americans is understanding how Japan's ungenerous condition affects its national psyche and its politics. If Japan is a democracy, it is a democracy with a condition that is, for a people aspiring to national greatness, essentially authoritarian. The harshness of its condition and the broad public acceptace of the limits it imposed set the limits of contemporary freedom in Jjapan. Whereas we in America, in our endlessly bountiful land with its essentially comfortable climate, were conditioned to think that there would always be more, the Jjapanese grew up in a country where the very nature of the land suggested that there might easily be less. Anyone in Japan who uses too much, whether it be food, or money, or personal freedom of speech, is not merely perceived to be taking too much from the nation but is presumed to be taking it at the expense of others. These limits are set not merely in the case of natural resources but in terms of personal freedoms. Japanese culture carries inherent standards of sacrifice.

I do not think of the Japanese as a nimble people. Subtle, perhaps, but not nimble. They have the most rigidly hierarchical system I have ever seen. Above all, Japan is not a society where people rely on instinct. Everything is carefully considered. Often it is considered better not to act than to act precipitously. A simple answer form an ordinary person im middle management is often hard to get. A great deal fo effort goes into not making a mistake. But if the Japanese are not nimble as people, they nonetheless have a nimble economy.

They have an extremely sophisticated upper bureaucracy, a well-motivated, well-educated work force, and enormous capital resources. Thus, as the world economy changes, they can adapt and shift talented people from one field to another, and they can shift capital reserves from one field to another. In the past decade, they have moved the thrust of their economy from core industries to high technology. In the past two or three years they have slightly slowed the rate of their capital reinvestment and have greatly increased their investment in the critical factor for success in high technology: R&D. All this is done with some measure of guidance from their high bureaucracy.

The Japanese are not a very sentimental people. They believe that it may be all right in a country as inherently wealthy as America to make mistakes and not to worry about long-range planning, but they also believe that for them a failure to plan, to sense the future, would be fatal. Japan is not a nation that likes surprises.

Because Japan is economically oriented, its most talented young college graduates aspire to serve the nation by working in the high bureaucracy on economic matters or for the nation's best companies. When I recall the most celebrated Japanese figures of the postware era, I see Soichuro Honda and Akio Morita, not any of the nation's politicians.

Nobody's business

In America, much of the energy of the society has gone into a politics that has focused largely on determining America's path in the Cold War (in the Kennedy cabinet, for example, all the good jobs were perceived to be in foreign policy and national security). Likewise, the journalists of the postware generation, men and women now in their fifties and early sixties, were by and large economic illiterates (I include myself before I took what was in effect a six-year crash course in trying to define why the Japanese challenge to the American core economy had been so successful). Our best reporters came...