陳永峰：Only time will tell for Japan and Taiwan

陳永峰說日本@Taipei Times (2017-02-02)

Media outlets no longer restrict themselves to discussing Japan’s political and economic situation, but are filling more space discussing Japanese social issues.

Reports have ranged from those on Japan’s underworld a dozen years ago and its disconnected society five or six years ago to more recent one on old age poverty and “low-class old people.” These reports have often given a “cruel picture” of Japanese society following its democratization and period of high economic growth.

Taiwan today is very similar to Japan 10 years ago: political disorder, economic stagnation and social issues.

Eight years ago, Japanese voters kicked out the Liberal Democratic Party, which had long promoted neoclassical structural reform and instead let the Democratic Party, which focuses on social issues, take over. In 2010, Naoto Kan, the first Japanese prime minister with a background in social movements, took office vowing to create “a society with a minimum of unhappiness.”

However, it was quickly evident that social issues could not be solved using political or economic means. In 2012, then-Japanese prime minister Yoshihiko Noda Cabinet’s two-stage increase of the consumption tax was a heavy blow to Japanese society. However, the social character of the Democratic Party government has had a monumental significance in Japan’s post-war political history.

Today, the party has been dissolved, but Japan’s social problems remain.

“A society with a minimum of unhappiness” has failed to materialize, and a society with the greatest possible happiness is even further away.

Following the 2011 Fukushima Dai-ichi nuclear power plant disaster, the Democratic Party government was supposed to lead Japan from working to improve the economy to working on social issues. However, since 2013 the country has returned to a semblance of focusing on economic and political issues.

The failure of the Democratic Party government was a political tragedy for Japan that slowed the country’s social transition.

Japan is a mature society that has passed the zenith of economic development. It is also the world’s most notable example of an aged society, as one-quarter of its population is older than 65.

In aged societies, the social structure is a great challenge to economic growth, but aged societies are also attractive. However, after four years of experimentation, the ideological resistance to Japanese Prime Minister Shinzo Abe’s Keynesian — the first and second arrow of his economic policy, fiscal stimulus and monetary easing — and Hayekian — the third arrow, structural reform — economics makes the retreat of Abenomics seem inevitable.

With the retreat of Abenomics, the Abe Cabinet should of course have brought forward an Abe-style sociology, but instead he is offering an Abe-style politics to the dismay of those with relevant insight.

In 1989, Japan’s economy was at its height and the Nikkei stock index had reached a historic high of 38,915 points. At that time, 11.6 percent of the country’s population was aged 65 or older.

Today, the proportion of Taiwan’s population older than 65 has reached 12 percent. No one knows if Taiwan will face the same problems as today’s Japan 10 or 20 years from now.

However, the Democratic Progressive Party government, which represents progress and reform, stands at a historic juncture, and it has a historic opportunity.