Last summer’s convulsions over money and political reform in Japan tore apart the ruling Liberal Democratic Party and brought down the government. In the months ahead, as Prime Minister Morihiro Hosakawa consolidates the first non-LDP government in 38 years, and opens up the prospect of a new direction for the country, the debate is certain to move beyond narrow issues of politics and process to the deep wellspring of dissatisfaction with the overall quality of Japanese life. Much of that debate will be framed by the ideas of management consultant Kenichi Ohmae.
In the political turmoil of 1993, Ohmae has offered a more systematic, more integrated – and more radical – critique of Japan than any of the country’s elected officials. His complaint is fundamental and sweeping: the Japanese people are working too hard, and living too meanly, in the service of a mercantilist economic ideology that can no longer guarantee success in the international economy.
“Japan has the potential to be a much better country,” says Ohmae, chairman of McKinsey & Co. in Japan, a best-selling author there and in the United States, and one of the world’s best-known corporate advisers. “The numbers in the economic statistics have been great. But life has not been too great.”
Ohmae’s blueprint for change would reverse virtually the entire direction of Japanese policy since World War II. For years, he has urged corporations to decentralize to meet the demands of the global economy. Now he is proposing to remake his country along the same basic principles: openness, de-bureaucratization, delegation of authority.
Last fall, Ohmae launched a citizen’s movement to carry these ideas from his legal pad into the law of the land. He concedes this is a large undertaking, and he doesn’t want to be considered unrealistic. So he has given himself 12 years to tear down Japan and rebuild it from the ground up.
Like Ross Perot – to whom Ohmae loathes being compared – Japan’s most famous consultant is an unlikely tribune of the masses. Educated at MIT, a former nuclear engineer who joined McKinsey in 1972, Ohmae is known in the United States as the author of high-impact books and articles on corporate strategy, and in particular as a guru of globalization. In Japan, he has a much broader identity. In a society virtually devoid of public intellectuals or social critics, he is both. Over the past six years, his books on reforming Japan have sold close to 2 million hardback copies, making him one of the country’s best-selling and most influential authors.
Not influential enough, though. When each new book hit the stands, Ohmae says, the sitting prime minister would flatter him with a meeting to discuss his arguments. “Nakasone, Takeshita, Miyazawa, they all read my books, they all asked me to give my point of view,” he told me. “I was a fool to believe those guys would actually do it. But they were so sincere. They would give me a call and say, `Ohmae-san, what should I do about this?’ And you feel, as a consultant, very good. You are spitting out your wisdom, they are taking notes. But they just want to take advantage of good ideas without implementing the fundamentals.”
Ohmae’s frustrations finally boiled over and he took action. His organization, called the Reform of the Heisei, has twin goals: to build a nationwide constituency for reform and to elect Diet members committed to his program. It’s off to a good start. Last summer, 106 of the candidates endorsed by Ohmae’s group were nominated for Diet seats and 82 were elected. Those candidates came from seven different political parties.
This approach is almost unheard-of in Japan. Reform, when it comes at all, has invariably been a top-down affair; both the culture and the electoral laws discourage citizens from seeking to influence the nation’s political direction in any way except by casting their ballots. Ohmae is trying to shatter that tradition. Through rallies, television appearances, even a Clintonesque bus tour, he is recruiting members across the country who will support his organization with contributions of 10,000 yen (about $90) and extend its influence.
“This is going to reshape Japan,” he claims in a tone that does not invite contradiction. “Because the people want change. And you see, in Japan the silent majority is silent. They don’t complain. They learn how to live within the bounds. What I am doing is to have the silent majority speak up – and now they demand what they want.”
It is one small measure of the Japanese public’s traditional posture toward those holding power that the language has no word for “town meeting.” I learned this when I attended a town meeting of Ohmae’s group one gloomy Sunday afternoon in Sendai, a city of almost 1 million about two hours north of Tokyo by bullet-train.
The meeting was held downtown in a large municipal auditorium. Ohmae stood on a huge stage in front of a banner that read, “Now is the Time to Act.” Without notes, or breaking to take a drink of water, or pausing in any manner, he spoke in an even monotone for an hour and 40 minutes.
For all the words he poured forth, nothing was more revealing than what Ohmae didn’t say. The principal force generating interest in Ohmae’s organization is public disgust with the corruption of Japanese politics. But Ohmae was more than an hour into his speech before he raised the subject of political reform. (Electoral reform by itself, he told me later, “is bullshit…it’s not even worth talking about.”) His real target was more ambitious: to argue that the basic structures of Japanese society are obsolete under the new rules of global competition.
This is an argument Ohmae has honed for years in books like The Borderless World. He contends that centralized governments are losing not only their ability but also their need to direct national economies. In a world of global capital, where surging flows of trade and investment are creating dense regional economies that transcend national borders, it is folly to think that the center can steer an entire nation. Only an open door to the corporations and innovators who spread prosperity can guarantee long-term economic vitality – and security.
In other tongues, as expressed by other thinkers, these ideas are entering the bloodstream of countries around the globe. But Japan – Ohmae’s home base – has been almost entirely immune to them. The national government’s direct authority over business may have diminished in the past two decades, but the ministries in Tokyo still subtly guide corporate decisions, maintain thickets of obstruction to foreign products, and leave little freedom for local officials even to locate a bus stop.
“Success is its own enemy,” he told me. “Once you succeed, you want to keep repeating. But the world has changed. Japanese success was as a developing country, centrally controlled, no waste, everyone obeys. That is a fantastic system as a developing country. But it is one hell of a problem for the world. These guys [running the country] don’t listen to the world. They don’t even see it.”
Applying his analysis to the dense grid of Japan, Ohmae produces an agenda that is the political equivalent of reengineering a corporation. Under his plan, almost all of the power now held by the central government would be dispersed to 11 new semi-autonomous regional governments. MITI and the Ministry of Finance, the most powerful arms of the central bureaucracy, would be boarded up. The latticework of protection that disadvantages foreign products would be dismantled. The ban on imported rice would be lifted, and the rice farms that now incongruously consume large chunks of land on the edges of land-starved Tokyo would be paved over for new housing.
Because Kenichi Ohmae’s ideas would cause thousands of painful dislocations in existing patterns of Japanese life, most politicians dismiss his quest as quixotic. Many of them dismiss Ohmae himself as arrogant and dogmatic, not to mention a bit of a coward for not running for office. I mentioned Ohmae’s name to a senior LDP member considered sympathetic to reform, and he responded with a withering blast of disdain. “Ohmae is approaching politics as a typical consultant, wanting to remain on the sidelines and tell others what to do rather than taking on the hard tasks himself. If it goes wrong, he could say that the CEO, or in this case the politicians, didn’t follow his brilliant advice.”
That criticism seems to me overwrought. Just by starting his group, Ohmae has opened an important new political front in Japan – and perhaps beyond.
Indeed, for the United States, Ohmae’s agenda would spell an end to the drowsy continuity of the past three decades. Like many Japanese reformers, Ohmae takes a nationalistic “don’t tread on me” line. He labels the Clinton cabinet second-rate, dismisses US concerns about the trade deficit as “an illusion,” and notes with disdain how quickly American politicians scapegoat Japan. He wants to “become an equal partner with America. We will no longer be in a situation where we are told, `You do this, you do that.'”
There is an irony to Ohmae’s bristling, of course. Though critical of America, Ohmae and the reformers he has influenced are urging on Japanese society many of the same changes the United States has proposed. A Japan shaped by Ohmae’s ideas would be less deferential in expressing its disagreements with the United States. But in the long run, it would probably have fewer disagreements to express.
Ronald Brownstein, national political correspondent for the Los Angeles Times, recently completed three months in Japan as a Japan Society US-Japan Leadership Fellow.