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The English translation of the Japanese book, "The Japan That Can Say No", by Akio Morita, chairman of SONY, and Shintaro Ishihara, outspoken member of the Japanese Diet.
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The English translation of the Japanese book, “The Japan That Can Say No”, by Akio Morita, chairman of SONY, and Shintaro Ishihara, outspoken member of the Japanese Diet.
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THE JAPAN THAT CAN SAY NO

INTRODUCTORY NOTE

This is ... a translation of a best-selling Japanese book called "The
Japan That Can Say No." If you read no further in this introductory
note, please at least read this: the group that has typed in and
posted this translation wishes to secure for it the widest possible
distribution. Please ... mail [this document] either in print or
electronically, to colleagues, newspaper editors, members of the
national and local government, academics, radio talk-show hosts,
friends, and family; hand them out at work; leave piles of them by
the coffee machine. Note that the book is rather short, and so can
be conveniently Xerox-copied.

This book has been a best-seller in Japan, and has been the subject
of some attention in the United States; members of Congress have read
it, and some spoke of reading it into the Congressional Record, but
none of them ever did that. It has been excerpted in newspaper
articles and Usenet postings, but these excerpts are always the same,
because nearly no one has available the full text of a translation.
This has not been an oversight on the part of the authors, Akio
Morita and Shintaro Ishihara. Akio Morita is the chairman of Sony,
the very large electronics conglomerate that has recently purchased
Columbia Pictures. Shintaro Ishihara has been described in some news
accounts as a right-wing extremist, and Morita's association with him
has been described as a foolish mistake. These accounts are very
misleading; so nearly as I can tell, Mr. Ishihara is no more an
extremist in his country than, say, Bob Dole is in ours. He is a
somewhat right-of-center, charismatic and powerful member of the
ruling Liberal Democratic Party who placed third in the race to
succeed Prime Minister Sosuke Uno this past August. Ishihara has
served as the Minister of Transport, and is currently a member of the
Diet, Japan's legislative body.
The writers of American news accounts that call Mr. Morita's
co-authorship of the book with Mr. Ishihara a foolish mistake are
making a basic error of a sort that has complicated our understanding
of the relationship between the United States and Japan: they are
imagining that the reception the book would be given in the United
States should have played a major factor in Morita's decision. But
this book was not written to be read in the United States (and, so
far, it has not been); it was written to be read by a Japanese public
that questions the nature of the post-war political relationship
between the United States and Japan. It is a political instrument
that has helped to define for the public the positions of its authors
in much the same way that a popular book of political essays might do
so for an up-and-coming politician in the United States, and more so,
because the Japanese read such books more avidly than does the
American public.

The book's publisher, Kobunsha Publishing Ltd., has said that it has
no plans to publish the book in English and has authorized no
translations. Ishihara and Morita have spoken of how the United
States government has violated their copyright in distributing
translations of the book to members of Congress, and Morita has gone
on record as saying that he does not want to publish the book in the
United States, as this might inflame relations between the two
countries.

According to rumor, the translations available in Washington have
been written by either DARPA or the CIA. We have no idea if this is
true, or which translation this might be; however, it is one of those
circulated in Washington. It was apparently done in haste (and
perhaps by non-native speakers of English), as it contains numerous
typographical errors, errors of grammar, and errors of diction, which
we have made no attempt to rectify.

This translation has been entered and electronically distributed by a
group that wishes to remain anonymous. This is because we have no
wish to be bear-hugged in court by a powerful Japanese politician and
the CEO of an immense Japanese conglomerate, all under the approving
eye of the U.S. Department of State. However, we should like to
explain why we wished to embark on a project whose success could only
worsen the trade relationship, and even the political relationship
between the United States and Japan.

We Americans live in a country controlled by a variety of interests.
Over the past ten years we have repeatedly put into government a
group of people who cannot even make up their minds as to whether
public education should be funded; who are against the creation of a
national industrial policy; and who do not believe that the
government should take any steps to ensure that manufacturing jobs
should continue to exist in the United States.

Like many Americans, those of us who have undertaken to distribute
this book are able to make up our minds about all of these issues.
We believe that public education should be one of the first national
priorities and that the United States should have national industrial
and trade policies to ensure the continued existence of domestic
manufacturing. Our feelings about this are based on a simple desire
to see the United States maintain a decent standard of living for its
citizens. People who flip burgers are able to realize fewer of their
dreams than are skilled laborers who build things, not least because
people who flip burgers create less value for the economy and so make
less money.

How does "The Japan That Can Say No" figure in this? Our country is
obsessed with feeling good, to the exclusion of good sense. The
popular conception of our time runs something like this:

"Everything's great, just like the president says. Those crazy folks
on Wall Street go up and down, but they do okay, and if some more
factories close, if a few shiftless characters can't afford housing,
what the hell, huh? And those clever Japanese, what will they think
of next? They're always thinking of neat new toys to make for us."
The reality is much more grim. It seems very possible that in ten or
twenty years there will be no sector in which American-made products
are internationally competitive. Many American industrial concerns
no longer establish domestic manufacturing plants because they are
unable to find laborers sufficiently skilled to operate them
efficiently. We educate fewer and fewer engineers each year. Much
of American commerce is controlled by a managerial class that has
been trained mostly in marketing, has trouble with simple technical
concepts, and prefers the ease of marketing foreign products to the
complexities of managing manufacturing and development. Meanwhile,
many American citizens are unable to make ends meet, and their number
is clearly increasing.

All of these points are made regularly by domestic policy analysts,
to absolutely no significant effect. We were struck by the fact that
they are also made repeatedly in "The Japan That Can Say No,"
although here they are often couched in racist and belligerent
language. Ishihara and Morita wrote their book for domestic
consumption, to promote themselves and particular Japanese national
policies. We wish to use the book for an analogous purpose: we hope
that reading "The Japan That Can Say No" will help to jolt Americans
out of their complacency.

We believe that the urgency of our country's situation justifies our
disregard for the wishes of the book's authors. Their interest in
analyzing the United States' problems seems to be motivated at best
by a penchant for self-congratulation and at worst by one for
jingoistic sentiment and self-promotion. The fact that they are
attempting to ensure that their audience remains exclusively Japanese
reinforces our sense that they do not see our country's interests as
theirs. Still, much of what they say is accurate, and we believe
that reading it may help our country to act in its own interests.
Consider the analogy of a family who make their living by farming,
and who are in domestic trouble. The head of the family (say the
father) is a compulsive gambler, and, although some family members do
their best to wake him up to the fact that he is destroying the
family's livelihood, he pays no attention, selling off the tractor,
the truck, the cows, mortgaging the house and the fields. He points
out to his family that his good friends in town who run the bank, the
general store, and the casino are still happy to do business with
him. The bank still gives him mortgages, the general store still
buys what's left of the farming equipment, and the casino always lets
him in to play.

Perhaps if the farmer knew he was the laugh of the town, he'd pay
some attention. If he heard his friends clucking their tongues and
saying that it was an awful shame, what he was doing to his family
and that they didn't think he'd ever again get back on his feet, even
as they eagerly bought his tractor and his fields and continued
taking his money at the casino, he might think twice. Maybe he'd
even realize how far he'd fallen, and set about the difficult work of
putting his farm back in order.


If this makes sense to you, please work to disseminate copies of this
book as much as possible, especially to people outside of the Usenet
community -- those of us with access to networks are, after all, a
small minority of the national community. Please feel free to
disseminate as well this introductory note.


THE JAPAN THAT CAN SAY NO
The New U.S.-Japan Relations Card
by
Akio Morita
Shintaro Ishihara


Published in Japan by Kobunsha Publishing Ltd.

[the cover sheet then says:]
Kappa-Holmes


Translator's Note: The material written by Mr. Morita is very
straightforward; however, Mr. Ishihara tends to ramble, change from
one subject to another without much transition, and uses a great deal
of sayings and proverbs which when directly translated to English make
no sense. What has been translated is the closest equivalent in
English we could get.

Editor's Note: This material was given numbered section headings and
reformatted for easier reading. Also, a number of small misspellings
were corrected.


1.0 THE NECESSITY FOR PRESENT DAY JAPANESE TO REFORM THEIR CONSCIOUSNESS
(Ishihara)

1.1 Japanese People Have Become Top Heavy

Each month, there is the Cabinet meeting for the economic report. I
am one of those kinds of guys who gets up early and goes before the
cabinet meeting, which winds up by 9 a.m., or 8 at the earliest.
While rubbing my sleepy eyes, I go over the reports by the Bureau
Chief of the Economic Planning Agency and by the Director of the Bank
of Japan. Each month, the reports are almost identical. Generally,
the Cabinet ministers sleep through it. When I suggested to the Chief
Cabinet Secretary that in this age of governmental administra- tive
reform, why not give up these meetings, the reponse, not entirely
unexpected on my part, was that these were absolutely necessary, even
if there were some Party executives who did not attend.

Thus, each month, there is a repetition of a nearly identical report.
The Bureau Chief of the Economic Planning Agency said this month, just
as he did last month, that the magnitude of Japan's surplus in
international revenues was tending to shrink. In other words, this
means he is saying that it is perfectly alright for business not to be
so good. The Cabinet members all nod and underline this in red.
Myself, I thought this was a really strange phenomenon, so I turned to
the Minister for Home Affairs, Mr. Kajiyama, who was sitting beside
me, and asked what was going on here. Everybody is thinking it's just
great that business isn't prospering that much and eagerly red-lining
that information. Couldn't you say, however, that a country like that
won't last long? Words, words -- if the meaning of words keeps
changing, you can never be really sure what is being said. In other
words, aren't our values changing?

If we take Japan's vast trade surpluses as one type of crisis
situation, then this points to the necessity of changing Japan's
economic and industrial structure. While leaving undetermined for the
moment whether or not the conclusions of the Maekawa Report were
valid, it is true that the "comprehensive and vast" industries are
tending to recede and the lean and mean knowledge-intensive types are
coming into their own. When the term "comprehensive and vast"
(jukochodai) is applied to human beings, it is a form of praise, while
the opposite, "light and small" would be to berate the same. However,
when these terms are applied to the industrial structure, their
meaning has come to change.

What matters, however, is whether or not this is good. Should we all
be at ease, not that we are not dirtying our hands and sweating in
order to make things with our own hands? Certainly know-how comes
about from one type of mental activity, and coming up with it is a
work worthy of respect. Looking at history, however, in cases where
the whole society of the country was using their brains instead of
their hands, not one has lasted to prosper today. In some sense, it
may be true that the Japanese people are being forced into a new
historical experience, but can we go on now, as we are, thinking we
are the chosen people?

When looking at the actions of the Japanese people these days, I
recall that these seem similar to ET, the extra-terrestrial, in the
Speilburg films. I feel that it may well be the Japanese people will
evolve into something like ET with pronounced eyes and noses and a big
head making them top-heavy, over an abnormally thin body and slender
arms and legs.

Therefore, it was impossible for Japan to get more than a few gold
medals at the Seoul Olympics, which many Japanese read as being
abnormal. While it may be that this is a sign that a new people has
arisen to make contributions in other areas, it seems more natural to
me that our descendants would be able to continue to sweat and work to
keep the country strong.

1.2 Japan's Advanced Technology Is at the Heart of Military Strength

This is something advocated by Mr. Morita, who is a company leader
that has driven Japan's advanced technology and who is known for
manufacturing excellent products. He pointed out that the INF
limitations (the restrictions on intermediate range nuclear forces)
was something that the Soviet and American leaders came to each other
on. While this was an epoch-making event, it was certainly not done
because Americans and Russians had a new sense of the danger of
nuclear weapons, they were not acting from the standpoint of human
morality.

There may be some people who took the INF negotiaions as a sign that
both countries were beginning to act from their sense of humanity, but
I think the reason why they got together on this is different.
Whether it be mid-range nuclear weapons or inter-continental ballistic
missiles, what ensures the accuracy of weapons is none other than
compact, high-precision computers. As everyone knows, current ICBMs
use the MIRV concept where there are multiple warheads. When an
attacking missile gets near enough to be detected, the warhead splits
into 8 or 9 separate heads. Not all of them contain hydrogen bombs,
however, some are dummies designed just to dupe the enemy.

The remaining warheads lose speed, reenter from space, fall, run
sideways and follow complicated paths, but in the end, they hit the
targets picked for them by spy satellites and destroy them to within 1
second of latitudinal and longitudinal accuracy. For a Soviet ICBM,
this would mean hitting the silo containing the retaliatory ICBM in
Vandenburg AFB California.

These silos go 50 or 60 meters underground and are strong fortresses
having thick walls of reinforced concrete. If a direct hit is not
scored upon them, one cannot destroy the hydrogen bombs inside. The
equipment will not even be affected as much as it is in an earthquake
if a direct hit is not made. Thus, it is absolutely vital that a
direct hit is made.

At the present time, Soviet technology allows these missiles to hit
within a 60 meter accuracy, while for the U.S., it is 15 meters, and
there is concern that this 15 meters has to be brought down to zero.
This type of precision calls for a more complex orbit the further the
attack proceeds, and only artificial intelligence can ensure accuracy.
It may well be that America was the 4th generation leader and that the
1 megabit and several megabit devices which will support the next, the
5th generation, can be developed by American know-how. However, to
use this know-how across diverse applications, including weapons,
requires a country with dramatically advanced production management;
it is only Japan that can deliver on it.

In sum, if Japanese semiconductors are not used, this accuracy cannot
be assured. It has come to the point that no matter how much they
continue military expansion, if Japan stopped selling them the chips,
there would be nothing more they could do.

If, for example, Japan sold chips to the Soviet Union and stopped
selling them to the U.S., this would upset the entire military
balance. Some Americans say that if Japan were thinking of doing
that, it would be occupied. Certainly, this is an age where things
could come to that. The more technology advances, the more the U.S.
and the Soviet Union will become dependent upon the initiative of the
Japanese people -- this is getting crazy now, but the point is clear.
The U.S. Defense Department's Science Commission recently prepared a
huge classified report on electronic engineering. Looking at this,
one can well understand the sense of crisis that the U.S. has with
respect to Japan.

The report states that if Japan is left to go as it is, it will be
impossible to get the lead back. This report is very accurate in
assessing the areas of weakness in the U.S. and the strengths in
Japan, but only the President and a few select people have seen the
report. If it were seen by the general public, it would certainly
raise quite a commotion. It is in this area where the U.S.
specialists have their greatest sense of danger, primarily centering
on Japan's semiconductor technology.

-- We have grown very dependent upon America's technological
superiority in military strength. In that technology, electronic
equipment is the most effective technology. Semiconductors are the
"key" to preserving this superiority in electronic equipment, they are
the "heart of the equipment." If competitive, mass production of
semiconductors is the key, then this is in turn dependent upon having
the market to support mass production. --

This dependence on the market for supporting mass production can be
seen in that America did not have the vast and diverse needs for
semiconductors, as Japan did in rice cookers and other household
appliances. In Japan, these sizable and diverse needs created the
market for semiconductor production. The report continues:

-- American's Semiconductor Industry for its commercial mass
production is losing its superiority minute by minute. There is a
strong relationship between superiority in production technology and
superiority in semiconductor technology, this is being transferred to
foreign countries minute by minute. Very soon now, the defense of

America will become dependent upon supply sources abroad. It is the
opinion of the task team that this is something which is absolutely
unacceptable for the United States. --

What is meant in the report by "foreign supply sources" is none other
than Japan. Further, they seem to worry about the following:

-- What is more problematic is that the electronic equipment systems
are being transferred abroad, where they could more easily get
transferred into the hands of the Soviet Union. --

In other words, their sense of crisis stems from the fact that the
semiconductor technology is absolutely vital in maintaining military
superiority, and that this might flow from Japan to the Soviet Union.
I feel that what is behind this abnormal hysteria on the part of this
country is that this pivotal military technology is in the hands of
another country, not even Europe, but in the hands of an Asian
country, Japan.

Toshiba, etc. which was speared by COCOM is the fault of this hysteria
by the U.S. If that had been criticism from the pure perspective of
the law, it would not for a moment have any basis at all.
The 1 megabit semiconductors which are used in the hearts of
computers, which carry hundreds of millions of circuits in an area
which is one-third the size of your little fingernail, are only made
in Japan. Japan has nearly a 100 percent share of these 1 megabit
semiconductors.

The United States has the know-how to make them, but when it comes
down to actual production, they don't have the technicians; they don't
have the employees. Further, they don't have the production
management. Because they don't have development and production linked
into one unit, they guard know-how like a jewel.

America went after cheap labor and set up factories in Southeast Asia,
where they could make 256k chips (1/4 the capacity of 1 megabit
chips), but they could not catch Japan. Now, Japan is at least 5
years ahead of the U.S. in this area and the gap is widening. There
is even some kinds of basic research which cannot be accomplished
without using one of these advanced computers. It take excellent
computers in order to develop other advanced computers -- it is a
cycle of technology. In other words, the bigger the gap in advanced
computer technology, the more difficult it is to catch up.

The current situation in the world is that those kinds of computers
are central to military strength and therefore central to national
power. This is why the U.S. is being driven so hard. For example, in
performing simulations of what elements would be needed by aircraft
flying at mach 2, a regular computer might take 40 years to perform
the necessary computations. If the same query is put to a new,
advanced, computer, however, the answer will come out in a year.
Japan has almost the total share of the 1 megabit chips which are at
the heart of these computers. In that sense, Japan has become a very
important country.


1.3 There Is A Need for Japanese to Change Their Consciousness in Light
of High Technology

As the world goes smaller, and issues in the world further settle
down, whether it be China or Siberia, development will proceed. In
order to get the needed access (participation in the market), the most
important possibility lies in linear technology. Japan and West
Germany are the most advanced countries in this research and
development, and the theoretical base of Japanese technology is far
superior. West Germany has given up in research on superconducting,
but Japan has cleared three technological obstacles which were
envisioned by West Germany.

To make a long story short, the West German magnetic floating train
development realized a levitation of only 8mm, but Japan's "Maglevel"
superconducting linear motorcar realized a levitation of 10
centimeters, and speeds of 500 kilometers per hour. This type of
technology does not exist anywhere in the Soviet Union or the United
States, it only exists in Japan and West Germany. If the giants in
the economic field and the politicians can join together around this
type of technology, it would open up new possibilities for our
advancement. Whether or not this can be achieved depends upon our
large and small choices in the future; in sum, it is a question
involving the sensibilities of our politicians.

There is a Jiyu Shakai Kenkyu-kai (Free Society Research Association)
which is presided over by Mr. Morita. This was formed more than 10
years ago as an association of politicians and businessmen. I am the
youngest, but I also participate. We get together for discussions one
or twice per year.

Recently, Mr. Kissinger predicted that Japan might become a military
superpower. This, however, was not the foolish step of Japan getting
ICBMs and refurbishing the old Yamato battleship, it pointed to the
danger that no matter how much the U.S. or Soviet Union developed
space, equippped themselves with space platform weapons, the military
initiative to control these would be dependent upon Japanese
technology. The question now is whether Japan has politicians who
accurately understand the history behind what we have now become.
We Japanese now face choices on whether we can boldly proceed or stand
back quietly. It may be possible that Japan can secure a new culture
for itself based upon the skeleton of the development of high
technology. We must not restrain ourselves to what we have done up to
this point. The dregs of the postwar period are too prominent in the
consciousness of Japanese. I feel that however hesitatingly, the
revolution in our consciousness has already begun.

The Soviet Union implemented a revolution in consciousness with its
criticism of Stalinism, and China achieved the Great Cultural
Revolution. The United States also realized a type of consciousness
reform through its bitter experiences in the Vietnam War. Japan is
the only one which has not felt the need for some kind of reform since
the end of the war. We do not need a drastic reform of consciousness,
but rather, a smooth reform based upon the technology that we have
developed for ourselves. I think that only by doing this will we
realize a society which is mature in the true sense of the word.


2.0 THE DECLINE OF AN AMERICAN WHICH CAN ONLY SEE 10 MINUTES AHEAD (Morita)

2.1 American Neglects the Significance of Production

The gist of the Ishihara message is the importance of production
activities.

I have had frequent occasion to deliver speeches, both in Europe and
in the United States, due to the nature of my business activities, and
have involved myself in many debates at international conferences. As
a result of my conversations with Europeans and Americans, I have
become very aware of and concerned about the fact that they appear to
have forgotten the importance of production acitivities.
Americans make money by playing "money games," namely M&A (mergers and
acquistions), by simply moving money back and forth. If you look at
the exchange rate, for example, the dollar is now worth about 120
Japanese yen, and enormous and quick profits are made by just moving
money by computer, satellite, and even by telephone.

The summer before last, I had the opportunity to talk to a group of
three thousand foreign currency dealers, who specialize in buying and
selling money, at a conference on the future of money transfers and
financing. I have been known to be critical of the floating exchange
rate system. Talking to money dealers about my ideas was like telling
stockbrokers that the movement of stock prices if wrong; it takes a
lot of courage. I stressed that money should not be the subject of
speculation, because the fundamental function of money should not be
to enrich banks and security companies, but to smooth the path of
production activities. It has been said that America is entering a
so-called post-industrialist society where the weight of the service
industry sector is growing. Yet, when people forget how to produce
goods, and that appears to be the case in America, they will not be
able to supply themselves even with their most basic needs.

Last summer, a friend of mine who is always criticizing Japan for
being "unfair" invited me to his summer home to play golf. At the
first tee, I pulled out my MacGregor driver whereas my friend had a
Japanese Yonex club. I criticized him for using Japanese clubs since
he had been telling everyone not to buy Japanese products. He
responded simply: "These clubs give me better distance." Well, I was
not able to sacrifice distance and so I kept quiet. After the game, he
invited me to his house and while his wife was preparing dinner, he
showed me around. In the garage, I saw a Kawasaki snowmobile, which
he said he needed because winters in the northern part of New York
State have a lot of snow. Next to it was a Japanese motor boat, which
he said he needs because his house is surrounded by lakes. I also saw
an off-road vehicle made in Japan.

Finally, dinner was ready and as I went into the house, I saw a Sony
television and numerous other Japanese-made products. I said, "You
criticize us all the time for not buying American products while it's
obvious that you prefer Japanese products. Are you asking us to buy
something you won't buy yourself?"

Americans today make money by "handling" money and shuffling it
around, instead of creating and producing goods with some actual
value.

2.2 America Looks 10 Minutes Ahead; Japan Looks 10 Years

I delivered a speech in Chicago entitled "Ten Minutes vs. Ten Years."
I stated that we Japanese plan and develop our business strategies ten
years ahead. When I asked an American money trader, "how far ahead do
you plan...one week?" The reply was "no, no...ten minutes." He was
moving money through a computer, targeting the fate of that
transaction ten minutes later. So, as I told the Americans, we are
focusing on business ten years in advance, while you seem to be
concerned only with profits ten minutes from now. At that rate, you
may well never be able to compete with us.

A well-known economist, Peter Drucker, wrote recently: "Americans
cannot live in a symbol economy where businessmen play only with
numbers; Americans should come back to a real economy where money
moves in accordance with real production acitivities."
Unfortunately, in America, stocks are owned and handled by
institutional investors whose fund managers actually buy and sell
stocks in huge numbers in an attempt to maximize profits in a given
short period of time. At the slightest increase in stock prices, they
sell, and when the profit margin of any company declines as a result
of poor management, they sell before the company's stock prices begin
to decline. For them, the name of the game of nothing but quick
profits.

It is expected that the American service industry will flourish. This
includes finance and financial services, where entrepreneurs and
investors alike do not leave their money in long-term projects, such
as the ten-year projects that have been implemented in Japan. The
American economy is, then, an economy without substance. It must
return to a real production economy.

In America, R&D is closely linked to the military budget. R&D in the
private sector is heavily dependent on military expenditure. As a
result, a corporation can engage in the development of a new fighter
without worrying about profit or loss. On the other hand, budget
constraints on NASA and the military agencies will directly reduce the
volume of R&D.

A ten-minute profit cycle economy does not permit companies to invest
in long term development. There are some exceptions, such as IBM,
AT&T, DuPont, and some others. But they do not represent the
mainstream of American business nowadays. Gradually but surely,
American business is shifting toward a symbol economy. In addition,
it seems fashionable to call the service industry the "futuristic
third wave" and information and intelligence is the business of the
future. But these produce nothing. Business, in my mind, is nothing
but "value added;" we must add value and wisdom to things and this is
what America seems to have forgotten. And this is the most deplorable
aspect of America today.

Japan will do fine as long as it continues to develop and produce
things of tangible value; a shift from high-technology industry to
quick profits from the money game will only serve to accelerate the
degeneration of the country. We must take precautions against such
developments, providing for, for example, tax advantages for long term
investments.

It is even more the case in America. A quick profit from a stock deal
should be taxed at a higher rate than those on long term investments.
Capital gains should be subject to a lower rate of taxation.
Recently I said, "America is supposedly the number one industrial
country in the world. Why don't you have a Department of Industry?"
Seated next to me was the chairman of the Ford Motor Corporation, Mr.
Caldwell, who replied, "that's right - we are supervised by the
Department of Transportation." The Department of Transportation is
interested in emissions control and highway safety, but has no
interest or jurisdiction over the future of the automobile industry in
the United States.

America is the only nation among the advanced industrial countries
that does not have a Department of Industry which is responsible for
industrial policy. Instead, the Department of Commerce and U.S.T.R.
preside and their only real concern is trade-related matters and they
criticize others for the failure of American industry.

2.3 Japan's Impact on the World Economy Will Be Recognized

The American Economy appears to be deteriorating. I assume that the
Bush administration will take steps to tackle the present problems,
but the country as a whole seems to be extremely nonchalant about the
so-called twin deficits: budget and trade.
There seems to be the feeling that Reaganomics raised the standard of
living, taxes are relatively low, and they can buy goods from all over
the world. When the Republicans captured the White House again, I
began to wonder if there was any sector in America which was truly
concerned about the twin deficits since Bush repeatedly denies any
possibility of a tax increase. How in the world do the Americans
expect to restore their economy?

Let's examine the price of gasoline. Consumption of gasoline is
growing rapidly, yet the price is still below a dollar a gallon. The
ongoing world price per gallon is $4 U.S. A one-cent per gallon tax
increase means an additional $10 billion; think what the government
could get if they levied an additional 25 cents per gallon. Yet the
government will not even begin to initiate such a move.

In fact, even with such an additional tax, American gasoline prices
will still remain less than international prices. Politicians are
simply afraid of losing votes by adopting unpopular policies. Some of
my closest American friends have said that Bush could have been
elected without promising not to raise taxes. He has so firmly
committed himself and his Administration to not raising taxes, yet it
is so obvious that the twin deficits cannot be solved without
additional national revenue.

Bush should have been more realistic if he was, and is, honestly
concerned with the American bugdet crisis. Tactically, he could have
said early on that he would not raise taxes, but as he gained support,
he should have become more honest and direct, and told the people that
it was necessary to pursue a more realistic financial policy. On the
contrary, he confirmed his pledge even after he was elected.

Solutions to the deficit problem seem even more remote.

This being the case, the U.S. dollar has continued to decline, and the
U.S. has had to increase interest rates to further attract foreign
money to the U.S., for which it will have to pay a great deal of
interest. The result is an increasingly vicious circle.
The U.S. inflation situation might well become an even more chronic
phenomenon. Economic growth without inflation is ideal, whereas
endless inflation might well bring the dollar's value to the level of
trash. This, in turn will make European and Japanese assets trash
since sizable asset of both are in U.S. dollars.

Both the Europeans and the Japanese cannot sit idly by, ignoring or
overlooking the trend in the American economy. At one time, when the
U.S. dollar was very high, the Japanese and Europeans asked Americans
if "they could absorb the trade deficit caused by the high dollar?"
At that time, Treasury Secretary Regan was of the opinion that the
U.S. dollar should stay high and strong. When James Baker became the
new Secretary of the Treasury, he recognized the problem and entered
into the Plaza Accord to lower the value of the dollar.

The American economy does not stand alone. It is not only a domestic
issue. The collapse of the American economy would cause a worldwide
disaster. 1987's Black Monday chilled all nations momentarily. I am
not a pessimist, but I cannot help thinking that unless the Bush
Adminstration handles economic issues very seriously, a worldwide
collapse is not just a worry, but a very real possibility. The
ever-growing American inflation and thus its economic crisis will not
only make other nations catch cold, but bring their economies into
crisis as well.

It is said that Japan contributed to efforts to stop a possible
disastrous chain reaction ignited by Black Monday which began in
America and soon affected the London stock market as well. At that
point, the Japanese Ministry of Finance asked Japanese institutional
investors to support prices for a time, which instantly normalized
Japanese stock prices. Later, the chairman of one of the major U.S.
banks, who was visiting Japan, told me, "It was Japan who put a stop
to the chain reaction and it was the Ministry of Finance who was able
to move the Tokyo stock market. The Japanese government now has the
clout to sustain Wall Street and the City of London. So-called
Japanese guidance is truly powerful."

This gentlemen went on to say, "we are worried about the fact that the
Japanese people are unaware of the fact that they have a significant
impact on the world economy. And I believe that it is true that
Japan's economic status has been much enhanced."
Like it or not, this is the picture held by Americans, and the
Japanese people have to recognize it and, inevitably, they have to
behave in accordance with that status in the world community today.


3.0 RACIAL PREJUDICE IS AT THE ROOT OF JAPAN BASHING (Ishihara)

3.1 America Will Never Hold Its World Leadership Position Unless It Ends
Its Racial Prejudice

I had the opportunity to visit Washingotn, D.C. in April a year ago,
and was suprised at the very hostile atmosphere. It was only five
days after Congress passed the resolution condemning Japan on the
semiconductor issue. I met some of my old friends, senators and
congressmen, who with subtle smiles admitted that racial
considerations, or more directly, racial prejudice, played a role in
U.S.-Japan relations. This was after I had discussed several concrete
examples with them. Although they shied away from the subject of
racial prejudice as if it were taboo, they did admit that it is there.
Initially, they violently denied my allegations, citing that the
Pacific War of 40-some years ago as the only real source of prejudice
against the Japanese. I declared that it was not as simple as that.
It appears that the Americans were firmly of the opinion that it was
the West, namely Euro-Americans, who established modernism. My
reaction was as follows.

It may be true that the modern era is a creation of the white race,
but you have become somewhat presumptous about it. In the pre-modern
era, Asiatic races such as Genghis Khan and his armies raided the
European continent, destroying towns and villages, looting and raping.
Yet at that time, many Europeans actually imitated the style and
behavior of Khan's hordes, cutting their hair short, shaving their
eyebrows, and walking menacingly with knees apart. That was nothing
compared to the strange ways modern Europeans and American adopt the
style and fashions of some of the present era's heros, such as the
Beatles and Michael Jackson. Even Asian kids do this. Probably Khan
was some kind of cult figure then and while women regarded him as a
"hero" of sorts.

Some say that the roots of the so-called "yellow peril" can be traced
back to the atrocities committed by Khan and his men. At any rate, we
should keep in mind that there is prejudice committed by Khan and his
men. At any rate, we should keep in mind that there is prejudice
against Orientals, as the following episode illustrates.

I had a chance to talk with the Secretary of the Navy about the Amber
System. Amber is supposed to be the color of caution and danger and
this system is named for this concept. Under the Amber System,
ordinary vessels such as tankers and container ships, are equipped
with sonar on their bows. The sonar can detect underwater objects.
Some objects are rocks, etc. which navigational charts will show.
What the system is looking for are nuclear submarines.

The Amber System alone cannot detect the nationality of the submarines
detected; it cannot tell if they are American, Russian, or whatever.
It simply detects the presence of some foreign object and this
information is relayed directly to the Pentagon, which knows what is
on the navigational charts and also where U.S. subs are located, so
they will be able to ascertain whether the particular sub is American
or not.

I suggested that the Navy equip all Japanese commerical vessels with
this system. Japanese seamen are reliable and the Japanese merchant
marine travels all the oceans and seas. Japanese vessels, including
our oil tankers, could gather information along vital cargo routes and
the U.S. could analyze the information received from the Japanese
ships.

To my suprise, the Americans said that it was none of Japan's
business. I asked that how, in light of the very limited number of
U.S. ships, how can you deny the need for such assistance. Their
answer: "We cannot leave such a critical matter with Japan." I asked
if it was appropriate to involve the British and the Germans, and they
said it would be.

The fact of the matter is that Americans do not trust Japan. Japan
would have no basis with which to analyze the information collected by
the Amber System, yet they were still worried about the Japanese
reliability in merely collecting the information. It seems that in
their minds, even the Soviets are more trustworthy than the Japanese.
American racial prejudice toward Japan is very fundamental and we
should always keep it in mind when dealing with the Americans.
During the Second World War, Americans bombed civilian targets in
Germany, but only on Japan did they use the atomic bomb. While they
refuse to admit it, the only reason they could use the atomic bomb on
Japan was because of their racial attitude toward Japan. The fact
that they actually dropped the atomic bomb on Japan is sufficient
indication that racial prejudice was a factor.

It is my firm conviction that the roots of the U.S.-Japan friction lie
in the soil of racial prejudice. American racial prejudice is based
upon the cultural belief that the modern era is the creation of the
white race, including Americans. This confidence appears a bit
overwhelming, probably due to America's relative youth as a nation,
which tends to blind it to other cultures. If Americans were ever to
be made aware of the presence of a real Japanese culture in the
Azuchi-Momoyama period as did the Spanish and Portuguese missionaries,
they might develop some respect for Japanese cultural history.
Unfortunately, the present American education system does not teach
children the value of other cultures. In the period noted above,
there were over 20,000 "terakoya" schools all over Japan. No other
nation had such an extensive schooling system at such an early point
in their history.

During the Edo period, even farmers and peasants were able to read and
write at least one or two thousand characters, including hiragana and
katakana. Japan already, at that time, had a complete postal network,
called "hikyaku" as far as the southernmost end of Kyushu. Documents
and information of various kinds were available in libraries in many
cities and towns.

This is the kind of information I give to Americans who exhibit
ignorance of our culture. Unfortunately, most Americans don't like to
see these facts, and they tend to change the subject. In short, their
historical prejudice and cultural narrowness has reached a point where
they cannot see another's point or see the value of another culture.
All this has made Americans, in the post war period, very irritable on
the issue.

The American position at this point seems to be that the British and
Germans can play whatever role the Japanese could, and can do so
without irritating the U.S. Americans are essentially an honest
people, and in fact do admit to the existence of racial prejudice, if
they are pressed on the subject, which I do. However, this is not
enough. They should also admit that prejudice does not hold any
solutions to the problems developing in the world today. It is
important that they face the situation, aware of the historical
context, seeing that the reality is that the power in the world,
including the economic power, is shifting gradually from West to East.
It may not be as strong a shift as is expressed in the expression the
"Pacific era," but at any rate it is in America's interest to rid
itself of prejudice against Asis, including that against Japan, in
order to maintain a position of leadership in the world.

3.2 Japan Should Become More Cosmopolitan

The calendar clearly indicates that we are moving toward the end of a
century, and with it is coming the end of the modern era as developed
by white Westerners. History is entering a period of new genesis.
The promoter of this era is Japan as well as the U.S. It is a
historical development which America's political leaders should make
known, so that America will be better equipped to meet the tasks of
the future.

The Japanese have their own problems. They may have to go through a
mental evolution to meet the needs of this new era. As Mr. Morita has
pride and confidence in the products of his company, and attitude
which has made him a truly cosmopolitan man, so must the Japanese
develop pride and confidence in our culture and our technology. We
cannot become overbearing, which will not be tolerated in the new era,
but by the same token, an inferiority complex is equally harmful. The
Japanese people must move out of their current mental stagnation; I
feel this is especially important for Japanese diplomats.

Except for the young and especially qualified, most Japanese diplomats
suffer from a peculiar inferiority complex [and] as a result are
spreading the seeds of misunderstanding throughout the world. When I
was young, I had the opportunity to live with one of Japan's
ambassadors and his family. He was a hell of a nice guy -- a really
wonderful human being. However, he seldom socialized with anyone. At
the end of a game of golf, if someone suggested dropping into the
lounge for beer, he would refuse, saying that he preferred to have one
when he got home. This is the same attitude that some Japanese have
when they won't even accept a cup of tea while a guest in another's
home. It may be for most Japanese that only in his home and only with
his family can he really relax. If this is true, then the Japanese
can never truly be cosmopolitan. When the heads of some of Japan's
top trading companies, such as Mitsubishi and Mitsui, wanted to join
prestigious country clubs in the countries in which they were
stationed, their applications were rejected because it was felt that
Japanese were too parochial, staying to themselves and not socializing
with others. Some Japanese diplomats don't hesitate to show their
inferiority complex. One ambassador even publicly said that the
Japanese were a race a "pygmies." Such things happen all the time!
The Ministry of Foreign Affairs tried to cover up the news of the
firing training by an American cruiser (the Towers, 3370 tons) last
year in Tokyo Bay. A single cannon on the Towers, the Mark 42, can
send a 32kg ball over 23 kilometers at 36 rounds per minute. American
authorities said non-explosive training ammunition was being used.
But even these could easily damage of Uraga class Japanese Coast Guard
frigate (33231 [sic] tons), not to mention what it could do to small
fishing vessels. Tokyo Bay is a busy commerical harbor, similar to
New York Harbor inside the Verrazano Bridge. American television
reported that the American people would be furious if that happened in
their country.

The Ministry of Foreign Affairs asked the Japanese media to hold the
story until further notice, since that event was incidental. I was
very angry and protested, saying that I would release the news on my
own. This happened on Japanese soverign territory in an area clearly
barred from such firings due to the fact it was a vital maritime
channel. It was a clear violation of Japan's sovereign rights. I
observed that "It was like seeing a ranking Self Defense Agency
official firing his service revolver at the Ginza junction." I still
feel the same way.

Americans can say that they are here to protect Japan under the
U.S.-Japan Security Treaty. But at times, it appears to me that the
Americans behave more like mad dogs instead of watch dogs.
I use the term "mad dogs" when referring to the Americans recalling
that Mr. Shiina, Deputy President of the LDP, used it when he was
Foreign Minister. This is another instance where "no" clearly [must
be] said when that is what is meant [and] would be useful. One must
say "no" when he means "no" and failure to do so reduces credibility.
In the case of the U.S.-Japan relationship, such an attitude only
further increases American racial prejudice. The Japanese people
should know that they are in essence protecting American interests as
the new era in international relations begins, something the Americans
seem quicker to sense. This is the reality of the U.S.-Japan
relationship today.


4.0 BASHING JAPAN GETS VOTES (Morita)

4.1 The Paradox of Welcoming Investment but Criticism of Japan

I am worried about the tide of attitude in America with respect to
Japan. The U.S. Government and the Congress have adopted a number of
harsh policies with respect to Japan. Some 37 states in the U.S. have
established offices in Tokyo. Since I am responsible for
investment-related matters in the Keidanren (Federation of Economic
Organizations), when the state governors visit, I am the one to meet
with them, if my time permits.

It never fails, they are always coming to Japan saying, "invest,
please invest." Just when I am about to assume that America welcomes
Japanese, U.S. congressmen elected from these same states are bashing
Japan. The state government has no involvement with this, of course,
but they are saying to Japan's big business, "come on, come on."
"What in the world is the meaning of this?" I wonder. In addition,
recently a number of famous academics and journalists have published
books which are critical of Japan. Recently, there has been a book,
"Buying into America" which suggests that Japan is buying up America,
and there is a book called "Yen" which envisions a future after the
year 200 in which Japan uses its financial power to control the world.
The latter is rather calm in its perspective, but both books reveal a
clear Japanese menace - the tides have really shifted since "Japan As
Number One" was published.

A book written by a famous journalist which depicts Japan in a very
harsh light has become a best seller, so this is indicative of the
critical attitude on Japan held by the American masses. The more this
attitude increases, politicians will beat up on Japan in an attempt to
make votes for themselves, because getting votes is the most important
aspect of being a politician.

The politicians themselves are not at all concerned, however. When
asked why they bash Japan, they respond that if they say "Japan is
good," votes will drop off. If Japan is bashed, further, if a Toshiba
radio-cassette player is smashed, this is not indicative of hating
Toshiba, but they think if they do such things, votes will increase.
The state governments welcome Japanese industry because if they invest
in their state, tax collections increase, along with employment, but
among the American people, the attitude with respect to Japan is
becomming more and more critical.

The Keidanren has established a "Council for Better Investment in the
United States," which is the English language name of the council
(literally it is the "Council for Investment in the U.S." -
translator). What we mean by "better investment" is the type of
investment which will get Americans on Japan's side. If the number of
Americans who view things the way Japan does increases, then bashing
Japan will cause lower vote counts. That would probably make
politicians stop bashing Japan.

I think that it is vital that we help build a feeling of friendship
among the American masses with respect to Japan. At the present time,
everyone buys Japanese goods and is delighted with them. They do not
hate Japanese products. What makes them hate Japan, however, is that
when Japanese businesses enter the American society, they have the
feeling that foreigners are coming.

4.2 Japanese Industries in the U.S. Should Work at Community Service

Direct investment in the United States is currently expanding very
rapidly. The end result of this is that Japanese companies, including
Sony, have established themselves in local districts throughout the
country. When the English or French invest in a local area, the
communities and local society do not see this as an invasion of
foreigners. However, when the Japanese come, they feel that
strangers, or something foreign has entered their midst. This gives
them strong feelings of fear and anxiety.

To give a simple example, when Japanese go to the U.S., their children
go to schools. The schools have an organization, the P.T.A. This
stands for Parent and Teachers Association. The corresponding
organization in Japan is called the "Fathers and Brothers Association"
but no fathers and brothers participate, it is more of a "mothers and
sisters" association. Myself, I have never attended the Fathers and
Brothers Association in Japan. In the case of America, however,
husbands go with their wives to attend meetings for their elementary
school or local area school and discuss how those schools should be
run. In Japan, it is the mother's duty to take care of educational
matters for the children, so the father does not attend. In America,
however, when the father takes off work to attend a PTA meeting, his
company does not charge him leave. The man, therefore, must go to the
PTA meetings.

When I was living in the U.S., I went to PTA meetings where I was able
to associate with persons from various walks of life. My daughter
went to the Nightingale Bonford School in Manhattan and my son went to
St. Bernards. I got to know Stokowski (the late) conductor at one of
the PTA meetings. John Gunther, a very influential behind-the-scenes
man was also someone I met through [the] PTA; he is now the Ambassador
to Austria. Henry Grunwald, the editor of Time, was [the father of] a
classmate of my daughter's who I also got to know.

At a gathering of Japanese businessment in the United States, I got up
and told them "to go as a couple to the PTA to get to know the other
people involved and to start getting personally involved in the
school." The people I was speaking to made such remarks as "I don't
like to hear that," or "Why do we have to do that?" When I told them
there was actually a meeting the other night and asked what they did,
the responses were "I was too busy, I sent my wife," or "My wife can't
speak English, so she just gossiped with the other Japanese women and
came home." Because of instances like this, there is no doubt that
the PTA would view them as the foreigners who'd come to town.

Also, when Sunday morning came, the whole community dresses up and
goes to church. At that time, however, the Japanese are all walking in
the opposite direction to the country club. When they are asked why
they are not going to church, they are likely to respond that "I'm a
Buddhist," or a similar reply. I'm not saying that they should
necessarily go to church, but it is natural for the people in the
community to think that some really strange foreigners are in their
midst when they see them all trotting off to the golf course on Sunday
morning.

I golf in America too. But I always do it with foreigners. When
Saturday night comes, I take my wife to the country club, have dinner
and talk with the other members. However, golf for Japanese is
usually a business-related event; there are usually guests from Japan
and a group solely composed of Japanese people plays the course. This
is another way in which a strange image is transmitted to the local
community.

Another example is that American wives often volunteer their spare
time for community service activities, such as preparing Braille for
the visually handicapped. Japanese housewives normally do not
participate in such activities.

There are also public fund-raising dinner parties for local community
centers, which do not involve mere contributions, it is a major social
event where funds are raised. Tickets for the party are $30, $50,
$100 and $200 which represent contributions to the fund-raising event.
They view participation in these events as a contribution to their
local society. While this is a little different than the golf example
above, it is another area where Japanese isolate themselves as strange
foreigners.

It is vital that we participate in the local society in order to
resolve any racial problems. When Japanese build factories in the
United States, these usually go to the regional or rural areas due to
the large amount of space they require. In such a small community
context, if Japanese avoid contributing to the local community, they
will be disliked in the area, and then the people of that area will
cast their votes for Japan-bashing politicians.

One Japanese company that had established in the U.S. had its
headquarters in Japan make a very substantial contribution to build a
community center, in an effort to counter any adverse prejudice, even
though the local company had not yet become profitable. The local
community was delighted and named the hall after the company that had
contributed. When the plant manager was reassigned back to Japan, the
whole community threw a "sayonara" party for him.

I am not saying that all Japanese companies coming to the United
States are bad, but just a little kindness and consideration can turn
around attitudes about Japanese people. The Council for Better
Investment in the United States is trying very hard to get this
information out in an effort to have the Japanese company weave itself
into the fabric of the local community in which it is locating.
At the current time, two hundred and forty or fifty companies who have
invested in the U.S. are members of the Council, but it aims to
attract even more members.

Information about these efforts is gradually becoming known in the
U.S., and this has already done much to change perceptions there. I
think Japanese people in the U.S. are also making better efforts.

4.3 Let's Build an American Society Where Japan Bashing Causes Votes to
Decline

Therefore, I think that the only way to erase the perception Mr.
Ishihara points to where Japanese are disliked just for being Japanese
is to make the above types of efforts. This is because they
[Americans] are stubborn and not likely to be induced by saying "you
guys change."

I have so many American friends myself that I have been accused of
being an American. Since I have lived in America and have been
counted as a friend by many Americans, I am not overly sensitive to
what is said about me. As Ishihara has said, to Americans, they feel
that because their hair color is different, it is difficult for them
to know what Japanese are thinking. I think there is another
important point. The structure of the Japanese language and English
is different, and this affects our discussions together.

I have written this elsewhere in a book, but when Japanese read
Chinese, they put in arrows and symbols to change word order, but
Chinese read it directly and understand the meaning of the sentence
immediately. English is the same kind of language, which is read one
word after another. In sum, this means that Americans have a
different sequential order in thought processes. Therefore, no matter
if you use interpreters, it is impossible to interpret in the same
sequential order as the thought processes that that generated the
words in Japanese. Thus, when a message is to be delivered, it is
regrettable but true, that the sequential thought process of Japanese
is in the minority in the world. When communicating with occidentals,
who are in the majority, if things are not communicated in an order
they can comprehend, they do not understand what we are saying. It is
necessary that we be cognizant of this disadvantage that Japan has in
this area.

While the color of our hair will never be identical to Americans, from
the point of view of practical businessmen, I think we must recognize
that if the current trade imbalance with the U.S. is not rectified,
America will always say Japan is at fault. If Japanese business does
not go to the U.S. with manufacturing and sales to bring down the
imbalance, there is no way the problem will be rectified. We must
bring our factories to foreign shores, and invest in these areas where
our goods are sold.

At this point, if there are any racial problems, it would be the fault
of the Americans, but that does nothing to resolve them. Through the
success of Japanese-American citizens' groups, racial problems are not
so prominent anymore. When the Second World War began, all
Japanese-Americans were placed in detention camps.

In the United States, people having different colored skin have
realized great successes. An example is the Wang company which was
founded by a Chinese. In our quest to find out why it is only Japan
that is bashed, it would be a bit strange to say it is because Japan
is not internationalized, but it is really because we have been lax in
not following the "when in Rome, do as the Romans do" in incorporating
ourselves in the local community. I think this is why we remain
foreign. That is exactly why I am saying we need to make such
efforts. I am not saying that everything they do is alright, but I am
saying there is a need for internationalization by both parties, and
we have the need to do business.

The internment of Japanese-Americans during the war was a prime
example of the emotionalism that the U.S. displayed with respect to
Japan. After the passage of 40 years, the President has finally
publicly recognized that this was wrong. It would be nice if
emotionalism with respect to Japan ended right there, but that is not
the case. An example is the Toshiba clause included in the Omnibus
Trade and Competitiveness Bill -- no buying of Toshiba products --
Toshiba Machine is bad.

I said in a speech that this was a violation of the U.S. Constitution.
This was due to the provision in the Constitution that proscribes the
enactment of laws which would deal retroactively with crimes. It also
allows anyone accused of a crime the opportunity to defend himself.
In the process of compiling this bill, sanctions were put on Toshiba
for its crime. Toshiba had already been punished for its crime under
Japanese law; but by adopting these sanctions restricting Toshiba's
business activities, the Bill would impose retroactive punishment.

When I recently spoke in Seattle, I suggested that this Bill was
unconstitutional, that it was an emotional response, and that it
should be treated as an emotional international issue, which was
similar in substance to the internment of Japanese-Americans during
the war.

When something can become this emotional, perhaps Mr. Ishihara is
right in his contention that racial problems lie at the root of the
problem. During the occupation era, the Americans built fences and
stayed inside and didn't mingle too much with the Japanese people.
This created an unpleasant atmosphere. Now, however, there are no
occupation zones and we are at peace, we must behave appropriately and
associate with each other.

If we do make efforts in this direction I have indicated to establish
a framework where Japan-bashing politicians are rewarded by fewer
votes for their efforts, there is no doubt that political pressure
will be exerted to the point where there can be no reduction in
frictions between the countries.
Thus, it is my way of thinking that Japan must take the kind of action
this situation calls for.


5.0 THE CRITICISM OF JAPAN AS AN IMITATOR IS OFF THE MARK (Ishihara)

5.1 The America Which Closes Its Eyes to Its Own Unfairness, and Criticizes
Japan

The more I hear Americans bellowing complaints that Japan is unfair,
the more I would like them to calm down and think. An example is a
harsh exchange between myself and the U.S. Secretary of Commerce. It
was a coincidence, but at the time when Commerce Secretary Verity
visited Japan, there had been an agreement for an American company to
participate in the second phase construction at Haneda International
Airport. Verity was in Japan, and his mission included offering his
thanks for this deal. However, I threw some cold water on him by
saying that this would be the only time I would permit such a big
commotion over such an issue.

The U.S. Congress had been criticizing Japan for having a "closed"
market in large construction projects. In fact, however, there was
only one U.S. construction firm that had been licensed to work in
Japan - two, if you count pending applications. They say that the
barriers are too thick, but I think that anyone wishing to do business
in a foreign country has to make some adjustments to correspond to the
local conditions.

After we went back and forth along that line, I commented that Japan's
design for the Airport Building and the Shinkansen [bullet train]
station, including the interior was poor -- not refined enough and too
idiosyncratic. I went on to say that this might well be something
which could be consigned to a foreign country.

This was true of Narita International Airport too. I noticed the
other day that the pillars were painted with rust-proofing primer
coat. When I suggested to the person in charge that he get busy and
have them painted, he said, "Mr. Minister, did you just notice this?
They have been that way since the airport was completed." When I
asked why, he replied that it was OK this way because of the contrast
between the red, white and black. When I asked whose design that was,
he calmly replied that the painting contractor had made the
determination.

Actually, there is not even a bar in the whole airport. One might
like to have a drink to ease one's tension about flying before the
flight, or one after to relax. Foreign airports always have a place
where you can get a drink. Day or night, there is a place where the
customer can get a drink. This is an integral part of air travel.
When I relayed these stories, Secretary Verity nodded his head,
indicating that he understood my point. You could tell he was the
Commerce Secretary, because when we went on to discuss the Kansai
Airport, he said it would be a great idea if American companies could
do the design.

Just that would be nice, he went on, but after it is completed, he
said that the same number of U.S. aircraft should be permitted to fly
from the airport as was permitted by Japanese carriers. I replied
sharply, "No, that won't do." He turned colors and asked back, "Why
not?"

There is an aviation treaty between the U.S. and Japan. It is a relic
of the occupation era. Not only is it not balanced, it is outright
unfair.

Among the mutually agreed upon rights in this treaty is the right for
air transport to points in the signatory country, and for rights from
those airports to points beyond in third countries. These rights are
all rights held unilaterally by the U.S. side. American can fly into
whatever Japanese airport it pleases and then fly to anywhere else.
In other words, it has unlimited rights to fly through Japan to
destinations beyond.

Japan, however, only has the right to navigate through limited
airports, the economically unprofitable routes from San Francisco->New
York->Europe. Actually, these routes are not even being used. During
the U.S.-Japan Summit in 1982, we were allowed two flights per week
from Los Angeles to Rio and San Paulo, Brazil. One of the concerns on
the Japan side is that Nippon Cargo Airlines (NCA) was finally
obtaining 9 flights weekly in 1985 on the Tokyo->San Francisco->New
York route.

However, in exchange for this, America got the right to land jumbo
jets in Japan, and then fly from there further in small cargo aircraft
to Manila, Taiwan, and Korea. The most profitable rights went to the
U.S. in this agreement too. In the midst of all this, Japan cannot
get the right to fly a cargo aircraft in and out of Chicago.
While points of origin are limited by land space, Japan is restricted
to just three points, Tokyo, Nagoya, and Osaka. America can fly to
Japan from 19 airports. Looking at the number of flights, according
to a study made in November of 1988, Japan had 204.5 and the U.S. 371
passenger flights, and 60 cargo flights for Japan versus 170 for the
U.S. This is really unfair of the U.S. to be party to the U.S.-Japan
Aviation Treaty which gives it so overwhelming of an advantage.
American specialists are well aware of this situation, so they do not
want to engage in further negotiations. This type of situation
continues while the U.S makes selfish assertions.

I explained to the Secretary that since the U.S. maintained that
attitude, it was at fault. The Secretary said he knew nothing of
these matters. I pointed out to him that we couldn't even begin
talking about getting negotiations started if he knew nothing about
these matters.

An official from the State Department was accompanying the Secretary
on his visit. He was an honest guy, and told the Secretary that the
Treaty was indeed unfair. Secretary Verity became troubled. It was a
very strange atmosphere between the Commerce Secretary and the
official from the State Department, standing there in front of me, a
Japanese. America is not the solid rock we thought it to be.
For example, relations are extremely poor between the Department of
Commerce and the U.S. Trade Representative. Yeutter and Verity
quarreled like dogs and monkeys, they never got along and were always
bad mouthing each other. While none of these references about these
two went on in front of me, there was an official from the U.S.T.R in
the delegation who was there to keep an eye on things.

Anyway, once the potential for a scene between the Secretary and me
had quieted down, the "spy" from the U.S.T.R. caught my eye and said
"Hang in there." I laughed, thinking what an interesting country the
U.S. was.

5.2 Japan, A Country Where Each Person Is Highly Creative

America closes its eyes to its own unfairness and criticizes others.
I think that it should not be forgotten what such a shifty country has
done.

As Mr. Morita has pointed out, it is off the mark to say that Japan
has relied on the U.S. for the creativity to develop technology, and
then has just cleverly developed and marketed it. Americans and
Europeans say that Japan can do nothing but imitate, but it is not
right for Japanese themselves to begin to agree with such a statement.
The Japanese people have been possessed of creativity for ages.
There has been a gradual increase in the number of Americans and
Europeans who recognize creativity in the Japanese. The same can be
said for cultural creativity.

Take the field of literature. Some while ago, the French did not
recognize Japanese literature at all. They did not think it had any
value. More recently, however, the French have grown to appreciate
Japanese literature more and more. The reason for this is quite
interesting; it came about because of Japan's high technology. That
is, foreigners who were interested in Japan's high technology began
studying the Japanese language and started reading modern Japanese
novels.

They recognized that modern Japanese literature was indeed quite
interesting. It was not their masters of literature or translators
who pointed this out, but the intelligentsia who were coming from
scientific backgrounds.

In any case, I do not think we should stand still and agree that
outside of literature, we are still nothing but imitators as the
Americans say. It is time that Japanese take pride in their own
spontaneous creativity and march forward.

Sony developed the transistor [possible ambiguity in translation -- as
Morita notes in essay 4, Sony licensed the transistor from Bell
Laboratories in 1953] and took it to the U.S. market and changed the
way Americans thought. In other words, they ripped apart the immutable
principle of one radio per each family. The concept of making radios
a personal appliance was nothing other than an exhibition of
creativity on the order of that shown by Columbus.

The bountiful creativity of the Japanese is not something which can
only be seen in a few of the elite, but something which can be broadly
witnessed across the board in the general citizenry.

Japanese technology has found its way to the very heart of the world's
military forces. I think this the product of the integration of our
creativity.

Even if you have one creative genius, unless you can produce the
product of his creativity in a factory, it will not come to anything.
It takes a large number of excellent general technicians and excellent
employees or one will not begin to see the light of day.

5.3 The Excellence of Japanese Products Relates to the Educational High
Level of the Employees

One can partially grasp the superiority of Japan's technological
ability in the low rate of breakdown in Japanese products. The vital
element in the excellence of technology and in tackling the problem of
product breakdowns is possible because of the excellence in abilities
of the general employees.

The U.S. Boeing Corporation which was scrutinized due to an aircraft
crash was found to have problems with its employees' work methods, and
they quickly set about making improvements. Certainly the
re-education of the management could be undertaken quickly to the
satisfaction of Japan and other countries, but since the level of the
general employees was so low, concern remains in that area. When the
president of Boeing's Seattle plant was asked: "How long will it take
after re-education has begun before the technological strength [of
your company] will begin bearing fruit?" His answer was seven years.
Seven years! How can we ride around in jumbo jets for seven years not
knowing what types of defects they might have?

As we learned from the tragic Boeing crash in Japan, all of those
responsible got off, bearing no criminal responsibility. The legal
systems in Japan and the U.S. are different: in Japan, a national
inspector is sent out, but in America, aircraft manufacturers are not
held responsible. The Boeing company did not even name the
responsible persons. They say that it is better to prevent a
recurrence than to spend all of their energies in finding fault, but
the thinking that exemption from prosecution is the only way the truth
can be told is something that is very hard to take for the families of
those killed in the accident. According to an investigation by the
Japanese police, there were four Boeing employees who should have been
further pursued to assess their responsibility. The U.S. side
acknowledges this.

The Boeing accident was nothing more than a worker's mistake -- it
happened well before the crash. There was no follow up after the
crash except to say that the maintenance operations were sloppily
done. While the specifications had called for three thick divider
walls to be tightly bolted on, it just was not done.

Bolts had been placed on the left and right, but they did not reach
through the three sheets, just to the second one. This caused a
serious weakening of the aircraft strength. This tells the story of
the low level of the people who are performing maintenance.
Despite the fact that they are employees of the Boeing Corporation, a
world-class manufacturer of aircraft, it would still take 7 years to
re-educate them. This is a story which could not be comprehended in
Japan's industrial circles.

The United States wants everyone to buy American-made semiconductors,
and these are even being used in Japan, but the number of defective
ones is amazingly high. When we complain, the answer is: Japan is the
only country that is complaining, nobody else has any complaints. It
leads me to think that there is no hope for the U.S.
The manufacturing defect rate in the United States has improved
somewhat recently, but it is still 5 to 6 times higher than that in
Japan - it used to be 10 times higher. The report by the task team in
the Pentagon also admits this.

To contrast this with Japan, I would like to insert the following
episode.

This is an episode illustrating the exceptional knowledge and decision
making capability of one female employee of the Kumamoto plant of
Nippon Electric Corporation(NEC). For one reason or the other, the
rate of rejects at the Kumamoto plant had been higher than it was at
other NEC plants. No matter how hard they tried, they could not get
the reject rate down. If it could be done in other plants, why
couldn't it be done in Kumamoto? There were all-hands meetings with
the plant supervisor daily on this problem.

One day, a female shift worker at the plant stopped at a crossing for
the Kagoshima Line which ran in front of the factory. This was on her
way to work. It was a rare event, but this day, she had to wait while
a long freight train passed. Rumbling vibrations were sent through
her legs as the train passed. The thought crossed her mind that these
vibrations might have some sort of adverse effect on the products made
at the plant. While she was working, she paid attention to the time
and stopped when a train was scheduled to pass by. In the factory,
however, she couldn't feel anything unusual. She still wondered,
however, if the machines were not being affected. She reported her
concerns to the foreman, suggesting that the precision machinery in
the plant might be so affected.

The plant supervisor said, "That's it." He reacted immediately by
digging a large ditch between the plant and the railroad tracks and
filling it with water. The result was a drastic decline in the number
of rejects.

That woman was 18 years old. This woman took pride in the products
made by her company and identified with it. It is my feeling that
this type of result is due to the vast differences in our formal
education system.

In any case, when it comes to economics among the free world
countries, the basis for existence is economic warfare, or, if that is
too harsh of [a] word, in economic competition. It is probably
natural, therefore, that various cheerleading groups of the other
party will rough you up by calling you unfair, but we cannot stand
still and be defeated just because our adversary is making a lot of
noise. This is exactly the position Japan is in today.


6.0 IS AMERICA A COUNTRY WHICH PROTECTS HUMAN RIGHTS? (Morita)

6.1 Workers' Rights Are Ignored by American Companies

American demands of Japan may increase in the future but America has a
great many defects of its own, to which we must continuously direct
its attention.

My long observation of American corporations leaves me puzzled about
American human rights legitimacy. Human rights are held to be such
high moral values in America and it preaches on the subject
continuously all over the world. America has been criticizing and
condemning nations such as South Africa and Afghanistan on human
rights issues; however, I must ask Americans if they are applying
these same standards to their own workers.

American corporations hire workers right and left and build new plants
all over whenever the market is bullish, in an attempt to maximize
their profits. Yet once the tide shifts, they lay off workers simply
to protect company profits. These laid-off workers have nothing to do
with poor market conditions.

American corporate executives are of the opinion that it is a
corporate right to pursue maximum profits and that fired workers
should be able to live on their savings. However, people do not work
for wages alone. Work has more meaning to most people than just as a
means of subsistence. A Japanese worker has a sense of mission in
holding his job for his lifetime as well as supporting the corporation
which provides him with meaning to his life. This may well not be the
case in America. American workers may only expect a comfortable wage
for their work. However, this attitude could change. People can
easily develop loyalty to a group or to a company to which they
belong, depending upon conditions and guidance provided. This sense
of loyalty to the company is a formidable asset. Repetitive hiring
and firing denies any possibility of cultivating a sense of loyalty.

I must ask American executives if they regard workers as mere tools
which they can use to assure profits and then dump whenever the market
sags. It seems that workers are treated simply as resources or tools
rather than as human beings with inalienable rights. I would like to
suggest that they should first do something to protect the human
rights of workers in America before they start asking other nations to
protect and enhance the human rights of their citizens. There are
good reasons why American labor unions must be confrontational in
protecting their members and attempting to assure maximum wages during
periods of employment since they have no assurance that the jobs will
continue. Attitudes of executives are not actually much different
than those of the union to the extent that they grab whatever they can
- as much as half the company's annual profits in the form of huge
bonuses, claiming that this is just since they were responsible for
the profits.

A corporate chairman with whom I am acquainted, complained that he has
no use for all the money he receives. His company is doing well and
his income is in the multi-million dollar a year range. His children
are all grown and he and his wife already have vacation villas, a
yacht and a private airplane; he said they just have no way to spend
any more money on themselves.

Japanese executives work morning to night to improve the position of
their companies, and yet the majority of their salaries are wiped out
by taxes. The income gap between American and Japanese business
executives is astounding. In Japan, even if one works very hard to
increase his income to assure himself of some of the amenities of
life, there is no way that he could expect to equal the luxuries
enjoyed by American executives. Mr. Matsushita, probably the
wealthiest man in Japan, when traveling abroad with his secretary,
uses regular commercial flights. Having a private plane is simply out
of his realm of consideration.

There is some talk in Japan concerning levying taxes on profits
generated by the founder of a corporation. I am opposed to this
proposal as I believe the spirit of free enterprise must be protected.
While an unbridled pursuit of personal gain is not ideal, those who
have created new business through extraordinary effort and who have
made this contribution to society, should be rewarded financially to a
certain extent as this will provide encouragement to young people,
motivating them to follow their dreams and create new industries.

The current popular idea that everyone belongs in the middle class and
the wealthy are suspect may undermine the very basis of a free
economy. The Liberal Democratic Party, however, tends to accept this
premise, as put forth by the opposition for the sole purpose of
parliamentary manipulation, which is a shame since they have a
300-seat majority.

Japan has been a practicing free economy and a good majority of the
people do in fact belong to the so-called middle class, which I think
is marvelous. We have no real social classes and everyone is free to
choose whatever profession or occupation they wish.

Today in Japan, nearly all company executives dine out on company
accounts and ride in corporate-owned cars. As a child, I never saw
this kind of lavish living by corporate executives such as my father.
He had a car and a chauffeur, but they were financed directly by him,
out of his own pocket. It would be beyond his comprehension to use a
company car and driver for his personal use. I am not particularly
opposed to such benefits enjoyed by today's executives, as they can be
correct rewards and incentives.

American corporate practices, from my personal observations, are
extreme. An example is the so-called "golden parachute," which is the
ultimate executive privilege. When one's reputation as an executive
is well established, and he is hired by another company, his contract
may well contain these "golden parachutes." The executive may demand
a certain percentage of corporate profits as his bonus, or perhaps
some stock options. Upon retirement, he may still receive his salary
for a number of years. Should he pass away during this period, his
wife may be entitled to receive all or a percentage of these benefits.
Should he be fired, for whatever reason, he may still collect his
salary under his contract. A contract is a contract and "golden
parachutes" are a part of the system.

So even though the corporation may stall or crash, the executive is
equipped with his "golden parachute" and is thereby guaranteed to land
safely and comfortably. He may go to Florida and elsewhere to enjoy a
rich retirement life. Who suffers? Who suffers is America: the
American economy suffers from this outrageous system.

6.2 American Executives Prefer Immediate Rewards

Poverty is very visible all over America, particularly among blacks
and Hispanics. The minority issue is a crucial one in America. The
gap between rich and poor is enormous. Only one percent of the
population controls 36% of the national wealth, an outrageous
condition that should somehow be corrected.
A free economy basically should assure profit to anyone who works.
Yet if an individual's gains go to the extreme, he becomes a celebrity
and an egotist. This is what I have seen to be the case in many
corporations today.

Such individuals regard their employees as their own tools to enhance
their personal performance for which they collect all the rewards.
Should one fail and be fired, he will land comfortable on his feet,
thanks to his golden parachute. As an example of an extreme case of
such, a friend of mine mismanaged his company while he was its
chairman. The company failed, but he and his wife are leading a
luxurious life, something that would never happen in Japan. This man
simply played the American game. He had no real intention of
remaining with that company in any case; he was only working to
maximize his personal income during that time.

I have been involved in a number of joint venture projects in America.
I make every effort to improve my joint venture situations. I want to
close the deal as quickly as possible whenever we are involved in
substantial capital investment. When we spend capital on facilities
investment, we are entitled to tax benefits. I like to utilize the
extra profits generated by these tax benefits to get rid of debt
service. Whenever I suggest that, my partners ask "why do we have to
sacrifice our profits for people in the future?"

For me, the most crucial objective is to make the company healthy and
free of debt service, hoping that our successors will do the same for
their successors by availing whatever profits we get from repaying the
debt, while my joint venture partners feel that their personal gains
should not be so sacrificed. They have no intention of remaining with
these companies for very long and so they want to increase their
personal income by maximizing disposable company profits in the short
run.

For example, they moved production facilities to Singapore or Japan
when the U.S. dollar was high because they could not expect to
maintain high profits when production costs were high.
This is the case in the semiconductor industry as well. Production
has been moved out of the U.S., leaving production primarily with
Japan. This has deprived America of the capacity for anything other
than 256K bit chips. It is cheaper and easier to buy them from Japan
rather than dealing with expensive, unionized workers in America.
These very same business executives have been blaming the trade
imbalance and the Japanese trade surplus for their difficulties while
at the same time choosing to import these products from Japan. Japan
has not forced them to buy its products, but it cannot begin to catch
up on orders placed by American firms.

6.3 A Japanese Corporation is a Community Bound Together by a Common
Destiny

The fundamental principles which govern a Japanese corporation are
basically different from those of an American corporation, from the
viewpoint of both executives and workers.

The structure of pre-war Japanese corporations bear some resemblance
to American corporations today to the extent that the president could
fire anyone at his discretion. A variety of labor activities were
implemented to meet such situations. Taxes were low and executives
were leading comfortable lives, able to have company stock allocated,
assuring themselves of a comfortable retirement. A top executive was
able to buy a house with just one bonus. By the time he retired, he
could have several houses for rental, which alone would have ensured a
luxurious life.

After the war, General MacArthur changed Japanese labor laws as well
as tax laws, among other things, which put Japanese business
executives in a different situation. First, they were now unable to
fire employees at their discretion, not even to reduce the size of
their labor force. At times a company must reduce the size of the
work force if it cannot afford to keep them or if they are
unproductive.

When I first found that American companies can hire and fire and
rehire at will, I wondered perhaps if Japanese companies were more
charitable organizations than profit making institutions. However,
Japanese managers have developed a concept which, in essence binds the
company, workers, and management, into a community with a common fate
or destiny. I have explained to American corporate managers that in
Japan, once an individual is hired, he has been hired for life and
unless he commits some serious offense, the company cannot fire him.
Americans want to know how in the world we are capable of operating
profitably. I say that since a Japanese company is a community bound
together by a common destiny, like the relationship between a married
couple, all must work together to solve common problems.

This concept of a fate-sharing community might sound particular to
Japan. However, recently, it appears to have had some impact on
American corporations, which are showing interest in the Japanese
corporate management system. They seem anxious to absorb some of the
positive elements of the Japanese system.

When I find an employee who turns out to be wrong for a job, I feel it
is my fault because I made the decision to hire him. Generally, I
would invest in additional training, education, or change of duty,
even perhaps sending him overseas for additional experience. As a
result, he will usually turn out to be an asset in the long run. Even
if the positive return is only one out of every five, that one
individual's productivity will cover the losses incurred by the other
four. It is a greater loss to lose that one productive person than to
maintain the presence of the four incompetents.

In a fate-sharing corporation, one capable individual can easily carry
a number of other not-so-capable individuals. The confidence of
Japanese employees in their company, knowing that he is employed for
life, means that he will develop a strong sense of dedication to that
company. For these reasons, Japanese corporate executives are anxious
to train their employees well, as they will be their successors.

As the chief executive officer, it is my responsibility not only to
pursue profit, but also to create a community where those I have
employed can complete their careers 20-30 years from now with the
feeling that he had truly made a good life with the company.

Japanese company employees know that they are members of a community
bound together by a mutual fate for which they bear the hardships of
today in anticipation of a better future. There are many company
presidents today in Japan who at one time or another served as union
leaders. This fact makes present union leaders feel that they too
may, sometime in the future, move into management positions within
their company, and therefore their long term interests are closely
tied to the company. They do not pursue short term, myopic profits
for the immediate future. When the company proposes a plan to save a
certain portion of profits for facility investment or to pool to the
following year, unions may well be willing to make compromises,
because they know that the future of the workers is tied to the future
of the corporation. I would like to ask presidents of American
corporations if they ever heard of any American union leaders who have
become heads of corporations. Japanese executives have a
categorically different corporate philosophy than do American
executives, who are more anxious to demonstrate profitability to
please stockholders. I have asked Americans what, in their minds, is
the meaning of "company." In my mind, it is a group of people
conforming where interests are shared. I must point out that in the
American interpretation of company, this concept does not exist. It
is my firm conviction that man is created equal, irrespective of color
of skin or nationality and it is natural that my concept of company
includes the employees of my overseas Sony operations. My California
plant opened in 1972, initially with 250 employees. Soon after the
plant opened, we were hit with the worldwide oil crisis, which caused
a recession. The California plant was not immune to this development
and the facility lost business and was unable to support its 250
employees.

The president of Sony America was, of course, an American and he came
to me saying that there was no other choice but to lay off some of the
employees. I refused his proposal, telling him that I would take the
responsibility for possible losses in order to retain the employees.
We sent capital from the Japanese headquarters to sustain the 250
person work force for some time. During this period, there was not
enough work to keep everyone busy, so we developed educational
programs, out of which grew not only a sense of appreciation, but also
a real emotional involvement with the company. They began to feel
that the plant was their home, and began to clean and polish the
facilities, and take care of their work sites on their own. These
people became the central core of the California plant, which now
employs 1500 people. They don't even talk about unionizing
themselves. American unions are basically industrial, which means
that there is always active union leaders from outside who attempt to
unionize our plant. Our workers had T-shirts made, with their own
money, saying "WE DON'T NEED THE UNION."

The United Kingdom has a unique law which unionizes every company.
Sony U.K. is no exception. Yet our women union members insisted, in
an interview on the BBC, that their union is different than other,
ordinary ones. This is a positive demonstration of the feeling that
we all share the same fate, no matter where we are in the world.
In the U.S. and the U.K., most employees never have even seen their
top executives. When I go to one of our plants, I normally mingle
with the employees and eat together with them in the company
cafeteria. This helps in developing communication and trust. It may
be a bit difficult to expect the same response from foreign employees,
but it is still the best approach. The Japanese system is not
completely applicable to the American system, of course. Yet patient
demonstration to show that the company truly wishes to protect their
interests, even when business is at its worst, will show results.
People tend to develop trust under these circumstances. The best
thing a company can do is to treat its employees as dignified human
beings.

6.4 The Japanese Approach Can Be Used Worldwide

European corporations appear to be treating their employees more
humanely than their American counterparts, although they are still far
from the concept of lifetime employment. Large corporations do not
hesitate to lay off employees whenever business is down; they even
close operations without notice or sell out, treating employees as if
they were tools or equipment.

There is also obvious class discrimination within companies.
Engineers, for example, wear white collars, stay in their offices, and
seldom show up in the factories. They want to tell workers what to
do, rather than donning blues and showing them. In my company, all
workers wear the same uniforms. I also wear the same uniform, not
only in the plants, but also at company headquarters. All our plant
managers do the same. Those who are in training have been instructed
to walk through the plant frequently, establishing personal contacts
with the workers. Those who become foremen or section managers are
encouraged to hold brief meetings each morning with their subordinates
to read their mood and detect problems in advance. They are
instructed to talk with those who seem ill or depressed, to find out
if they need medical care or if they are having family or personal
problems. Should this be the case, they should be allowed to take
time off and deal with these problems first, while the other workers
cover for them. This also helps the sense of togetherness among
workers.

On the occasion of 20th and 25th anniversaries of Sony America, my
wife and I visited all our American plants, gave talks, had dinner
with our employees and shook the hands of all our workers. Since at
some plants we had three shifts, we had dinner three times in one day,
with the night shift taking their turn at 4:00a.m. I told everyone
that we greatly appreciated their contributions which helped make the
25th anniversary a celebration and shook everyone's hand. I was able
to feel their response even physically. These employees told me that
this experience was something they never would have had in an American
company. I felt our Japanese approach was not foreign to them at all!
One episode made me particularly happy. I visited one of our rather
small laboratories, and said that I wanted to meet all of its members,
[when] the head of the lab asked if he could take my picture. He took
his camera from his desk drawer and took me to each member of his
staff, introducing me to him or her and taking our picture as we shook
hands. There were almost 80 people at this facility and he promised
to make a print for each person. I was surprised that this typically
Japanese activity was taking place in a facility where there were no
Japanese! There again, I felt that we are all basically the same,
irrespective of national and cultural differences.

Our style and our efforts have a ripple effect and make other members
of our company feel the Sony spirit. I am not saying that whatever
style and customs we have developed are automatically good and
acceptable everywhere. What I am emphasizing here is that the basic
attitude of a corporation and its philosophy can be understood
worldwide, and certain aspects of Japanese tradition and style can be
rooted overseas.

On the other hand, I recognize fully that certain aspects of American
business administration, such as numerical and analytical operations,
are excellent as we have sent many individuals from our company to
American business schools to learn such matters. Combining good
traditions and practices of both the Japanese and American systems
will, I believe, make for a very strong corporation.


7.0 LET'S BECOME A JAPAN THAT CAN SAY NO (Morita)

7.1 Saying "No" Actually Represents a Deepening of Mutual Understanding

It is inevitable that Japanese companies have been establishing
American operations. America after the era of Reaganomics is now
responding to that trend with new Bush Administration policies. In
response, Japan should now begin to make it a habit to say no when its
position is clearly negative. It [is] the rule in the West to say
"no" whenever one's position is clearly negative. We are in a
business environment where "well" or "probably" have no place in
normal business conduct. I have been saying "no" to foreigners for
the last thirty years. Clearly, the Japanese Government has missed
many, many opportunities to say "no."

Take the auto trade issue, for example. America forced Japan to limit
its auto exports to two million units per year under the guise of
voluntary restrictions. When the American market became more
lucrative, and the number of imported cars could have been increased,
American auto manufacturers demanded that the quota be tripled. MITI
and the Prime Minister gave in to American demands.

In my opinion, this was a great mistake. Both the MITI minister and
the prime minister at that time should have taken the position that
the American demands were unfair. The Big Three had already increased
their profits enormously and individuals such as Lee Iacocca and Roger
Smith were receiving more than a million dollars each in bonuses.
They simply demanded special treatment in order to increase profits
from the Japanese imports which they sold under their company brands
when they requested that the quotas be tripled. That was the time for
Japan to have said "you are being hypocritical, criticizing others as
unfair when in fact what you are demanding is what is really unfair."
The timing was crucial; unless one registers opposition or negative
reaction at precisely the right time, Americans take the situation for
granted and later insist that they were right as no opposition was
registered at the time of the demand. This has always been the case
in the past.

The trade imbalance is another case which should be scrutinized as to
whether or not American demands are based on fact and reality. I once
asked Americans to investigate what Americans had been importing from
Japan.

American imports from Japan are mostly products which require a high
tech capacity to produce. Many of these products fall into the area
of military procurement, but it is true that even the private sector
is buying Japanese products which are technologically indispensable.
Even some of the inexpensive home electrical appliances may be
obtained from Japanese manufacturers within a short time frame if they
require high technological skills in the production process.

America has left the production responsibility with Japan, resulting
in a heavy dependency upon Japan. American politicians only talk
about the results of this situation, blaming Japan for the trade
deficit to get votes. Yet it seems that these same politicians don't
even know specifically what it is that America buys from Japan. If
they took the time and the effort to seriously investigate the matter,
they could not condemn Japan so out of hand.

Japan should tell America that it may buy these quality products
irrespective of the exchange rates, even when the U.S. dollar falls to
the 100 [presumably yen] to 1 ratio. Artificial manipulation of the
exchange rate does not benefit the American economy. Such products as
transistors, which Sony originally marketed, may today be purchased
anywhere outside Japan, and so are not a matter of friction between
the U.S. and Japan. Products recently developed in Japan are not as
easily obtained elsewhere. There are some things that can only be
found in Japan and Japan cannot be blamed for over-exporting. Those
who say otherwise simply do not know the facts.

Computer terminals are in short supply and are being rapidly developed
in Japan. Japan should let America know what the situation is and
make the U.S. realize that the relationship between the two nations is
increasingly mutually dependent.

My purpose in advocating saying "no" is to promote that awareness.
"No" is not the beginning of a disagreement or a serious argument. On
the contrary, "no" is the beginning of a new collaboration. If Japan
truly says "no" when it means "no" it will serve as a means of
improving the U.S.-Japan relationship.

7.2 National Characteristics Which Make It Difficult for the Japanese to
Say "No"

The question arises as to who should say "no?" Japan's Confucian
background makes it very difficult for its people to say "no" within
the context of normal human relationships. In a traditional
hierarchy, subordinates dare not say "no" to higher-ups without
violating normal courtesy. The higher-up takes a "no" from a
subordinate as insubordination. In a staff relationship, "no" is
something to be avoided in order to maintain smooth human
relationships.

Living in a homogeneous society since childhood, we Japanese have
grown up without practical experience in quarreling and fighting in a
heterocultural environment. Many of us feel that others will
eventually understand our true feelings on an issue without [our]
verbalizing them. In short, we expect a lot when it comes to mutual
understanding. Americans may go directly to their boss to offer an
explanation when they feel they are not properly understood. Japanese,
on the other fand, even if they feel they are not properly understood,
remain hopeful that they will eventually be understood or that the
truth will reveal itself sooner or later. They do the same with
foreigners in foreign countries. They feel that sincerity and effort
should automatically be reciprocated. In my mind, this can only
happen in Japan, but never in foreign countries. Wordless
communication and telepathy will just not happen.

I admit that I may be more westernized than most Japanese, since I
believe that we should be more straightforward as we become closer,
and that a serious quarrel need not destroy a friendship. This may
not be accepted in a traditional Japanese relationship; we avoid
serious confrontation by turning away from the cold facts. Instead,
we tend to make loose compromises. It is quite simply not our
tradition to say "no" to our friends.

We should not expect to find a similar understanding from foreigners
concerning this particular Japanese mentality. It is too easy to
expect understanding of one's opposition without using "no." I could
say it is a Japanese defect to expect something without using the
rational verbal procedures.

If you stay silent when you have a particular demand or an opposing
position to express, the other party will take it for granted that you
have no demands or opposition. When you close your mind to the
outside, remaining in a uniquely Japanese mental framework, you will
be isolated in this modern, interdependent world.


8.0 LET'S NOT GIVE IN TO AMERICA'S BLUSTER (Ishihara)

8.1 Statesmen Ought to Make Best Use of All Available Cards

America has renewed its bluster in the last year. Politicians must
sense that they will win more votes bashing Japan than bashing the
Soviet Union. Criticism of Japan by U.S. politicians has taken on a
rather hysterical tone these days. I experienced it personally when I
was there and met with politicians who told me that there was a new
power shift between the U.S. and U.S.S.R., as if this development
should scare Japan somehow. These same politicians indicated that
since both Americans and the Soviets are white, at a final
confrontation, they might gang up against a non-white Japan.

Japan should never give in to such irrational threats. Japan also
holds very strong cards in high technology capabilities which are
indispensable to military equipment in both the U.S. and U.S.S.R. Yet
Japan has never played this card to improve its position vis-a-vis the
U.S. Japan could well have said "no" to making available specific
technology. Japan has substantial national strength to deal with
other nations, yet some of the powerful cards it holds have been
wasted diplomatically.

I happened to be in America at the time the U.S. Congress passed a
resolution to impose sanctions on Japan on the semiconductor issue.
Congress seemed to be very excited, almost in the same mood as was the
League of Nations when it sent the Litton Mission to Manchuria to
observe Japanese activities there in relation to the Manchukuo
incident.

I talked with members of Congress in this tense atmosphere, and I did
not feel they were conducting matters on a rational basis. Some
Congressmen were actually brandishing sledgehammers, smashing Toshiba
electronic equipment, with their sleeves rolled up. It was just ugly
to watch them behave so.

I commented at that time that the U.S. Congress is too hysterical to
trust. their faces turned red in anger and they demanded an
explanation. I told them: "Look -- only a few decades ago you passed
the Prohibition Amendment. No sincere Congress would ever pass such
irrational legislation." They all just grinned at me in response.
Yet I must admit, that it was Japan who aggravated the semiconductor
issue to such a low level, by not saying "no" on the appropriate
occasions.

After he was elected to a second term, Mr. Nakasone promised America
that Japan would avail highly strategic technology without giving
adequate thought to the significance of that kind of commitment. The
strongest card, which he should have played, was virtually given away
free to America. He probably wanted to impress America, hoping for a
tacit reciprocity from a thankful U.S. Unfortunately, it was only Mr.
Nakasone who recognized the value of that card at the time. Both the
Liberal Democrats and opposition parties overlooked the significance
of this issue. I assume that the leaders of those parties, such as
Takeshita, Miyazawa and Abe did not know it either. It is such a pity
that Japan's politicians are not aware of the political significance
of Japan's high technology capabilities.

In reality, Japanese technology has advanced so much that America gets
hysterical, an indication of the tremendous value of that card --
perhaps our ace. My frustration stems from the fact that Japan has
not, so far, utilized that powerful card in the arena of international
relations.

What Mr. Nakasone got out of the free gift was Reagan's friendship,
so-called. We all know that love and friendship alone cannot solve
international conflicts and hardships.

8.2 Nakasone Bungled the Relationship

I truly regret that Japanese diplomacy has been based on a series of
"yesses" instead of skillful manipulation of strong ace cards. Former
prime minister Nakasone has done a substantial disservice to Japan in
terms of his handling of relations with the U.S. These are among his
most unfortunate mistakes. He boasted of the so-called "Ron-Yasu"
relationship as if he had succeeded in bringing about a skillful
policy toward the U.S. In reality, he was simply a lowly yes-man to
Reagan.

It was actually I who introduced Mr. Nakasone to Mr. Reagan. I asked
one of Mr. Reagan's assistants if he ever recalled a "no" from
Nakasone to reagan. He immediately replied he did not know of any, and
Mr. Nakasone was a "nice guy with a sardonic smile."

Former Prime Minister Nakasone was in a position to know that Japan's
leading edge technology was superior to that of the U.S.; so much so
that Americans had become nervous concerning the magnitude of Japan's
superiority in the area. Yet he still did not say "no." Was he taken
advantage of? Did he have some weak spot as did the prime minister
(Tanaka) at the time of the Lockheed scandal during the Nixon
Administration? Otherwise, Japanese leaders who hold such high cards
should be able to play them in dealing with American demands.

The FSX, the next generation of fighters, developed by Mitsubishi
Heavy Industries during the Nakasone era, has become another source of
controversy in the U.S. as it relates to defense matters. Further
development of the FSX appears to be quashed by the U.S. I am unaware
of any deals made under the table, but there is considerable
frustration in Japan over the matter.

Mitsubishi Heavy industries is a conglomerate with a wide variety of
technology used in manufacturing advanced products. The chief
engineer there is a contemporary of mine who developed the most
advanced land-to-air missile. He is also the man responsible for the
design of the next generation fighter and he believes that Japan
should have its own capacity to provide such equipment, which of
course astonishes Americans.

The FSX is a marvelous and formidable fighter. No existing fighter,
including the F-15 and F-16 can match it in a dog fight. I recall
when Secretary of Defense Weinberger became serious about quashing the
FSX Japanese development plan, simply out of fear.

Unfortunately, Japan has not yet developed a powerful enough jet
engine, although I advocated such development while I was a member of
the Upper House. Japan still must purchase jet engines, which are
mounted on the F-15 and F-16. If America gets really nasty, Japan
could buy engines from France, which is quite anxious to export
military equipment (at the same time that that country's president is
advocating truces all over the world, I might add). If France is
reluctant to sell what we need, I would not mind going to the Soviet
Union, although the quality of the Russian engines is not particularly
impressive.

New Mitsubishi-designed jet fighters equipped with Russian engines may
only have a top speed of 95% of existing F-15 and -16 class fighters,
so one might think them inferior. On the contrary: their combat
capability is far superior in a dogfight situation. It can make a 380
degree turn [sic] with a third of the diameter needed by other top
fighters. The F-15 and -16 require 5000 meters; the Mitsubishi
fighter only requires 1600 meters. Just think of war as a game of
tag. What is necessary is not maximum speed but great maneuver-
ability. Mitsubishi's FSX fighter can get right on an enemy plane
and send heat-seeking missiles with 100% accuracy. Incidentally,
there are two types of air-to-air missiles, heat-seeking and
radar-controlled. The radar-controlled type may even fail to hit a
jumbo jet, while the heat-tracing type can fine-tune its direction to
head for the enemy's source of heat.

The FSX was a surprise to Americans, as were to Zero fighters at the
beginning of the Second World War. They never expected to see such an
advanced fighter as the Zero, which virtually controlled the air at
the beginning of the war. That such a formidable weapon as the FSX is
in production today outside the U.S. came as a shock to Americans.
The Japanese FSX is equipped with four vertical fins, similar to a
shark's fins. Each acts as a steering mechanism, like the steering
wheel of a four wheel drive [four-wheel steering intended, presumably]
automobile that can make a complete turn in a small area without
moving back and forth. Such a marvelous idea probably is not the
monopoly of Japan, but it was a Japanese manufacturer who developed
the idea to reality, thanks to Japanese advanced high technology.

Russian fighters are also equipped using Japanese know-how, especially
in the areas of ceramics and carbon fibers. Special paints on
American reconaissance planes which assist in avoiding radar detection
are also made in Japan.

Shocked by the high standards of the FSX, I guess that the U.S.
pressured Mr. Nakasone, probably citing his earlier commitment on
technology. His submission to American pressure eventually caused the
mothballing of the FSX, to be replaced by future products of a joint
U.S.-Japan development plan. In November 1988, the governments signed
an agreement that set the course for the joint development of the FSX;
an agreement which leaves many unsolved problems at the industry
level.

One of the manufacturers involved, General Dynamics, was very anxious
to assume the initiative on the project, dividing it up among others.
It met with resistance from Mitsubishi, and General Dynamics came up
with a plan that would separate the development of the left and right
wing -- a very peculiar approach.

In short, America wants to steal Japanese know-how. They cannot
manufacture the most technologically advanced fighters without
advanced ceramic and carbon fiber technology from Japan. That is why
America is applying so much pressure, attempting to force Japan to
come to American terms. Some of Japan's industry representatives
appear willing to deal with the Americans under the table, probably
with the good intentions of smoothing U.S.-Japan relations on the
issue. I happen to disagree with such an approach. We just cannot
give in on this issue. We must be persistent -- to the maximum
degree. If America does not appreciate a rational division of labor
on the project, we should discontinue the project and start all over
from scratch.

The joint development idea is a legacy of the Reagan-Nakasone era.
Both men are now out of power and we can retract the whole thing and
tell the U.S. that we have decided to develop our own project without
its participation. It is our choice. We must bluff to counter
American bluff, otherwise we will continue to be the loser.

I brought this subject up the other day to Mr. Nakasone. He
responded, "Well, you had a pretty sharp interest in that issue at
that time." I said that I was "probably the only one concerned about
the issue at the time." Mr. Nakasone then insisted that he made the
decision to compromise in order to maintain good U.S.-Japan relations.
He also admitted that America was then already very much afraid of
further Japanese technical advances. Well, compromise is fine, but in
reality this was not a compromise: it was a sell-out -- a simple
sell-out of Japan's interests.

I don't regret it any less when we make the silly mistake of not
saying "no" especially when we hold the strong cards. Such freebies
are now taken for granted and America comes back with more bluff. On
the record, U.S.T.R.'s Yeutter stated that the "application of high
pressure is the best way to manipulate Japan."

My position may draw some criticism in Japan, where it probably will
be said that I am playing with dynamite in dealing with America in
this fashion. It goes without saying that an equal partnership must be
carried out without humiliating pressure or compromise as the result
of such pressure. This is the reason I am advocating that Japan say
"no." "No" is an important instrument in the bargaining process.

8.3 Diplomacy Should Be Free of External Pressures

Diplomacy which lacks the "no" factor cannot be diplomacy for the
benefit of Japan. Japan has a solid basis for saying "no" on many
occasions. All we must do is play our cards wisely, playing our ace
intelligently. Japan is very poor at diplomatic tactics. It is a
wonder too me that Japan has failed to recognize that its initiatives
are instrumental in the ultimate decision-making process in the
international arena.

Mr. Glen Fukushima, an American of Japanese descent in the office of
the U.S.T.R. (Deputy Assistant U.S.T.R. for Japan and China), who was
acquainted with Senator Aquino of the Philippines while both were at
Harvard, is one of the most capable Asian specialists. His wife is an
intellectual Keio University graduate, who prefers to live in Japan,
forcing Glen to commute to Japan two or three times a month.

On one occasion, I had dinner with him and asked him what America's
next Japan-bashing scenario would entail. He replied that the U.S.
would take up the distribution issue since this cannot be rectified by
Japanese politicians without pressure from the U.S. I have to use
American pressure in order to accomplish a national objective, yet, I
must admit that the distribution system is one of Japan's biggest
headaches today. There is no question that the high prices in Japan
are caused by the distribution system itself, which is made worse by
Japanese politicians.

There are domestic areas where we Japanese must say "no" also, even
before we say "no" to outsiders. The liberalization of rice is one
such issue. Opinions on the rice issue sharply divide politicians such
as I, whose constituents are urban, from those representing farmers.
Former Minister of Agriculture Sato is a good friend of mine, but his
advocacy of food security is becoming diminished. Inevitably, mutual
dependence is becoming more and more a reality in our world today.

America was not even able to place [a] ban on exports of grain to the
Soviet Union when the Russians invaded Afghanistan. There would have
been too much pressure from American farmers. If that is the case, it
would probably be practically impossible to put a ban on agricultural
exports to Japan. The rice issue has its sentimental aspects in Japan
as well as its practical aspects, which make the overall issue more
complicated. Yet it is obvious that we must liberalize the market.

Such is also true of construction projects. It is inevitable that we
allow foreign construction firms to participate in Japanese public
construction projects. Japanese general contractors have been
maintaining prices as much as 40% higher in comparison to foreign
bidders, due to bid-rigging traditions to assure a monopoly on
business for themselves. There is no way these practices could ever
be free of foreign criticism.

In the course of my conversation with Glen Fukushima, I asked whom
among the Japanese negotiators he considers the best. He immediately
came up with the name of MITI's Kuroda, whom the Japanese press used
to criticize for his tough positions. The press claimed that his
participation aggravated the problems with the U.S. The Americans
criticized him for being stubborn. Strabgely, the American negotiator
named him the most effective. He is stubborn and is able to say "no"
decisively whenever he should do so. The Americans usually try to
overpower negotiations by increasing pressure. But Kuroda does not
feel that he must say "yes" to American pressure. America is a giant
in many ways, and, in many ways, Japan is a dwarf. This obvious
contrast has been exploited by the Americans often in the past.

Mr. Kuroda kept pointing out that irrational pressure is not always
the result of reason or logic, and reinforced this position by
withstanding increased pressure. His "no" is not a no for its own
sake; he always states his reasons. This is the proper approach and
attitude in negotiations. In the past, there have been allegations
that Japanese logic and opinions have not made any sense to the other
side.

When the opposing side points out that Japanese opinions and demands
have no logical basis, all of a sudden the illogical Japanese start
saying "yes, yes, yes..." in a panic. But these "yesses" do not
necessarily mean yes in the sense of positive assertion. At any rate,
the other side then comes to the conclusion that Japan will not take
action unless pressure is placed on them. This is a rather unfortunate
situation for the people of Japan. The Japanese image of being soft
in the face of pressure does not help Japan's diplomatic efforts at
all.

I have often suggested that at least half of Japan's diplomats
stationed abroad be civilians. Those who are in business and other
professions who have dealt with foreigners are in a better position to
represent the interests of Japan than are career diplomats. Send Mr.
Morita to America as our ambassador: a brilliant idea! But it should
not be just an idea. I truly believe that it would be most beneficial
to the U.S.-Japan relationship to have such an ambassador from Japan
to the U.S.


9.0 THE U.S. AND JAPAN ARE "INESCAPABLY INTERDEPENDENT" (Morita)

9.1 No Way To Avoid the Trade Frictions

Recently the expression, "inescapable interdependence" has been heard
quite often among Americans. If we dare to explain this concept in a
more extreme way, perhaps we can say it's a "fatal attraction". With
this trend now prevailing in the world, we have no choice but to live
cooperatively. Everyone on earth, not just the United States and
Japan, is mutually dependent and this is unavoidable. This is the
times that we are facing now. What does cooperation mean?

A Japanese tends to say, "Let's work together". But I often wonder
whether they really understand its meaning. This can be applicable to
Americans as well. We are at home using this expression but it seems
to only be used as a convenience. Furthermore it is out of the
question to force "cooperation" through threats.

To cooperate means to maintain harmony. It is not harmonious to force
your adversary. When they cope with you, you too, must cope with
them. You have to give up some of your interests; you must abandon
something.

I tell people whenever I have a chance that we know what it is to be
selfish but hardly anybody is aware when he himself is being selfish.
We say that one is selfish but actually this person probably has no
idea that he is perceived as such. In this sense, Japan also can be
thought a little bit selfish by other countries, although we hardly
have such ideas.

Looking for the reason, we are so perceived, the opening of the
domestic market can be one example. Everyone agrees that we should
open our markets to foreign traders, but when it comes to individual,
this is hard to actualize since someone says, "no, I cannot accept
this", and then someone says, "no, I cannot accept that." Although at
summit meetings, Japanese leaders assure others that they will do
their best, and they actually do try to open the market. In the end,
however, this is never actualized since their promise goes against
domestic interest groups and they are forced to back down. Only
lip-service followed by no achievement might result in being called
"liars" and this is surely worse than "selfish".

The development of communication technologies means this is a
shrinking world and any country will be left alone if it does not talk
frankly to its people and friendly countries about the compromises
that they must accept.

Free people in the free world ask for their freedom but at the same
time they respect the freedom of others. And I think it is genuine
freedom to think "we should abandon some so that we can respect
others." It will simply increase friction if we just look out for our
own benefit, and put priority on winning the race based on the premise
that we simply can focus on our interests alone since we are in the
world of free economy.

We should also recognize that friction seldom occurs with those who
are far from you. Friction occurs as we move closer. We cannot
escape from the trade friction as long as we belong to the world of
"inescapable interdependence".

9.2 Japan's Central Role is Asia

The closer we become, the harsher the friction can be. So it would be
wise for us to prepare for problems with neighboring Asian countries.
I went to Singapore recently to attend a ceremony marking the opening
of our new plant, and had a chance to talk with President Lee Kuan Yew
who has been a friend for a long time. He invited me to his home, we
talked over dinner and I stayed with him.

The plant our company opened this time in Singapore is operated
automatically by robots. We use materials Singapore supplies and
employ able engineers graduated from good schools in Singapore,
producing special parts in large numbers. The plant itself will be a
foothold to supply the products all over the world. When I proudly
held forth my new plant, he was very pleased and said that in the past
when Japanese firms opened plants in his country, they needed a large
number of employees, where they in fact have never had enough
personnel. Because of the nature of his country, that is, Singapore
is a small island, this caused wage increases at a drastic pace. This
is what they had wanted; a plant with sophisticated technology.

Transferring our technologies, not teaching management, I believe, is
the best way to alleviate friction between Southeast Asian countries
and Japan. These countries, NICS, then NIES, are now the Four Tigers
or Five Tigers. It might be too much to say they developed thanks to
the Japanese economy and industrial technologies, but I believe we
contributed to them in such a way that contributed to their current
prosperity. From now on Japan will need to take a major role in Asia.
You are already able to see this is happening when you recognize that
Tokyo has taken on a major role as a finance and money center like New
York and London.

In the past, we yearned to go to New York when we were young.
Similarly, the youth of Southeast Asia yearn to visit Tokyo or
Disneyland in Japan. I should avoid the expression, "leadership", but
Japan has begun to assume that role as a center in Asia.

To take on the role as an initiator means we must also be able to take
on the role of arbitrator. That is, we must think carefully what
constitutes a real leadership role in this mutually dependent world.

9.3 America, You Had Better Give Up Certain Arrogance

As you (Mr. Ishihara) mentioned before, rapprochement between the
United States and the Soviet Union and Japan's involvement in their
military strategies because of its highly-sophisticated technology
directly affects new trends on the world scene.

I do not think anybody imagined a decade ago that these two
superpowers would be mutually dependent on each other in a military
sense and that there would be a strange structure in the power balance
among the United States, the Soviet Union, and Japan. Nobody can deny
that we are going to have a totally new configuration in the balance
of power in the world.

Facing this, most important to Japan in the practical sense is the
relationship between Japan and the United States. Japan needs the
United States. I think the United States need Japan as well. It is a
bond we can never cut, and this might be the "fatal attraction"
between us. Since we can never seperate, we had better look for the
way to develop through cooperation a healthy relationship through
cooperation. And we want to ask you Americans, "what is going on now
in your country? Do Americans really understand the meaning of
'freedom' and the role of Japan which is so necessary to the United
States?." When you see present conditions, it is obvious that the
United States is not strong enough in a fundamental and structural
sense. So, I think what is most important is that we ask them frankly
as equal and not as a subordinate, "Are you really sure that you are
all right?" We will be in trouble as will the whole world if the
United States is not strong enough in the fundamentals and this means
more than talking about something that is current. It must be
recognized by Mr. Bush as well. In this sense, it is important for
Mr. Takeshita to deliver our message correctly at the coming summit.

In my understanding, however, these summit meetings are held according
to an itinerary prepared at the working level and they decided what
was supposed to be said by the leaders. In negotiations among
business leaders, we, top management hold discussions face to face,
saying "yes" or "no", or "if you do that we will do this." However,
we have a tendency to prepare answers for negotiations even in
business world in Japan. Take my case, for example. Once a chairman
of a large Japanese firm was vistiting me and I planned to talk to him
face to face. Then, someone from that office called us and asked what
I was going to talk about when we met. "Our chairman is going to say
such and such. How will you respond?" They wanted to prepare all
answers beforehand. I do not think we need to have meetings if the
content is planned beforehand. I want Mr. Takeshita to say correctly
how we, Japanese, see the present situation in the United States and
tell them clearly what we want to do. I think we should tell them,
"please do not cling to the image that you are the superpower, but
rather look for the way to get your economy on the road to recovery."

We should tell them, "we are going to back up your dollar, so face the
fact and issue yen-bonds, for example, as Carter Administration issued
pound-bonds." Americans have to abandon the idea, such as, "our
federal obligations do not bother us since we can print more green
backs." They have to change the way they think about their own
economy. To this end, we Japanese must deliver the message, "if you
cannot make both ends meet, we cannot either." We must do this even
if it takes time to make them understand.

It is high time to let them know we might go bankrupt together if
things are not worked. The United States and Japan relationship is in
serious trouble. Because of our historical discipline, Japan has
adhered to the principle that "silence is golden," but I believe Japan
must insist that the United States do what must be done. An outspoken
person like me is easily criticized from every corner and I am sure
Mr. Ishihara has had the same experience since he is also very
outspoken. But to be silent and to put up with things do not work at
all in the West. As Ishihara has suggested, I think we should say
what we have to say. If not, I am afraid we will lose our own
identity as Japanese in the world.


10.0 AMERICAN ITSELF IS UNFAIR (Morita)

10.1 America Lacks Business Creativity

Americans and Europeans are always saying "We're getting ripped off by
Japan. They take the ideas we have invented, make products, and then
the onslaught comes. We are being damaged, they're disgraceful."

Japan has certainly done better more recently, but the U.S. and Europe
are very much advanced in basic research.
Last year, I was invited to speak to about 100 researchers who worked
at the Bell Laboratories at ATT.

The Bell Laboratories have about 7 people who have won the Nobel
Prize. To me, it seemed that I would be speaking before some of the
greatest men of our time. Prior to the speech, I was shown around the
Bell Laboratories, where a number of wonderful research projects were
underway.

As you must know, the transistor and the semiconductor, which are at
the root of the current revolution in industry were invented at the
Bell Laboratories. It really brought home to me how wonderful America
was.

The basic message I brought that day was that this type of research
was extremely significant academically in terms of both science and
culture, but to be significant from the standpoint of business and
industry, two other types of creativity, in addition to the creativity
required to make the original invention, were absolutely necessary.
Industry requires three types of creativity. The first, of course, is
the basic creativity necessary to make technological inventions and
discoveries. This alone, however, does not make for good business or
good industry.

The second type of creativity that is necessary is that involving how
to use this new technology, and how to use it in large quantities and
in a manner that is appropriate. In English, this would be called
"product planning and production creativity."

The third type of creativity is in marketing. That is, selling the
things you have produced. Even if you succeed in manufacturing
something, it takes marketing to put that article into actual use
before you have a business.

The strength in Japanese industry is in finding many ways to turn
basic technology into products and using basic technology. In basic
technology, it is true that Japan has relied on a number of foreign
sources. Turning technology into products is where Japan is number 1
in the world.

Sony was the first company in Japan to license the transistor patent
from Bell Laboratories, back in 1953. At that time, the transistor
was only being used in hearing aids. We were repeatedly told to take
this transistor and manufacture hearing aids.

When we brought this new transistor back to Japan, however, Mr. Ibuka
of Sony said, "There is not much potential in hearing aids, let's make
a new transistor and build radios." At that point, we put all of our
energies each day in developing radios which used transistors. One of
our researchers during this development effort, Mr. Esaki,
subsequently went to work for IBM where he earned a Nobel Prize, but
it was at our company where he did work worthy of the Prize. There
are a number of Japanese who have received Nobel Prizes, but Esaki was
the only one who worked for a research laboratory of a company. We
poured money into development of new transistors, and developed small
radios for the market, an effort that was worthy of the Nobel Prize.

It was an American company, however, who made the first transistor
radio. I became a salesman, and took my product with full confidence
to the United States to sell it. Prior to this sales effort, the
newest invention was a vacuum tube type of amplifier which required a
lot of space. When the American company, which was a famous radio
manufacturer, was initially rebuffed by people telling him "since we
have this great sound and large speakers, who would want to buy your
little radio?", that company just quit trying to manufacture
transistor radios.

We, however, had something else in mind as a way to sell these radios.
"Currently in New York, there are 20 radio stations broadcasting 20
different programs during the same time frame. If everyone had their
own radio, then each person could tune in to the program he or she
wanted to listen to. Don't be satisfied with one radio for the whole
family, get your own radio. The next step was to do the same for
televisions." This was a new marketing concept. One radio for one
person became a kind of catch phrase in this campaign and the result
was that Sony transistor radios became famous throughout the world.

While it was true that Sony was second in developing the transistor
radio, the company who did it first lacked the marketing creativity,
so without much thought, they simply quit and pulled out of the
market.

America has stopped manufacturing things, but this does not mean that
they do not have the technology. The reason why the link between this
technology and business has not been firmly connected is because they
lack the second and third types of creativity, turning products made
with the new technology into a business. I feel that this is a big
problem for them. This exact area happens to be Japan's stronghold
for the moment.

When I went to speak at the Bell Laboratories, I got the chance to
look at a lot of their research on advanced technology. I felt that
they may well come up with something new that was even more important
than the transistor, but since Bell Labs is a part of ATT, they are
not thinking of anything except telecommunications applications.

There is not one person there who is thinking about how to use the new
technology they are developing as a business. I think that this is
one area where the U.S. comes up wanting. It is my feeling that even
though times are good in American now and employment is up, the time
will never again come when America will regain its strength in
industry.

There is a television network in the U.S. called CBS. CBS has a
weekly program which airs every Sunday evening called "60 Minutes,"
which has a very high viewership rating. This is a news program which
devotes segments just under 20 minutes to various stories and opinion
from around the whole world. More than 10 years ago, I was on the
program. This is a program that takes a lot of money to produce. A
crew followed me around Europe for about 6 months to prepare the
segment.

Now they want me to do another one. A cameraman followed me to
London, and when I went to Singapore, they followed me there too.
The other day, a famous and beautiful interviewer in the U.S., Diane
Sawyer, came to Japan to interview me for the program. We spent a
long time in front of the TV cameras, and the questions grew sharper.
This made me mad and at the end, it was like we were in a fight.
She asked me what I thought of Lee Iacocca. Since this is a program
he would be sure to see, I was frank in my statements. I said he was
a disgrace, and that he was unfair. Iacocca comes to Japan and says
Japanese are unfair. Very recently, he headed his sentence with, "Let
me make myself very clear," and then he went on to slander Japan. I
know he wrote that book which labeled Japan as "unfair" but I think it
is Iacocca who is unfair, and that is what I said.

When I was asked why he was unfair, I answered clearly, in front of
the camera.

The president of a Chrysler company came to Japan. I had met this
person before. I knew he was involved in selling Chrysler auto-
mobiles, so I asked him how sales were going. He turned to me and
said quite plainly that he had not come to Japan to sell cars, but he
had come to purchase Japanese parts and engines. He said he had come
to Japan to buy Japanese products so they could sell them in the U.S.
At the present time, the three big automobile manufacturers have
purchased 250,000 automobiles from Japan in 1987. How many have they
sold to Japan? Only 4,000. They make no effort at all to sell their
cars in Japan, and then call Japan unfair because Japan sells too much
in the U.S. and Japan will not buy their products.

One of the reasons why U.S.-Japan relations are in such a mess is that
Japan has not told the U.S. the things that need to be said.

10.2 Japan Has Not Forced Its Sales on the U.S.

When I go to foreign countries, I hear that Japanese work too much.
But why is working too hard so bad? Our society cannot continue to
eat unless we keep producing products. People have to have products
in order to live. They use golf clubs, and drive automobiles. If
they want these products and do not wish to import them, they must
manufacture them. I am a businessman. I am not forcing my customers
to buy things from me. We expend our energies on how to make our
products most attractive to the customer.

The Americans say that there is a U.S.-Japan trade imbalance, and it
is not because Japan is not buying U.S. products or because Japan is
forcibly selling the products. There are few things in the U.S. that
Japanese want to buy, but there are a lot of things in Japan that
Americans want to buy. This is at the root of the trade imbalance.

The problem arises in that American politicians fail to understand
this simple fact. It could never be the case that we are selling too
much; it is not because we are exporting; the imbalance arises as a
result of commercial transactions based on preferences.

Therefore, the only thing that Americans or Europeans can do to
correct this imbalance is reassess themselves and make an effort to
produce products which are attractive to Japanese consumers. It is in
this area where I would like to see Japanese politicians get courage
enough to expound abroad to our trading partners.

Recently, U.S. Secretary of Commerce Verity brought representatives of
25 companies to Japan who wanted to sell their company's products in
Japan. I was the person responsible for welcoming this group, and I
told them Japan would do its best to help out. I remarked, however,
that I had been doing my best to sell Japanese products in the United
States over the past 30 years. Yet, not once had the Minister of
International Trade and Industry accompanied me and helped out in my
efforts. I asked the Secretary of Commerce if it was his intention to
create an "America Incorporated." Secretary Verity smiled, but
everyone else laughed out loud.

The Government of Japan has, in both the good sense and the bad sense,
passed along various types of administrative guidance, which have been
criticized by foreign countries as being an alliance between
government and business -- even if the Minister of international Trade
and Industry does not go on trade missions.

One of the Americans in the group then asked me why the Japanese
government backed up Japanese industry. Let's think about it. Even
though the government does not own one share of my stock, I pay more
than half of my profits to the government in taxes. If my business
does not do well, the government does not receive more revenues.
Thus, the government, we feel, is a kind of partner. I asked them why
American industries, which are paying taxes to the government say,
"the government is trying to control industry; don't touch us." Your
viewing of the government as the enemy seems strange.

During this visit, Secretary Verity did voice his support for
cooperation between government and business to sell products, but it
is my feeling that the establishment of a framework for this type of
cooperation is still a long way off.

10.3 Let Us Think About the Role Japan Should Play in the World

On the other side of the question, however, there are certainly
aspects of Japan which are "unfair" when viewed from the U.S.
perspective. When you consider what Japan has done for the world in
the course of its becoming the second largest economy, I think this is
an area where Japan is in line for some critical reflection.

Recently, since the time of Prime Minister Takeshita, Japan has been
making enormous efforts to become the second most open country in the
world for trading. The long-boiling problems over beef and citrus
imports were gradually resolved through efforts directed at those
problems. However, from the perspective of Americans, Japan has still
not done what it should do. I am not saying we should put more money
in defense spending, but if we are not to exceed 1% of GNP on defense,
then the government should put more money into Official Development
Assistance (ODA) (foreign aid), which helps the other countries of the
world.

In addressing the ODA to GNP ratio, of the 18 countries in the world
who provide foreign aid, Japan is number 15. Also, if we look at the
amount of non-loan foreign aid for which there is no remuneration,
Japan is number eighteen of eighteen. I shrink when I am asked
whether that record is something Japan can be proud of.

Almost all U.S. corporations make donations of about 1 percent of
their pre-tax profits to the community -- using some of their money
for the community is a kind of custom with them. In Japan too, we
also make some contributions to return money to society, and at the
current time many Japanese companies are returning more than 1
percent.

But when Japan is looked at as a state, it is perceived as unfair by
the rest of the world because it is not returning some of the benefits
it reaps from the world back into the world society.

Therefore, when I speak before Japanese groups, I emphasize what is
meant when America says Japan is acting disgracefully. I tell them,
"Shouldn't we review what we are doing once again?" Japan should be
bold in telling the U.S. what it needs to be told, but at the same
time, Japan must establish a code of standards for the role it should
be playing in the world.

Japan should open its markets to the extent where there would be no
room for their complaints, and money that Japan has should be provided
to help developing countries where people are not being oppressed.
This would be a magnificaent behavior on Japan's part, and I think
that Japan needs to become aware of its responsibilities.

Certainly the full opening of our markets and advancing large sums of
money for developing countries is very painful. However, things will
not get better in the world until the pain is shared more equitably.
How much pain do you think was involved during the Meiji Restoration
where the privileged class of samurai gave up their power, cut their
special hair styles, and tossed out their swords? It allowed a
bloodless revolution to take place within Japan.

Mr. Ishihara has said there is a need for a reform of consciousness in
Japan. He is exactly on the mark. If we do not reorient our
consciousness from the perspective of being international people, then
I do not feel Japan will be able to continue to walk the globe as an
economic power.


11.0 JAPAN SHOULD LIVE IN HARMONY WITH ASIA (Ishihara)

11.1 Restrain America!

When the time comes when Japan does say "no" decisively on a
particular issue, there may be a dramatic reaction. It could come as
a shock to the Americans, and a number of different reactions would be
possible. Even now, some Americans suggest the possible physical
occupation of Japan in case Japan engages in semicondcutor trade with
the Soviet Union.

Yet when the time comes, we may well dare say "no." The relationship
between Japan and the U.S., as Mr. Morita describes it, is unbreakable.
However, the whole world does not exist for the sake of Japan and the
U.S. Japan's relationship with the rest of the world does not exist
only in relation to or through the U.S. Should America behave
unreasonably toward Japan, Japan must open channels to deal with the
rest of the world from a different standpoint than on the basis of the
U.S.-Japan relationship and it must show that it is doing this to the
Americans.

America itself has already exhibited certain indications that it is
shifting towards a closer relationship with the Soviet Union, as Alvin
Toffler stated, insinuating that Japan will be threatened once the
U.S. establishes a more collaborative realetionship with the Soviet
Union similar to the case of the U.S. movement toward China, which burst
forth in December 1978, there was also an astonishing high technolgy
demostration.

I for one had a chance to observe some of that demonstration. It
began with a set of satellte photos which Dr. Kissinger brought to
China. At that time Viet Nam was engaged in a military conflict with
China, subsequent to the fall of the Saigon government in April 1970
and the Cambodian war. The Sino-Vietnamese war was recklessly
provoked by Deng Shoa Ping, chief of staff in China. In the initial
encounters, China was severely defeated. The real power behind Viet
Nam was the Soviet Union. The Soviets provided Viet Nam with detailed
satellite photos illustrating the movements of the Chinese military,
the number of soldiers and divisions, the number of tanks unloaded at
Kuang Tong station and which direction all these troops took. Taking
adavantage of the superior information available to them, as provided
by the Soviet Union, Viet Nam was able to lure the Chinese troops deep
into the mountains, then desroy them with anti-tank missiles. This
miserable battle was all recorded by American satellites, which Dr.
Kissinger presented to the Chinese with the comment "what a silly war
you have conducted."

Needless to say, it was a shock to the Chinese leaders to see how step
by step their military was demolished.

I assume that the Americans showed another series of satellite
pictures showing the horrible massacre of Chinese soldiers at the
siege of Damansky Island (in Russian) or Chin Pao Island (in Chinese),
which is located in the middle of the Amur (phonetic rendering) River.
At first, only a small number of Russian soldiers occupied the island
and they were soon driven off by the Chinese, who had many more troops
than did the Russians. The Russians returned in greater numbers and
recaptured the island. Fianlly, the Chinese sent the equivalent of a
human wave of troops, almost flooding the island with soldiers. As
the Chinese shouted victory, the island was surrounded by a sudden
mist and eventually it was covered by a dense fog. The Russians
exploited this climactic assistance, surrounding the island with tanks
and opening a salvo. At dawn, there were a great many dead Chinese
troops. The Russians landed their tanks, rolling over the dead,
wounded, and living, reducing all to nothing.

The Americans showed clear pictures of the events, illustrating what
had taken place using satellite pictures, a great demonstration of the
combination of technology and intelligence gathering. China was
shocked and disturbed that it could not effectively counter a
situation like that as they simply did not have access to the
technology required. They listened to the Americans, and agreed to
the development of a bilateral relationship with the U.S. on American
terms. America had played its high tech card quite effectively.

The normalization of relations with China, by-passing Japan, set a
precedent and provided a basis for other such threats to Japan by the
U.S. America can bluff Japan by indicating that it can develop a
similar relationship with the Soviet Union, without consultation, so
that Japan would be less needed within the framework of U.S. global
strategy. But Japan has a similar card to play, counter to the
American bluff.

Some of Japan's business leaders have long had an interest in Siberian
development, which now appears to be a realistic possibility. Some of
them are of the opinion that Japan could go neutral, revoking the
U.S.-Japan Security Treaty, if the Soviets will return the northern
islands, granted that Japan would be given the right to develop
Siberian resources.

This may be a realistice choice from the Soviet point of view since
some critical technologies such as linear technology are available
from Japan. The U.S. simply does not have them. Japan had better
start sending some signals of its own to America. My American friends
comment that my behavior in the U.S. is too provocative; I feel that
more of us should speak out like this more often.

Japan could have the Soviets formally request Japan's linear
technolgy. The COCOM would claim that it is illegal for Japan to
provide this technology. Japan would then mount a public relations
campaign, appealing to the rest of the world that the use of its
linear technology is simply to enhance the efficiency of the Soviet
railroad system in Siberia so that travel time is shortened and the
whole thing will be rationalized as an attempt to restrain American
intervention. In fact, the U.K. and France are champions at this kind
of public relations game, in combination with diplomacy. We need more
skillful players in the game to counter the formidable American
challenges in the international arena.

11.2 Japan Is Not a Free Ride on the U.S.-Japan Security Pact

It goes witout saying that the U.S.-Japan relationship is a vital one.
The security treaty has certainly been helpful to Japan. America,
however, has chosen to become involved for American interests; it did
not want to see the restoration of Japanese military power. However,
the so-called American nuclear umbrella as a deterent power for Japan
is not as valuable as the Americans have said. I verified this myself
twenty years ago and put it into the official record. The American
nuclear umbrella is just an illusion as far as the Japanese people are
concerned. Also, the so-called "free ride" on the U.S.-Japan Security
treaty is no such thing and has no earthly basis. I have stated this
repeatedly. The Japanese people have been forced to thank the U.S.
for an illusion. Both the U.S. and the U.S.S.R. had to enter the INF
agreement due to the nature of a changing power shift in the world,
which on the bottom line, is inevitable in light of the high tech-
nology dominance by Japan. This has been clearly seen by individuals
such as Dr. Kissinger, who even foresaw the situation today long ago,
a position he has stated on a number of occasions. Poor Japanese
politicians have never studied these issues systematically and
therefore can never provide a rebuttal to American allegations.

Americans, for their part, seem to have emotional and intellectual
difficulties in admitting to changes and new developments.
A Pentagon task force sent a warning on electronics, with particular
emphasis on semiconductors, those who have nothing to worry about but
Japan [sic]. America is very seriously concerned about losing power
of any kind to Japan. Some Americans have been raising their voices
in advocation of an increased Japanese defense capacity. This may be
a worthwile suggestion. We should overhaul our current defense
system, although I am not advocating an abrupt cutting of ties with
the U.S. We have accepted this absurd defense formal [formula?]
consisting of three defense forces. This system must be completely
overhauled to suit present realities, including a much greater
deterrent capacity, exploiting our high technology to the maximum. We
should develop the most persuasive and demonstratable deterrent
formula which would, without any doubt, show our adversaries that any
attack on Japn will end with unbearable damage to the aggressor from
both a stategic and a tactical viewpoint.

Production and maintenance of escort ships which can only exhaust
their missiles and ammunition in a few minutes, and then sit and wait
for death is absurd. Participation in RIMPAC with such equipment
makes no sense. RIMPAC has nothing to do with the concept of active
defense.

In a lecture that the Defense College of Japan, the commander of the
U.S. 7th Fleet declared it 100% unlikely that Soviet forces could land
on Japanese territory. This is [an] honest -- but stupid -- comment.
Some time ago we invited a famous Israeli tank division commander
named Tam (phonetic rendering) to Japan. He kept annoying the Defense
Agency by asking why Japan was building tanks. He was considered to
be one of the top tank strategists in the world, and he told us that
even on Hokkaido there is no need [for] tanks for defense. He said
that Soviet attacks would have to be destroyed at sea. He also
expressed doubt in the value of escort ships.

His points are absolutely valid. Tanks and escort ships were built
and maintained at the direction of the Americans. America has imposed
its defense formula for Japan on Japan, reproducing its own defense
formula within Japan. Thus, Japan has ended up with the defense system
it has simply because of one-sided, pro-American diplomacy: one in
which Japan says only "yes."

I conducted my own cost analysis of Japanese defense systems and
discovered that the whole thing would be far less expensive if Japan
developed its own system in accordance with its own initiative and
planning, in comparison to the expenditures forced on us today by the
U.S. Despite the bowing under to American will by Japan, it is still
the target of American politicians such as McClosky who charge that
"Japan is protected by American bloodshed in the Persian Gulf."

The time has come for Japan to tell the U.S. that we do not need
American protection. Japan will protect itself with its own power and
wisdom. This will require a strong commitment and will on our part.
We can do it as long as there is a national consensus to do so. There
may be some political difficulties at this point in forming this
consensus. From both a financial and technological point of view,
there are no barriers to accomplishing this goal in the near future.
We can develop a more effective and efficient defense capability at
less than we are paying today.

In reality, the abrupt cancellation of the security treaty is not
feasible. But it is a diplomatic option and a powerful card.
Outright refusal to consider such an option means giving up a valuable
diplomatic card. The fact remains that we do not necessarily need the
security treaty and a security system which will meet Japanese [needs]
can be built by Japan alone.

Both the right and left on this issue tend to become fanatical on the
security treaty debate. It is most regrettable that we do not have a
cool and rational forum where the objective profit and loss aspects of
the issue can be analyzed. But the time will come when we will have
to face this issue and this time is in the near future.

The current state of the Liberal Democratic Party means that it cannot
afford a serious deliberation on this issue. Once the opposition
parties disassociate themselves from a one-sided pro Russian and
Chinese policy and demonstrate their capacity to be able to replace
the LDP as alternative political parties fully recognized by the
voters, we will be in the position to examine our options with greater
flexibility.

11.3 Japan Should Live in Harmony With Asia

Japanese popular songs are heard all over Asia these days; it reminds
me of the time when Japanese became so interested in American pop
music, which, at the time, conditioned our psycho-emotional base so
that post-war Japan evolved into a consumer-oriented society.
Structurally, there must be similar powers during such social
phenomena and I wonder what it is today.

As a matter of fact, it has always been some technological
breakthrough which has moved history into the next stage, during any
given era, even as far back as the stone age or the copper epoch.
Technology has always set the pace of civilization and cultures
flourish on this basis. When we start seeing only the pretty flowers
that are the result of this flourishing, and forget about the roots
that nourish the blossoms, we soon experience the decline of the
civilization, as has been the case of nations in the past. This is
the way I interpret history, in cool and orthodox terms.

With respect to the development of commercial uses of the
semiconductor, materialized by Japan in Asia, I must say that we can
easily understand the reason why this happened. When the French
minister of culture, Andre Malroux, came to Japan, he pointed out the
distinction between Western religious artifacts and those of Japan.
He told an audience that the Western expression of a crucified Christ
is bloody and even grotesque and might well discourage a religious
attachment to Christ. However, he said, the Miroku Buddha at the
Horiyuji Temple emits such a sublime beauty, beyond the barriers of
race and religion, that it is raised to the level of an eternal or
ultimate object to be revered.

What he meant was that the type of beauty and the impression given in
such an artifact as the Miroku Buddha or the Horiyuji Temple attract
interest and respect from all over the world, beyond national, racial,
and cultual boundaries. These are products of refinement from the
Japanese people. The original image of Buddha came from India, by way
of China and the Korean peninsula. The image of Buddha in Japan is
the product of refinement of Japanese art. The process has been
constantly refined and it becomes a product of Japanese intellectual
processes, as the Minister explained, it is clearly Japanese.

In my judgement, Japan has acquired this ability primarily because of
the particular geographical environment surrounding the Japanese
archipelago. In the long journey from West to East, Japan is located
at a dead end; there is nothing beyond except the Pacific Ocean.
Japan is in no position to pass on to other nations what it has
received; it must live with what it receives for the rest of history.
Everything stops at Japan; the Japanese people refine what has come
their way; Japan is the last stop in cultural transition.

Among Japanese statesmen, Mr. Minoru Genda is one I truly respect. He
once said that Western swords were basically instruments of killing,
although there are some variations, such as those used in the sport of
fencing. But these swords are just tools and we cannot be impressed
looking at Western swords. Japanese swords make viewers feel they are
looking at artifacts and that they are being invited in the world of
art and mystery. He went on to say that the Japanese people have
converted these awful tools, made originally to butcher other people,
into art objects.

Another time, Mr Genda told me: "Mr Ishihara -- after all, in the end,
Japan will be all right. It is able to defend itself." When I
replied, "how," he said that "Japan's technology can be the basis of
Japan's defense." What he pointed out was that Japanese technology,
which has been refined and polished to the ultimate extent, just like
the swords, would provide the basis for Japan's future existence.
Mr. Genda also affirmed the points I made, suggesting that in certain
crucial technological areas, Japan should move at least five years
ahead of other nations and if possible, further, to at least ten
years. As long as Japan maintains that ten year advance, it will be
in a safe position for the first twenty-five years of the 21st
century. And this can be accomplished if politicians use their ace
card wisely.

I had an argument with an American correspondent recently. I asked
him to look at those developing nations which were under American
auspices. The Philippines and those in Africa, Central and South
America are all in hopeless situations. Americans once called the
Philippines "a showcase for democracy." I said that Americans are
mistaken.

While the Philippines may have felt more comfortable under American
administration than under Spanish colonial rule, and while they still
listen to America, the U.S. never really imparted to them an under-
standing of genuine democracy. The chairman of the House Subcommittee
on Southeast Asia once suggested to me that the U.S. and Japan should
split the cost of financial aid to the Philippines. I responded
"You're kidding!" He said that money alone cannot improve the
situation in the Pilippines because of the internal situation. The
U.S. does not even know where its aid money actually ends up. And most
fundamentally, social conflict in a nation cannot be solved with an
outsider's cash.

The most crucial task in the Philippines if to face the cause of
social turmoil there. The cause is the role of the landowners;
Philippine landowners have accumulated incredible power and wealth,
siphoning everything from the ordinary people. These landowners will
get no sympathy from me. The Philippines must act to redistribute the
land and wealth in much the same manner as took place in Japan after
the war. Landowners cannot remain landowners unless the country is
stabilized. Should a military junta take power, and decide upon a
socialist economic policy, these landowners would be wiped out.
Usurpers must be removed, otherwise there is no way the seeds of
democracy can be planted. This so-called "showcase of democracy" is
empty. And pouring additonal aid money into the hands of the
landowners in the form of compensation for losing their land is not
only a utter waste of funds, but also ruins any basis for self-help
and self-motivation.

There is a chieftan in the Truk Islands, who speaks Japanese, and who
said that since the Japanese left, their children have only learned to
be lazy as the Americans give aid-money and things which spoil human
beings. If you give people lettuce seeds, they will learn to grow
lettuce, but if you give them money they will simply import lettuce
and learn nothing.

America is reluctant to recognize the importance and value of local
cultures. Christian missionaries do not permit the natives to chant
their charms and they prohibit the use of herbs as medicine -- herbs
that have traditionally been used in healing sicknesses, found in
certain localities and used according to local customs. Local
festivals are banned so that traditional songs and dances are
forgotten. Tradition is dismantled. Americans force other cultures to
give up their traditional value and impose American culture upon them.
And they do not even recognize that this is an atrocity -- a barbaric
act!

Natives who once had a traditional festival similar to Japan's
ceremony of tasting the fruits of the first harvest. (Our ancestors
may well have come from these southern islands, by the way). The
festival was held on the night of the full moon. Beating drums and
dancing, the people indulged in open sex as the festival had by its
nature this element of fertility. Christian priests prohibited these
festivals and instructed the natives to bring the fruits of the
harvest to the church altar. One hour after this was done, the
priests ate the gifts. The chieftan, still speaking Japanese,
complained "we did not grow this to feed priests." This kind of
misunderstanding goes on and on and Americans don't even realize it.

Those Asian nations where the economy has been a success story, such
as Korea, Taiwan, and Singapore, were all, at one time or another,
under Japanese administration. We are aware that some negative things
happened under the Japanese administration, but it cannot be denied
that many positive changes were left behind.

Among the resource-supplying nations, the only Southeast Asian nations
which have developed stable socio-economic systems are those where
Japan has cooperated as a fellow Asian country. I pointed this out to
that correspondent with whom I had the argument; in return he only
kept silent.

In any case, these NICS are turning into NIES who are catching up to
Japan, which make Japan nervous. However, this is fine with me.
Japan should work more positively, basing its approach on the premise
that we must live in harmony with other Asian nations, developing
constructive political strategies to assist these countries
economically and politically. Entering a new era -- the Pacific Age
-- Japan cannot remain prosperous without the rest of Asia. We need
Asia more than we need America.

11.4 Japan Can Be Admitted to the World Community by Saying "No"

Japan is not quite the tiny country most Japanese think it is. We
should not be presumptuous or arrogant, ending up hated by others, but
we should have pride and dignity as a respected memeber of the world
community.

Our world view appears to be very peculiar, conditioned in part by our
geography and our climate. In our mind, Japan and the rest of the
world do not exist in a concentric circle. The rest of the world has
its center and the center of Japan is somewhere outside this. I feel
it is time to overhaul this concept and enter into the concentric
world.

We want to enter that arena not through the kind is individual
performance as given by Mr. Nakasone [sic], but rather by saying "no"
decisively. The Japanese people will define their position in facing
the consequences and significance of their "no" and will be able to
join the world community in the concentric circle as a true "adult"
member. It is therefore imperative to normalize our relationship with
the U.S., so we can get on with becoming a true member of the world
community.

I often suggested a G2 conference with the U.S. This would help
establish Japan's status and America might welcome the suggestion.
When there are only two parties meeting, Japan will have no choice but
to say "yes" or "no" without resorting to gray areas. Japan must be
equipped with logic and reason whenever it says "no." Best of all, by
holding a G2, Japan will only have itself and the U.S. with which to
be concerned, making it easier to stick to the "no." No other nation
will pay attention to Japan if Japan cannot say "no" to the U.S. A
good example is China.

Japan is flattered by many nations these days for no reason than its
wealth. Money is important, but Japan has many more valuable assets,
such as tradition, culture, creativity, as well as powerful high
technology; this last item is one that even the U.S. and U.S.S.R.
cannot afford to ignore. In order to make the rest of the world
realize that Japan has much more to offer than wealth, we must develop
the logic and reasoning to be able to say "no", explain why, and stick
to it at certain crucial moments.


 December 31, 2017  Add comments

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