Japan – here defined as the years after 1989 – faced an unusual set of challenges. Economically, a decade of economic stagnation, originally caused by a changing world situation and poor economic policy, appeared to be infinitely prolonged by political paralysis. Socially, the nation faced a disturbing youth culture, changing roles for women and a rapidly aging older group. Internationally, Japan appeared unable to play the major role that its huge economy might have suggested. Multiple disasters swept the nation, and yet the basic structure of the society remained intact. As Japan entered the 21st century, life still seemed good enough to keep things more or less as they were.

1. Problems Emerge

Shortly after the death of the Showa Emperor (Hirohito) in 1989, his son performed elaborate enthronement ceremonies meant both to reaffirm old traditions and proclaim the new reign era “Heisei” or the “achieving of peace.” Unfortunately the death of the old emperor led not to the desired peace, but rather to debates about his role in the war; one of these got so emotional that the mayor of Hiroshima was badly wounded by a rightist – the day after a year of police protection was withdrawn -- for suggesting that His Majesty should share some of the blame for the atomic bombing of Hiroshima. Equally disturbing to those who wanted to reaffirm a love of the nation was the surge of Japanese to the video stores to seek replacements for their cancelled regular programming. Not all Japanese, it seemed, still found the Imperial family a unifying symbol.

Almost immediately, economic problems struck. As noted in the “Postwar Japan” essay, the world’s major trading partners had agreed in the so called Plaza Agreement of 1985 to try and raise the value of the yen. This, it was hoped, would help control Japan’s huge trade surpluses by making imports to Japan cheaper and exports from that country more expensive. The plan did not work well, partly because Japanese manufacturers were able to buy raw materials more cheaply and improve productivity, and partly because the Ministry of Finance greatly increased the amount of money in the country. The result was a speculative “bubble” in which investors took out huge loans on overvalued property and assets, and stock prices soared. When the bubble finally burst after 1989, the stock market lost two thirds of its inflated value, many new homeowners had mortgages that were way too high and banks were stuck with a huge amount of bad loans.

Political paralysis hardly helped the problem. For decades Japan had been ruled by the conservative Liberal Democratic Party or LDP. Their success had been built on a close alliance between the party, the bureaucrats and big business, and fueled by generous help to rural and small business supporters, a close alliance with the United States and, most crucially, a steadily improving economy. Now a Prime Minister was forced to resign in 1989 because of a bribery scandal; his successor lasted a mere six weeks before the disclosure of secret payments to his mistress drove him from office. The next Prime Minister (Kaifu Toshiki) was honest enough but weak, while the fifth Prime Minster since 1989 (Miyazawa Kiichi) was suddenly in big trouble after his deputy (Kanemaru Shin) was discovered to be hoarding enormous amounts of gold and money obtained from illegal bribes. Like elsewhere in the world, these sorts of scandals were a sad but not unexpected part of the political process. What particularly hurt this time was not only that the LDP politicians were doing well when the rest of the nation wasn’t, but also that Kanemaru’s initial punishment seemed to voters to be way too light.

Fed up, voters turned away from the LDP in July 1993, thereby permitting Hosokawa Morihiro to become the first non-LDP Prime Minister since that party was first founded in 1955. The handsome descendent of an illustrious feudal lord (daimyo), Hosokawa briefly raised Japanese hopes as he campaigned hard for a new election law designed to make the Japanese Diet (Parliament) more responsive to the will of the people. The bill passed, but seemed to have little effect. Hosokawa himself was then caught up in bribery scandal, and felt that he had to resign.

Were this not bad enough, Japan’s vaunted bureaucracy began to show signs of strain. It was awkward that the Ministry of Finance has mishandled the “bubble economy.” Now it turned out that several were guilty of corruption as well. Worse, their plans to kick start the economy by massive spending programs for public works not only did not work – the growth rate stayed close to zero – but also raised issues of pork barrel grants for environmentally unsound construction that upped the national debt to an astoundingly high 123% of the gross domestic product (GDP). Meanwhile a major 1995 earthquake in the Kobe area revealed that some “earthquake proof” buildings and roads were so badly build that they simply collapsed. Rescue efforts were so slow that they may have contributed to the 6,000 plus dead. Symbolic of the problem was that highly trained rescue dogs from overseas were not immediately allowed into the country.

The earthquake problem was in turn related to concerns about the police. As recounted in the “Postwar Japan” essay, a group of so-called “New Religions” had appeared after World War Two to help ease Japan’s transition to a modern industrial state. Now groups known a “New-New Religions” were springing up. Rather than ease the transition to an urban, industrial culture, these groups merited their “new-new” name because they seemed to reject the modern state. Their most startling representative was a visually impaired man who, after failing the highly competitive entrance exams for Tokyo University and being arrested for selling fraudulent health cures, took the name Asahara Shoko and proclaimed the founding of the Aum Shinrikyo or Supreme Truth Cult. Convinced that the Kobe earthquake was yet another sign of foreign plots and danger, Asahara developed the idea that it was moral to kill a sinner. After bumbling police efforts failed to solve some murders of his critics or figure out why poison gas was released in an earlier incident, Aum Shinrikyo on March 20, 1995 released poison gas in one of Japan’s busiest subway stations. 12 Japanese died and more than 5,000 were injured. This was bad enough, but the fact that several of the Aum Shinrikyo followers were well educated people and that some believers stayed in the cult even after the police finally arrested the leaders was profoundly disturbing.

Foreign affairs seemed little better. During the 1990’s, Japan was repeatedly criticized for its failure to apologize appropriately for its actions in World War Two. Conservatives issued history books designed to portray Japan’s military in a better light. Some criticized the War Crimes Trials as “Victor’s Justice,” while others vigorously denied that the military had slaughtered thousands of innocent Chinese in the December 1937 Nanjing Massacre. Outraged opponents pressed instead for a more liberal textbook authorization system, insisted that nations such as Korea had not wanted to be colonies, demanded compensation for the “comfort women” who had been forced by the military into having sex with the troops, and argued that, however imperfect the trials were procedurally, war crimes needed to be punished. Similar to the “culture wars” sweeping the United States at the same time, the debates divided Japanese into those who wanted history courses to create citizens who took pride in their nation, and those who believed that the only way to make Japan great was first to have its citizens learn from the nation’s faults. Behind all this was the question of whether Article 9 of Japan’s constitution should be amended, and hence the military allowed to expand.

A more immediate problem occurred in 1991 when President George H.W. Bush called for a coalition of forces to drive Iraq out of Kuwait. Many LDP members wished to help the United States, yet other politicians opposed both the sending of Japanese troops overseas and the notion of solving problems by war. In the end, Japan contributed over $13 billion dollars and a few minesweepers to the US effort, but wound up being criticized for its political bickering and general indecisiveness. As the debate continued, legislation was passed in 1993 allowing Self Defense Forces troops to help bring peace in Cambodia, and Japan expressed firm support (but not troops) for the war on terror and the 2003 invasion of Iraq. Echoing trends common to most countries outside of the United States, the general public was far more conflicted. By 2004, however, the Japanese did (after a good deal of popular protest) send a small detachment of military engineers to Iraq when President Bush’s son, George W. Bush, occupied that country.

Major problems with North Korea were more frightening. Japan could not but feel guilty for its historic mistreatment of Korea during its militarist period, and for its continued prejudice towards Koreans who still lived in Japan. Now they had to face a Stalinist North Korean regime that had decided to develop both a nuclear arsenal and a missile system capable of easily hitting Japan. The Korean crisis led conservatives to call once again for building up a military strong enough to deter threats. Progressives advocated talks aimed at soothing Korean fears that they would invaded by United States efforts to end an alleged “Axis of Evil.” Here again, Japan seemed to have only a few foreign policy options.

2. Social Changes

Behind all these problems lay the grim fact that the world had changed since the basic factors mentioned in the “Postwar Japan” essay’s explanation of Japan’s “economic miracle” first brought high GDP growth. Japan’s favorable geographic location, for example, was obviously still there, but other Pacific Rim countries – particularly China – were now taking advantage of the ample raw materials and rich markets of the area to export high quality goods. Cheap, imported technology was no longer available and markets were less open. The exchange rate was down, and Japan’s once vaunted industrial combinations (keiretsu) now seemed too rigid to respond to the demands of a rapidly changing economy. Worst of all, Japan’s population, once concentrated in the working age group, was now rapidly aging. When trying to plan how to try and help the economy out of the recession, the government also had to think about how it could take care of the very generation who had created the modern economy.

The aging of Japan’s society reflected profound social changes that were also taking place at this time. In the postwar period, Japanese women had been expected to graduate from high school or a junior college (rather than a more rigorous university), take a part time job until marriage at around 25, and then become both a mother of at least two children and a caretaker for her husband’s aging parents. Now Japanese women were eager to have a good education and, often, a career. They were claiming for themselves pre-marital sexual experiences once denied to “nice girls,” marrying later (sometimes not at all), and, though still at only one half the rate of United States couples, doubling the divorce rate. Government planers found it most worrying that this generation of women was having far fewer than 2 children, and hence not replenishing the nation. Given that older Japanese now had the longest life expectancy in the world, bureaucrats calculated that the number of workers per retired person would drop from an average of over 4-1 to as low as 2-1. How, then, could the government get workers to put enough of their wages into the rapidly depleting pension funds? Who would provide sympathetic home care for the aging? If public facilities were needed, how could they be paid for in a time of economic recession and heavy public debt?

Compounding this problem was a perceived crisis in education. As noted above, Japanese were shocked to discover that some of the scientists making the deadly gasses for the Aum Shinrikyo religious group were graduates of elite national universities; passing these tests had always been taken as a sign not only of ability, but also noble character. At lower levels, school bullying (ijime), refusals to go to school and even assaults on teachers, although low by American standards, were worrying. Ironically, just when US educators were trying to figure out how to raise K-12 standards, their Japanese counterparts were trying to lighten up the curriculum, tone down the rigorous college entrance exam requirements and end required half days on Saturday. The hope was to make school more enjoyable and from that, more creative. Unfortunately, many of the most ambitious students simply used the extra time to focus their studies on what was still needed for admission to a prestigious university.

Meanwhile a counter culture appeared to be developing. Newspapers spoke gloomily of “free workers” (furita) who only worked for as long as it took to get enough money to take time off and have fun. Other stories spoke of “compensated dating” (enjo kosai) a system under which some young female students, eager have enough money to buy the latest clothes and other fads they wanted, went out on paid dates – and often had sex – with older men. Even the girls (let alone the men) from seeming stable and relatively well to do families seemed to have trouble imagining that there was anything wrong with this casual barter of sex for material goods. Conversely, people who might be called “computer nerds” in the US or “stay at homes” (otaku) in Japan seemed to prefer sitting in front of a computer to having more personal interactions; indeed, some blamed the extraterrestrial fantasy, paranoia and violence of Aum Shinrikyo on the baleful influence of Japanese comics (manga) and animation (anime) videos. With juvenile delinquency rates up, GDP figures flat, official unemployment reaching at least 6%, “permanent employment” for elite males in good firms less assured, corporation executives forced to apologize publicly for corporate misdeeds and political figures unable to affect real reforms, Japan hardly seemed to be a happy place.

3. Making It

To focus on these gloomy stories, however, ran the danger of missing the positive side of contemporary Japan. Times might not be that good, but they were also not that bad. Japanese were not alone in living in a troubled world of terrorism and violent crime. Statistically the ie or traditional, multi-generational family was declining as a percentage of total families, divorce rates were rising slightly, women were marrying later or not at all and a few cases of parental neglect made for dramatic news stories the news, but overall, Japanese still showed strong affection for the family and a warm commitment towards personalized old age care. Japanese were living longer than any other people on earth. They had higher literacy rates, good health care, improving pensions and levels of street crime that were still low by US standards. If some had trouble apologizing for a tragic war, many Americans also felt themselves to be victims, rather than villains, of controversial wars such as Vietnam. Youthful antics worried older folks, but this was neither the only time in Japanese history nor the only country in which the aged worried about the excesses of a few of their successors. Economic indicators only slowly rose, but most Japanese were generally satisfied with their jobs.

What needed to be stressed, then, was that while Japanese were worried about the nation’s future in an unsure world, life as a whole was not that bad. Surely part of the reason why Japan continued to stumble along on its old ways was that there was not yet a consensus for radical reform. If such a consensus ever emerged, the proven Japanese ability to respond might bring yet another great period of change.