Japan Is Not So Unique Anymore

This will be the first piece on this blog that is not dedicated to sumo or statistics. Instead it will focus on the recent election in Japan and the larger implications of that. If that does not interest you then no worries, and the sumo and statistics should resume in the next piece.

Japan is alone as far as I am aware in being a liberal democracy with free and open elections, and despite that having more or less one party rule for the past 60-70 years. This is a simplification of course with two brief periods in the early 90’s and late 2000’s of an opposition led government before quickly reverting back to the Liberal Democratic Party (LDP). Furthermore, these have not been solely LDP governments with the more recent coalitions featuring Komeito. Nevertheless, the July Upper House elections in 2025 might very well mark the end of an era for Japan.

That over the past 4 decades the LDP has held power for about 35 of those years might come as a surprise given that it coincides with the popping of the Japanese economic bubble and subsequent “Lost Decades” of essentially nonexistent growth. Part of the pitch of liberal democracy is that when things aren’t working - and the economy and rising living standards are most paramount things in voters minds - it possesses the dynamism to change things up and course correct with a new political regime.

But perhaps there is a pragmatism to the Japanese voter. In those 3-4 decades of economic stagnation a multitude of different measures have been tried and all failed to effect the meaningful jolt to GDP growth they were designed to. Stimulative low rates failed to spur growth. Just about every form of fiscal stimulus has been tried at some point or another. Business culture has shifted towards less loyalty to employees to their chagrin without compensating for that greater risk borne by employees leading to large scale gains. Richard Koo’s explanation of the “balance sheet recession” - that companies themselves took a long time to recover from their debt binges in the Go Go years of the 80’s thus neutralizing aforementioned stimulus packages - is analytically useful. Yet unless those companies stayed in that balance sheet recession since the bubble burst, then it still fails to fully explain sluggish economic figures.

There’s an old joke that there are four types of countries: developed, non-developed, Japan and Argentina. The joke is that economists can explain the developed and non-developed but Japan and Argentina are just inscrutable. I studied economics in college myself but I tend to think of it as a rather useless (and more ideological than scientific) field in part because of the failure of any economist to be able to “solve” Japan¹. The point I’m making is that the LDP seems hard to blame for Japan’s continued economic stagnation when there’s little reason to think anyone else would have been able to solve this problem. In that light, their continued electoral dominance is easier to explain.

Even with this story in hand, Japan stands apart from the rest of the world in the LDP’s continuity. As I survey the global landscape, democracies and autocracies alike face problems they seem unable to solve and suffer at the ballot box or in public opinion respectively as a result.

I could easily go in on the impotence of the UK Labour party and how quickly they shifted from winning large majorities (albeit due to a splintering of the right thus flattering their “success” at the ballot box) to feeling like a doomed government merely waiting for the far right to take power. But European impotence as a whole is easy to characterize with the Ukraine War. It was supposed to be the sort of wakeup call to arouse the sleeping giant of European defense spending. And while there have been marginal shifts, as a whole the strategic European autonomy that French leaders have dreamed of (with them in charge of course) and subsequently done little to actually effect since the end of World War 2 remains an ever distant dream. Even with Trump in office again - who has not only downplayed the idea of NATO as a whole, threatened fellow NATO member Denmark, and is perceived as more pro Russian based on his rhetoric than his continued weapon transfers to Ukraine show in practice - there is little appetite for taking the European project beyond its economic remit. This can be easily explained by many of these European leaders facing domestic challenges as they face a resurgent far right spurred by an inability to satisfactorily deal with immigration, youth unemployment, and dim economic prospects.

This inability to satisfy domestic audiences is hardly a uniquely European issue. I confess Africa is an unfortunate blind spot in my knowledge of the world, and yet in that meager familiarity I’m unaware of any countries where citizenry is not only happy with their government but that same government feels in charge of their future. If we take our survey to Latin America the story is hardly different with a couple of exceptions that I’ll address later on. Gustavo Petro is a useful example. Colombia a few years back under most definitions elected for the first time in its history a left wing president in Petro. That this would finally happen is evidence in part of the inability of governments to satisfy constituents leading to such a radical break with history. Petro’s subsequent floundering in power can be chalked up to marginal competence, but in this case points to the larger structural impotence of global leaders across the political spectrum to deal with today’s challenges.

Back to Asia we can see two countries with some of the highest state capacity in the world in South Korea and Japan who have failed to increase their birth rates even as they approach levels that some might call existential. This is hardly a rigorous scientific paper, but hopefully I have shown that there seems to be a theme of leadership worldwide not only unable to enact change in the way they seek, but furthermore a failure to manage the expectations of the everyday people as they deal with those shortcomings.

So where might we see the the counter-examples? Modi of India has managed to retain his popularity by delivering well enough on the economic front while simultaneously taking advantage of the BJP’s organizational prowess and raising the salience of Hindu nationalism. The latter part (albeit just nationalism, not Hindu) has been characteristic of many upstarts trying to regain a sense of national control. Is the organization the secret sauce? China with its massive CCP apparatus and membership alongside the United Front might suggest so. But even in both these examples, the popularity is there and yet India still faces questions why they can’t grow like China and China deals with youth unemployment and their own failure to combat low fertility.

With that I end on two further possible countries we could plausibly say are “in the driver seat of their own country” and also popular. El Salvador is a rather easy one to dispense with. Nayib Bukele comes across as swaggering, and by putting large swathes of the country’s male population in concentration camps, crime has abated for now officially. However, given much of this is built on backroom deals with the very gangs he’s “combatting” it hardly feels appropriate to see him as a man of destiny. In fact, his erosion of civil society and legal bounds in many ways feels like him getting ahead of the backlash as the memory of the crime wave fades in the distance but fundamental problems remain unaddressed.

This leaves me with just Mexico. In many ways Mexico stands out for appearing how we actually would expect politics to work. After multiple corrupt neoliberal regimes, Andres Manuel Lopez Obrador finally attained his long sought prize of the presidency. He moved quickly and decisively to curtail apparatchiks paid more for their resumes and social class than for actual results in the bureaucracy. Simultaneously he enacted reforms that rapidly increased the economic standing of those worst off in society. They have consequently richly rewarded his Morena coalition at the ballot box leading to his successor Claudia Sheinbaum winning the presidency with margins few but dictators could dream of.

I think that’s a good stopping point for our global survey. Mexico is a terrific example because even as I recount their domestic successes, it’s hardly as if they don’t face challenges in the near abroad with Trump threatening tariffs. And yet, and it is early days still, Sheinbaum and Morena do feel as if they are authors of their own destiny in spite of that. They continue to push through large scale reforms, and broadly those reforms seem supported by the average citizen. Looking across the globe they seem unique in that way that they identify problems and seem able to address them and please constituents in doing that².

A little while ago we discussed the inability of Japan to get economic growth going despite a myriad of different approaches. That impotence in the face of such large scale challenges is in my opinion hardly unique as recounted above. But what was unique was that in spite of those challenges the LDP was able to hold on to power. Perhaps the LDP being unable to win at the ballot box anymore is the politics catching up to the economy and perhaps in that way Japan is becoming less unique and more like the rest of the world.

Addendum

This is a sumo and statistics blog but I do have the idea for a blog focused on East Asia in particular. I actually studied China as much as statistics in college (and more successfully) and Chinese the language much more than stats. The goal would be to rotate between China, Japan, Koreas, and Taiwan and try draw out and impart larger picture observation and information as opposed to being a pure link dump and news recap. Hopefully discussing how this election could signal a shift in Japanese politics is a teaser of deeper insights. I speak Chinese pretty well, Japanese less well and Korean essentially barely at all. As such, this project is likely 2 years off as I think being able to engage with local reportage and netizens is important³.

Further Addendum

I alluded to it earlier, but China does indeed face many problems. I think in many ways, it’s more interesting analyzing where Xi Jinping (or the Chinese state as a whole) is constrained vs where they are able to implement their will; the financial structure of the state and the tax and revenue of the Central Government vs Provinces and their genuine Green Revolution respectively. I’m a terrible pedant so I tend to think everyone more bullish on China than I is a wide eyed optimist and depending on their politics, naive and everyone more bearish on China than I a sufferer of motivated reasoning on why NATO needn’t fear Chinese hegemony and possibly a Sinophobe⁴. I have been banking some China related book reviews and some writing on it and Japan too so look forwards to it. I’m excited to share these thoughts.

1. Among myriad other problems they can’t solve. I will give them a bit of a soft out for Argentina where I think a lot of the issue is an overreliance on poor historic GDP estimation which has Argentina reckoned as a world leading economy at the beginning of the 1900s. There is good reason to be skeptical of those figures and if you remove the assumption it was on par with leading economies at one point, suddenly its current status and economic history as a whole makes a tremendous deal more sense.

2. Funny enough, re-reading this prior to publication I recalled another potential example. It is another Latin American country in the Dominican Republic. Luis Abinader has unleashed growth and popularity in his country in a genuinely impressive way as far as I’m aware. I confess less familiarity with Dominican domestic politics, but funny enough there are certain parallels to AMLO in them both being perennial candidates and being able to grow their base in power. That said, I think that the larger point stands: governments globally feel impotent and unpopular in a way that we might not have seen since a century ago in the Great Depression. Certainly an unfortunate parallel, but we mustn’t let similarities blind us to differences.

3. A joke of mine is that you shouldn’t have to speak a language to be able to analyze a country. There are tons of people that speak English whose analysis on America you shouldn’t trust. That said, in practice it’s never a good idea to listen to someone analyzing China that doesn’t speak Chinese. It honestly never fails that non-Chinese speakers give terrible analysis of China.

4. I joke, mostly