Remember MiniDisc? The little square-shaped, muddy-sounding, smooth-playing media that made your standard Target-bought Discman feel as if you were walking around town with an ancient turntable. The MiniDisc never caught on in the U.S., but the Japanese still won: companies from that one island in the East controlled the entire portable market. If you wanted to see the edge of available technology in 2000, Biccamera in Shibuya was Consumer Mecca.

Then came the iPod. And within five years, “portable audio” became something that Japanese companies were really bad at.

But even after the iPod debacle, the Japanese and Koreans had one field in which they were absolute masters: the cell phone. Americans were literally forced by Sprint to use three-year old LG models. Guys in New Jersey pulled up friends’ numbers on tiny black-and-white screens while guys at the New Otani browsed a mini-version of the web in full color. Maybe the Motorola RAZR sold some phones in Japan, but c’mon: Media Skin, Marc Newson’s Talby? Compared to Japan, America looked like a third-world nation in terms of cell-phone standards.

Then came the iPhone.

Now you could argue that the full menagerie of Japanese phones still destroys the American selection or that Japanese phones can do neat things like receive broadcast television signals that the iPhone can’t. (Because I know you would never want to miss an episode of Waratte Ii Tomo.) Nevertheless, the iPhone — a single package — leapfrogs everything the Japanese market has to offer, especially considering the excellence of the user interface.

If we were smart, we would see this as the battle between multinational conglomerates instead of nations, but we won’t: the iPhone takes a serious bite out of the Japanese gross national cred on advanced cell phones. One product changed everything.

There is a recent Docomo commercial featuring hot actor Eita and some other guy showing off the latest and greatest function on a Docomo phone — get this, better yet, sit down — a motion-detecting boxing video game. Forget watching video libraries of films and TV shows on a wide screen, a wifi-ready internet device, and a revolutionary way to browse media archives, you can play a motion-detecting boxing game on a brand new Docomo phone if you set up your phone in a quiet room and punch near the screen. To be honest, that would have looked pretty cool if the other side of the world had not suddenly erupted with semi-religious technological progress.

(Wait, Marxy, are you considering the fact that Docomo has way more celebrity spokesmen than the iPhone? Fine, I admit it: Dentsu is way better at bringing together large teams of actors and actresses than the TWBA people.)

We can argue over small questions of functionality and design, but the Hype Machine in this Battle for Global Cool isn’t concerned with details. If someone asks, what’s the single coolest phone in the world today, would someone point to Japan or Korea? What would it take for Japanese phones to retake the title? Motion-detection curling?

World, you ready to envy? Your social superior Tyler Brule (add circumflex and accent aigu to the last word with your imagination) loves the new Roppongi super development project Tokyo Midtown. If you are thinking that Roppongi Hills was enough for this city — with its Starbucks, luxury hotel, Tokyo City View, J-wave radio station, and art museum — you are dead wrong. Tokyo Midtown offers visitors a completely different world: a five-star luxury hotel, a dramatic view of the city, an art museum, and a Starbucks complete with — get this — a radio station.

Those with a keen eye should have known that Tokyo Midtown was coming to Tokyo’s midtown. The Dentsu predictions for 2007 took the gamble to bet that Tokyo Midtown would be a huge media phenomenon — no doubt a self-fulfilling prophecy. Brutus has been doing a multi-part paid-for advertorial feature on the complex for months now. If you thought Tokyo was a great city before Mitsui Fudosan decided to show their rivals in aristocratic brinkmanship that they could do luxury Roppongi way better, go ahead and kill yourself. When you get to Heaven, surely it will be look exactly like Tokyo Midtown.

Now Mr. Circumflex Aigu could be right — Tokyo Midtown could be incredible — but whether the features are spectacular or not, at what point do we citizens of Tokyo cease to be impressed with the constant escalation of massive developments? At some point, the Japanese media was abuzz with breathless anticipation about Sunshine 60 — a now-yellowing complex built in East Ikebukuro by the Seibu brothers on the haunted land of Sugamo Prison. Mori’s Ark Hills was a huge deal when it opened, but now it’s just a pedestrian place where I get my library books and eat bland Subway subs with Rory P. Wavecrest once-in-a-while. Remember Roppongi Hills? That glorious glass-and-concrete tribute to capital accumulation did not just fade into semi-obscurity, but celebrated an acute comeuppance when the princes of the castle (Sir Horie and Sir Murakami) got busted for financial misdealings. At least its perimeter was host to social conflict.

Reading the supplied descriptions of these developments reminds me of the original plans for EPCOT — utopian “cities within cities” to house, feed, employ, and entertain select communities. With Roppongi Hills, however, Mori only let Japan’s recently-emboldened upper classes into the gates. The investment bankers and New Economy brats in the Hills office space can enjoy the highest-priced apartments, the most prestigious hotel, a host of exclusive restaurants, or just go to the Heartland bar and pretend they are not in Japan. We untidy masses are given the chance to save up our measly earnings so we may visit, grab a tall latte, enjoy the art museum, watch a movie, and buy some things at inflated prices as long as we go home quickly and do not bother the VIPs who live there.

Not to be outdone, Mitsui Fudosan have now spent their billions to recreate the exact same experience a couple of blocks away, and as good consumers, we will throw away our Roppongi Hills lust and direct our eyes on even more concrete arranged in an even more-exclusive and awe-inspiring way. “Midtown-zoku”: A buzzword coming to a media outlet near you soon.

In an economy very literally centered around constant expansion through construction and real-estate development, we would be silly not to expect a Tokyo Midtown and even sillier not to expect Mori and his millions to take revenge at a new location in a few years’ time. This game between ancient royal families is a constant cycle and the central driver of Tokyo urban planning. Might makes right. Value is determined by simple addition. Bigger is better. No time for renovation or conservation. Destroy the community of Shimokitazawa to build an amazing new highway. Flatten the old yakuza drinking holes of Roppongi so that yakuza-backed construction agencies can get some new employment.

Build, use, discard, Tokyo.

The Japanese government is setting up another task force to tackle the difficult issue of work-life balance. Experts will come together to figure out how working hours can be effectively curbed.

Any Western spectator of Japanese business life will immediately bemoan the absurdly long hours expected of company employees. Work may end at 6:30 at many Japanese firms, but punching the clock at 6:31 is like sticking your chopsticks straight up in a bowl of rice. In the past, there may have been a hierarchical duty to stay longer than your own boss or go out drinking with management, but even as that corporate culture fades into the past, you do not see new employees out the door at a decent hour.

Long hours, however, do not mean high worker productivity. In the past, Japan has fared worse than Italy on this measure, and we can unscientifically assume that the Italians are getting a leisurely riposo in there while the Japanese drones buy a convenience store bento and eat at their desks for 15 minutes.

So cutting working hours in Japan is ironically an attempt to increase productivity: the article states “companies could boost the productivity of their employees because they will try to finish work in a limited time and will work efficiently.” Getting everyone home early could also lead to many positive social externalities, including more parental involvement in child-raising and less sleep deprivation in the general population. Objectively speaking, there are few downsides to limiting work hours. Perhaps the firms themselves lose huge amounts of free overtime hours, but this new plan promises to give them higher productivity in return.

Westerners immediately decry the madness if not the moral offense of workers slaving away at their companies until the wee hours of the nights. Liberal enlightenment ideas of the individual having free reign over his own self-definition tend to resent the concept of the “company man” — where individuals are reduced to inputs. Marxists believe that the worker must pursue self-actualization that puts the fruits of his labor within his own hands and not the capitalist’s.

Work-life balance, however, is a completely loaded Western liberal concept because it creates a dichotomy between work and life — as if they are antagonizing forces. The Confucian-Statist philosophical underpinning of modern Japanese society assigns each individual a specific, unmalleable role and posits self-actualization as the loyal and perfect performance of that role. Conditioning of these beliefs starts early: young athletes choose to play one sport for their academic careers and do not change sports with the seasons like you see in other nations. Baseball players are baseball players. In general, Japanese people have one hobby, which leads to the famously maniacal dedication to certain “ridiculous” pursuits like competitive eating or obsession with a single fashion brand.

Since the Meiji Restoration, citizens of Japan have been able to choose their destiny and occupation without adhering to the strict Neo-Confucian caste system of warriors, farmers, artisans, and merchants (士農工商) seen in the Tokugawa era. However, once the die is cast at 22 and the individual enters the company, corporate duty becomes “life.” There may be other familial duties, but the general culture clearly places these as secondary — especially in a gender-divided society where women alone are expected to embody “family” and all its subsequent duties. The “firm as family” ideology may have been invented in the early 20th century as a convenient form of labor control (that echoes the “nation as family” rhetoric of the kokutai [國體]), but even without the idea of “family ties” creating corporate loyalty, there remains a fundamental Confucian understanding of one’s place in the world being a fixed locus within Heaven’s order and not a progressive position of man’s choosing. These days the “family firm” belief is drying out with the rise of tenshoku (転職) mid-career company change. Workers may choose new masters once and a while, but once the movement is made, long hours remain a key part of the corporate life. Because again, corporate life is life.

Eradicating this belief will be extremely difficult — barring some kind of Romantic revolution. The number of freeters is apparently dropping, echoing the original analysis that these young people could not find full-time employment and were not willfully eschewing it. The low birth-rate and unwillingness to open up immigration do not help the drive for lower hours: the OECD estimates that productivity will have to increase and hours stay at current levels in order to make up for the smaller future workforce. Retirement will also have to be pushed back. State economic goals have almost always trumped individual rights in Japan, so I do not think the government will actually pursue a true course of “free time” that could cut into GDP growth. But more importantly, a large percentage of the population possesses a core belief that identity can only be attained through organizational dedication and that long-hours are a key part of that role performance. The government can mandate holidays, but they will have a real challenge to erase the base social ideology of (at least) the last two centuries. One can make the claim that these popular beliefs have their roots in elite social control, but even in that case, the elite will have to erase the effects of their massive success in completely legitimizing demands for worker duty.

If you think lower work hours will be a part of Japanese culture soon, you must be dreaming. And if you are dreaming, you are sleeping well. And if you are sleeping well, you are clearly not working enough!

In just 160 pages of their new book The Fables of the Keiretsu, Tokyo University economics professor Yoshiro Miwa and Harvard Law School professor J. Mark Ramseyer manage to raise doubts about almost all conventional wisdom regarding the structure of the Japanese economy.

A summary of their arguments in Q&A form:

Are Japanese firms organized into informal industrial groups called keiretsu?

Keirestu have never existed, and the concept was invented by Marxists at the Economic Research Institute who wanted to identify a source of “monopoly capital” for the Japanese market.

Do firms in keiretsu arrangements cross-hold other firms stocks, therefore allowing them to pressure each other towards beneficial relationships?

Not really.

Was the pre-war economy controlled by zaibatsu financial cliques?

These firms were only deemed “zaibatsu” because they were successful in the market when other companies were struggling through the Depression.

Do Japanese firms have a “main bank” which will rescue struggling companies even without the explicit contracts to do so?

There is no such thing as a “main bank,” and banks do not automatically bail out their clients.

Is the Japanese economy directed by the soft authoritarian guidance of the central bureaucracy (especially MITI)?

Japanese firms ignore MITI’s direction, and the courts back these firms up when the bureaucracy gets decides to press them.

For the most part, Miwa and Ramseyer supply an abundance of data and objective measures to show that the Japanese economy has never really operated in the “unique” way depicted by fifty years of mainstream scholarship in both Japan and abroad. In the case of keiretsu, they make a very strong case that the characteristic cross-shareholding is actually very rare, the so-called “lunch clubs” are rarely used for group decision-making, and most parts suppliers working under automobile companies make products for a large number of different rivals — not just their supposed keiretsu “parent.” The authors re-analyze the Sumitomo Metals case study, which is supposed to show that MITI punished Sumitomo for refusing to enter into a production cartel. Instead they find that not only did Sumitomo freely challenge MITI’s guidance but got away with it scotch-free.

I find Miwa and Ramseyer’s arguments convincing for the most part, but as someone previously partial to the idea of the Japanese economy being a “developmental state” model rather than a complete “free market,” I would like to see a heavyweight on the other side of the fence argue the opposing view. They are most certainly right about the narrow topics they picked up, but perhaps end up overselling their bigger conclusions. Instead of just correcting the record, they are obsessed with aggressively belittling a certain kind of cultural relativistic economic view where Japanese firms “sacrifice profits for the sake of cultural norms” etc. Chalmers Johnson’s theories on MITI guiding the Japanese economy could maybe benefit from more attention to hard data, but Miwa and Ramseyer seem less interested in dealing with scholars like Johnson and instead channel their wrath towards a more extreme and less existent animal:

“East is east, and west is west, and never the twain shall meet, till earth and sky stand presently at God’s great judgement seat.” As politically incorrect as Sylvester “Rambo” Stallone and Mae “Peal-Me-a-Grape” West, Kipling nonetheless remained a cultural relativist to the end. Dumb down his verse six levels and it captures most of what passes for “theory” among modern cultural relativists and much of what passes for analaysis about Japan. And stripped of their political baggage, the modern cultural relativist and the old-school colonialists like Kipling fascinate for the same reason: they indulge our lust for the exotic and free us from the rules of social science (156).

The authors’ main methodological advice is praiseworthy: Economic theories about certain institutional systems need to incorporate inductive data and match behavior to pre-existing universal understanding before assigning behavioral choices to the black box of “culture.”

That being said, Miwa and Ramseyer show little interest in acknowledging the much bigger question that emerges in light of their refreshed view: Aren’t there many places in the Japanese economic and consumer structures that are drastically different than what is seen in the other mature capitalist economies? Maybe MITI does not completely control industrial policy in Japan, but did the American government ever proclaim that there should be only two car companies and that they would not assist new entrants? Honda, of course, ended up ignoring MITI’s warnings about manufacturing cars and still went on to unbridled success. But I think it still says something about the nature of the Japanese government that it believes it has the power to shape the industrial marketplace, to allow cartels, to essentially not ever prosecute monopolies and oligopolies. This could be a product of historical circumstances (rebuilding after a war, late development, etc.), idiosyncratic decision-making, or ingrained cultural traditions, but Miwa and Ramseyer leave themselves open for attack by failing to mention that there are, at the end of the day, still differences and points of divergence.

The authors maintain that economic actors tend to follow the same logic all over the world, but if we accept this on general terms, it means that differences in output must thus depend on particular market arrangements. On this blog, I have made claims in this vein. For example, Japanese pop music sounds like it does because of the dominance of oligopolistic artist management companies like Johnny’s Jimusho that continually use their market power to crush rivals and keep tastes stable. Johnny’s behavior is no different than what can be expected among firms in the West, but American music companies, for example, never are able to achieve the same kind of economic power over the media to be able to sustain such actions.

What I want to know after reading The Fable of the Keiretsu is, what are the structures of the economy, the government decisions, the particular historical circumstances that are different than what are seen all over the world? Even if keiretsu do not exist, why do you see so much tolerance and/or esteem for monopoly and centralization? This may not be “Confucian” per se, but the sources of these kinds of macro behavior still need to be clarified.

So yes, let us clear the dead weight of myth and the laziness of evoking deep-seeded cultural voodoo. But once we have gone back to the data and put our knees on the ground, we then still have to ask, why and how is a set of universal reactions being shaped and altered to produce a particular result?

Tokyo has a reputation for being the world’s most irrationally expensive city, but once you actually live here, you realize that prices do not live up to the hype. Few individuals in New York City can expect to rent their own apartment for $600 a month — something that is relatively simple in Tokyo as long as you don’t care about square-footage. Cooking at home or a constant diet of Yoshinoya provide ample calories on small budgets. Well-planned transportation schedules can be economical, especially for students buying tsuugaku subway passes.

But if you really want to save money in Japan, the most important thing to do is not have any friends. The Friend Tax (友人税）is where the Japanese economy empties your pockets every month.

Last night was a typical night in the city, where I and the girlfriend went to a goodbye party for a young visiting European scholar. Late leaving my house, we arrived thirty minutes before the nomihoudai (all-you-can-drink) period ended and were greeted by a large group of red-faced revelers and uneaten plates of whale bacon. Drinking warm Asahi Dry in tiny cups, we made merry and met new friends, only to be greeted with what is always the ugly reality to our hedonistic escapism: “The bill will be ¥4200 a person.” Now, this is quite a lot for thirty minutes of minor imbibing, and since I had to pay for my date as well, a lofty sum for my meager government-subsidized living. But despite the gracious apologies from the host, I did not flinch: For I know the reality of the Friend Tax.

Whether it be birthday parties, gigs of friends’ bands, seasonal events, or school-related functions, you will never walk away paying what you would just pay by yourself — even if you had gorged and binged at maximum speed and force. That margin between your expected payment and the actual inflated bill is the dreaded Friend Tax. And the greatest irony is that you will no doubt be drunk, but the more money you drop, the more likely you will still be hungry at the end of the evening.

But it’s not just groups buying into badly-valued meal plans and drink sets. If you go a la carte, you do equal damage to your financial standing. Buying a pitcher and playing darts may be fine, but this is a country of unending formal engagements to mark various occasions. If you are part of an organization, there is only the rare chance to have fun that is not “mandatory.” The only way to avoid the Friend Tax is to have no friends or keep all fraternizing inside your peers’ tiny apartments across the city suburbs.

For those planning on moving to Tokyo, make sure you budget yourself at least ¥10,000 to ¥20,000 per month to deal with the Friend Tax (particularly if you are a student). The National Tax Agency keeps the existence of this tax secret. Perhaps the hikikomori do want to go outside and galavant, but they just can’t afford it.