Bending Adversity: Japan and the Art of Survival (21 page)

Koizumi wanted to bolster the power of politicians by engaging the public more actively. For years, bureaucrats had been so powerful and
skilful that politicians had been considered something of a sideshow. As in the British comedy
Yes Minister
, in which Sir Humphrey, an articulate and deliciously crafty bureaucrat, runs rings around his supposed political masters, so Japanese politicians were considered little more than front men. New foreign correspondents were sometimes advised by old Japan hands not to bother reporting on politics at all, since real decisions were made deep in the bowels of the bureaucracy. That view was a little overstated. Japanese policy had always been the product of a complex tug-of-war between bureaucrats, politicians and business. Koizumi’s achievement – half rhetorical illusion and half substantive – was to render that policymaking process more open. The matter up for discussion in the 2005 election, among the most dramatic in Japan’s post-war history, was the apparently dry subject of postal privatization. Were you for it, or against it?

For Koizumi it was not a dry subject at all, but an obsession. For him, the post office was a symbol of all that was wrong with modern Japan. The institution had its roots in the Meiji Restoration. When the leaders of the new government were casting around for ways of uniting the country, one of the things they hit upon was a universal postal service like that of Britain. Rich merchants were asked to donate land on which post offices could be built. Former samurai, their top-knots cut and swords confiscated as part of Meiji’s sweeping modernization, were offered jobs as postmasters. In return, they were given generous stipends, tax exemption and the right to hand down their position like a feudal title. Those privileges remain largely intact today. Even in central Tokyo, let alone the countryside where post offices hold most sway, postmasters are often third or fourth generation.

Delivering letters was only part of it. The post office gradually evolved into Japan’s biggest savings bank and provider of life insurance. In 2005, its savings and insurance assets amounted to an astonishing Y360 trillion ($3.3 trillion), about a quarter of the vast savings pool amassed since the war by thrifty households. That made it, by some measures, the biggest financial institution in the world, more than twice the size of Citibank. The pool of savings had proved incredibly tempting for economic planners, who recycled the money to chosen industries. The Liberal Democratic Party directed the
savings, via a web of semi-state bodies, towards public works programmes. It had also been tapped to fund the ‘second budget’, a murky pool of money administered by the Fiscal Investment and Loan Programme that Koizumi was trying to kill off. Post office cash was, in short, the grease that oiled the Liberal Democrats’ re-election machine. The post office’s 280,000 full-time employees – more than those serving in Japan’s army, navy and air force combined – could mostly be counted on to vote for the party and to get out the vote of friends and family.

All this made the post office the embodiment of the money politics Koizumi had promised to destroy, the most sacred of the ‘sacred cows’. His advisers told him that privatization would unleash pent-up market forces by allowing the vast postal savings to be allocated, not according to the whim of pen-pushers and politicians, but according to market rationale. Getting rid of the state-controlled piggy-bank could also force the government to live within its means. Koizumi saw postal privatization not only as an end in itself, but also as a symbol of his determination to tear down the old Japan. When I interviewed him on the subject in his sleek office, Koizumi compared postal privatization to the sacking of an impregnable medieval fortress. ‘Osaka Castle is surrounded by moats,’ he said, smiling enigmatically. ‘If you want to attack the headquarters, you have to attack the outer moat first, fill it in, and then attack the inner moat. The postal services are the outer moat.’
³⁵

For Koizumi’s opponents, including the rebels within his own party, the post office was much more than a moat. Its 24,000 branches played a crucial social role, they said, particularly in remote areas that had been abandoned by young people and left to the elderly. I travelled by train to one such district in the mountainous Yamagata prefecture in northern Japan where the snow can be metres deep in winter. In that rugged, sparsely populated environment, it took Yoshihiko Suzuki, an earnest 42-year-old postal worker, one hour to deliver letters on his red-and-white moped to just four remote houses. His entire route consisted of only fifteen homes. At each residence, almost all of which were inhabited by elderly people, some living alone, he would pop his head around the door to ask how they were getting on and offer to bring them shopping. The town mayor, who saw Koizumi’s privatization as an assault on Japan’s social fabric, said, ‘In these parts, the postman is more like a welfare officer. Elderly people who
can’t walk into town wait for the postman to visit and he calls out, “Is everything all right today grandma?”’
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For the post office’s detractors, Suzuki’s work was a dreadful waste of money the state could no longer afford. For its supporters, it was an indispensable public service, the essence of a caring society. Even in the cities, the post office was a well-loved institution famed for its reliability. In the year Koizumi announced its privatization, for every one million letters delivered, only eleven were misdirected. The equivalent figure in Britain was 7,000.
³⁷
An expert on the post office described the debate thus, ‘One vision, represented by the postal lobby, places great store on state paternalism, informal social welfare, risk avoidance and predictability. The second [represented by Koizumi] champions the virtues of globalization, small government and self-responsibility.’
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Shizuka Kamei, a grandee of the Liberal Democratic Party and a leading ‘postal rebel’, saw things even more starkly. In trying to destroy everything that was good about Japan, he said, Koizumi was worse than Adolf Hitler.
³⁹

Whatever people thought about postal privatization, there was huge public excitement about the election. Koizumi had depicted it as a fight to the death over the future direction of Japan. Noriko Hama, a professor of economics who was no great fan of Koizumi, nevertheless admired the choice being offered. ‘This is a marvellous moment, something for which Japanese democracy has been waiting for half a century,’ she told me. ‘In this election, people have to say what they mean and mean what they say. They can’t get away with being wishy-washy. This is something unprecedented in Japanese politics.’

The election, of course, went Koizumi’s way. After he set out the choice, opinion polls began to shift dramatically. From being an issue to which Japan’s public gave scant thought, postal privatization was suddenly elevated to its number one concern. The rationale seemed to be: if it meant so much to Koizumi it must be important. Throughout the campaign, fought under the slogan ‘Don’t Stop Reform’, Koizumi never once allowed the opposition to distract attention from his chosen central issue. He brushed aside any attempts to talk about the mountainous public debt, the parlous state of pensions or the diplomatic imbroglios into which he had led the country. As far as Koizumi, the master of ceremonies, was concerned, the election was about one
thing and one thing only: the post office. The result was an overwhelming victory. Voters turned out in the highest numbers for years and Koizumi’s party won a landslide of 296 seats, giving it a two-thirds majority in the powerful lower house of parliament. That made it the biggest victory in the party’s more than fifty-year history.

The following month, parliament duly passed a bill to split the post office into four units: savings, insurance, mail and counter services. By 2017, some way off even by Japan’s careful standards, the state would run down its holding in the banking and insurance businesses to nothing, completing the privatization. It would retain ownership of the mail and counter services. Many of the ‘postal rebels’ had lost their seats to Koizumi’s ‘assassins’, who now became known as ‘Koizumi’s children’. Some of the rebels who had managed to get re-elected as independents crawled back to the Liberal Democrats. They swallowed their pride and voted for Koizumi’s hated bill. Kamei, the man who had likened Koizumi to Hitler, won back his seat standing for a new party. He was not so easily cowed. ‘If things keep going like this, this will be the end of Japan,’ he proclaimed darkly.
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Koizumi said with his customary directness, ‘We’ve destroyed the old Liberal Democratic Party.’
⁴¹
The party of factions, money politics and rural patronage was gone, political analysts said. In its place had emerged a new organization that was more responsive to the floating urban voter, with a mandate to change Japan. The legislature appeared to be at Koizumi’s feet.

It was at precisely this point that Koizumi seemed to lose interest in the fight. The euphoria of the postal election turned out to be the high point of his premiership. Many expected him to use his newly won authority to push through the radical programme of deregulation and spending cuts he had so long advocated. The prime minister himself stoked expectations that he was about to embark on a Thatcherite crusade. At a press conference following his electoral landslide, he said, ‘We’ve heard the people’s voice in favour of structural reform. We will not stop, but will press on.’
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He seemed to have
carte blanche
to do anything he liked. Instead he spent another rather inconsequential year in office and then declined to seek re-election as party leader. His popularity meant that he could, perhaps, have stayed on for several more years. Instead, he quietly departed.

Minoru Morita, a left-leaning political commentator, said Koizumi’s actions betrayed an intellectual shallowness. The usual view, he once told me, was that Koizumi had a grand vision but, opposed by reactionary elements within his own party, lacked the political clout to enact it. The anti-climax after Koizumi’s triumphant victory suggested exactly the reverse. ‘Koizumi has skilfully raised his popularity by waging battle against the forces of resistance,’ he said. ‘But now that he has secured power, he doesn’t know what to do with it.’
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Gerald Curtis, professor of political science at Columbia University and one of the shrewdest observers of Japanese politics, said the same. ‘Koizumi has not said what he will do after postal privatization because he doesn’t really have a clear agenda of reform,’ he said shortly after Koizumi’s electoral triumph. ‘He’s going to be scrabbling around figuring out what to do for an encore.’
⁴⁴

In the event, there was no encore. Koizumi simply left the stage like a rock star with the sense to quit with his popularity at its zenith. In some ways, it was a heroic gesture worthy of a ‘kabuki premiership’ in which spectacle had been such a vital element. Koizumi retired, to enjoy Italian opera and – if the gossip magazines were to be believed – a series of younger girlfriends. Much of this was pure speculation, though one businessman who entertained him at a high-class restaurant told me with a strange precision, ‘60 per cent of the time he talked about sexy things’. Yet the truth was that, for a figure who had loomed so large in the public imagination, little was known about his private life. Koizumi kept to himself, rarely giving interviews or making public pronouncements. After a premiership of drama and impassioned rhetoric, he simply shrank from view. The rest really was silence.

•   •   •

Once Koizumi was gone his party reverted more or less to norm. Politics returned to its old, unstable ways. None of his shortlived successors had anything like his charisma, undermining the idea that the Japanese electorate would never again tolerate a colourless time-server nominated by party grandees. The public also turned against Koizumi’s neo-liberal agenda. His emphasis on light regulation and the wisdom of markets became less fashionable in the years after the 2008 Lehman crash. There was nostalgia for Koizumi the man and for Koizumi’s style of leadership, but not many people appeared to
miss his policies. In particular, he was blamed for exacerbating the gap between rich and poor and creating the so-called
kakusa shakai
, the unequal society. His policies were said to have produced a harsher, dog-eat-dog Japan of winners and losers. Masahiko Fujiwara, the author who pined for the communitarian values of feudal Japan, criticized Koizumi for ripping the fabric of society. ‘Koizumi is reform, reform, reform,’ he told me. ‘But of course reform does not necessarily mean improvement. Sometimes it means deterioration.’
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It is true, as we have seen, that, on some measures, the gap between rich and poor had widened, although at a probably slower pace than in many advanced countries. Still, people’s perception was of greater income inequality thanks to the introduction of merit-based pay and, especially, the decline in the number of full-time jobs. Studies showed that the Gini coefficient, a measure of inequality, was not that far behind the US, a society many Japanese regarded as ferociously unequal and the antithesis of Japan’s more egalitarian values.
⁴⁶
In the last year of Koizumi’s term, a survey in the
Nikkei
newspaper showed that only 54 per cent of Japanese considered themselves middle class, with a once unthinkable 37 per cent classifying themselves as lower class. For much of the post-war period, three-quarters of Japanese had consistently described themselves as being in the middle class.
⁴⁷
During Koizumi’s time in office books on the phenomenon of inequality, such as Atsushi Miura’s
Lower Class
Society
(
Karyu Shakai
), became bestsellers. There was also a rush of books advising people how to live on a meagre Y2 million a year, less than $20,000 at the time. ‘Many Japanese have preferred a society of equals to one where people freely compete against each other,’ said Yoshio Higuchi, a professor at Keio University. ‘Analyses that show social and economic disparities widening have shocked the people.’
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