I have just
learned of the death yesterday of my mentor and friend Chalmers
Johnson at his home in Cardiff-by-the-Sea near San Diego. Chal, as he was
known to his friends, was a man of many parts -- scholar, teacher, literary
critic, activist, conversationalist, music lover, prophet and more.
I first got
to know him in the early 1980s when, as counselor to the secretary of Commerce,
I was a lead negotiator with Japan on a series of difficult economic issues and
Chal's then latest book, MITI and the
Japanese Miracle, was being devoured by U.S. trade and diplomatic officials
desperately seeking to gain some understanding of what made the Japanese
forget my first meeting with Chal and his wife and muse Sheila over dinner at
their home in the hills above the University of California at Berkeley where he
was then teaching. The conversation moved like quick silver, flowing from one
subject to another and back in an instant. By the time the dessert arrived I
was physically and mentally exhausted. Over the years, I learned to be well
prepared for dinner talk at the Johnson household.
It was Chal
and Sheila who encouraged me in 1986 to write my first book, a look at U.S.-Japan
negotiations in the 1980s, and it was to Chal and Sheila that in 2009 I sent
the manuscript of my most recent book for their critical comment. I held my
breath awaiting their response, and their okay meant more than all the
subsequent reviews and commentary. I knew that if Chal and Sheila had given it
their seal of approval, it was okay.
scholar before becoming a Japan watcher in the 1970s, Chal had three
fundamental insights that are as significant today (perhaps more so) as they
were in the 1980s. The first was that Japan and the United States were playing
very different economic games. He very early understood that Japan's industrial
policies that focused great effort on development of what were deemed to be
strategic industries and of and that emphasized export led growth while
suppressing domestic consumption in favor of fostering high rates of saving and
investment constituted a new economic paradigm.
Although both the United States
and Japan were understood to have democratic, capitalist, market oriented
systems, Chal perceived that they were in fact two different variations of
capitalism. Whereas the Americans thought the market was an end in itself and
embraced competition policy and laissez faire free trade, the Japanese saw the
market as a tool to be used in conjunction with interventionist policies to
achieve the end of industrial and technological leadership. None other than
Singapore's long time Prime Minister Lee Kuan Yew ratified Chal's insight with
his famous injunction to his Singaporean citizens to "look east" for their
second key insight was that this asymmetrical relationship between the U.S. and
Japanese economies was disadvantageous to America while causing endless trade
frictions between the two countries. The problem was that the U.S. economy was
relatively open to imports and foreign investment while that of Japan was
relatively closed. This resulted in rapid penetration of U.S. markets by
Japanese exporters who then gained economies of scale that allowed them to
reduce costs faster than their American competitors who were virtually locked
out of the Japanese market. The U.S. response was to accuse Japan of cheating
and to engage in endless negotiations to "open" the Japanese market. But, of course, this never worked because
having a relatively closed market was part of the fundamental Japanese strategy
which did not recognize that the market was an end in itself.
Chal's third insight was that the American empire with its 770 plus military bases
around the world, its defense spending equivalent to that of the rest of the
world combined, its priority over economic and social considerations, its
frequent alliance with undemocratic and
even corrupt foreign countries and leaders, and its continuous discovery of new
enemies is strangling both the American economy and American democracy.
thing that always impressed me about Chal was how hard he worked and how much
he produced. He will be greatly missed not only by Sheila and his friends but
by our country.
Clyde Prestowitz is president of the Economic Strategy Institute and author of The Betrayal of American Prosperity.