 Ychydig oes, ydych chi. Ychydig oes, yn y fawr iawn ymweld yn gweithio y llyfr Nwyl Wg Beasley yng Nghymru. Felly, mae'r ddweud ychydig yn ymweld. Mae'r ddweud yn Halen Macnawton. Ym ysgolwyd mewn ddechrau ac ysgolwyd Ysgolwyd Ysgolwyd. Mae'n gweithio'r ysgolwyd ymweld yn y JRC, Gwneud Gydechu Ysgolwyd Llywodraeth Ymweld, ac ysgolwyd Ysgolwyd Ysgolwyd Ysgolwyd Ymweld. Ysgolwyd Ysgolwyd Ysgolwyd Ysgolwyd Ysgolwyd Ymweld yn 1978, a wna'r dros writher yn dasod 50 cadwmu ac y sgolwyd ymweld gyda i ddefnyddio'r llyfr Nwyl Wg Beasley ac ysgolwyd Ysgolwyd Ysgolwyd Ysgolwyd Ysgolwyd. Ysgolwyd Ysgolwyd Ysgolwyd ymweld yn y Llywodraeth Award for Education at the University of South Wales of The Forest and To The Cloud. This is a group of students that have passed away. Leannu, Merwsun, Klingwstucs, Literature, Film & Media, History, Anthropology, Economics, Management Studies, Politics, Art History, Religious Studies and Music. There is no field that we don't touch here at SOS. of Japanese Studies this year. I welcome many of you who are familiar faces who are regular attendees of our Japan-related events, and I extend a warm welcome to those of you who are attending for the first time. I hope you enjoy the evening and I hope that you visit us again. I also extend a special welcome and thanks to various supporters and partners of the JRC in the audience whose donations help fund vital research and learning activities. On that note, I'd particularly like to thank the Toshiba International Foundation, who have very generously supported this Beasley lecture series and related activities over the past four years. This series was established in honour of Professor William Gerald Beasley, a leading figure in the development of Japanese Studies in the UK. Indeed, his personal connection with SOAS must be celebrated. He began teaching here in 1947, and he was also the founding chair of the Japan Research Centre. By the time of his retirement from SOAS in 1983, he was, as you know, an extremely influential figure in the field of Japanese history. But scholars of his calibre never retire, and he went on to complete several more outstanding works on Japanese history that even today remain the benchmark in the field. So we're honoured at SOAS to run this lecture series in his name. The study of Japan remains a central core in the range of fields and regions covered at SOAS, and we in the Japan Research Centre are deeply committed to ensuring that this remains so as we enter our next centenary. We will continue to strengthen our teaching and research expertise in Japanese Studies, as well as reach out through public events like tonight to the business and wider broader London community. We're all here tonight, I think, most of us because we have individual histories, personal stories that have somehow led us to an interest in Japan. And through events like this evening, we can continue to make our collective study of Japan an enjoyable and rich and multi-layered experience. Professor Beasley passed away in 2006, and his wife Hazel, who was in attendance at our first memorial lecture, has now also sadly passed away. But I'm very happy to say that John Beasley, their son, has shown his very strong support of this lecture series from the word go, and it gives me great pleasure to welcome him to now say a few words. Have a joyful evening. Well, thank you Helen, and it's lovely to have an opportunity on this occasion just to say a few words about my father, very few of you in this room I suspect. Certainly fewer and fewer will have known him, worked with him. He was Professor William Beasley. I never heard anybody call him anything other than Bill, and I will probably refer to him as Bill throughout my comments here. I think one of the great things about his story, and one of the things that makes this lecture so important to me and was so important to my mother, was that he loved the idea that scholars would share. He was a man who came into an academic career from a background which began with very few advantages. He was the son of an actor, an impercunious actor. His mother had worked as a lady's maid before they were married, and following his father around with his repertory company, he had a very fractured education, certainly up to the age of eight, when he and his mother settled in the town of Brackley in Northamptonshire, which was when he first really went to the same school for more than a few months at a time. That fractured education meant that when it came to the 11-plus exam, he failed to gain entry into the local grammar school, and it was only because of the generosity of the trustees of a local educational charity that somebody stumped up the money for him to go to Mordland College School in Brackley, which is the smaller and less glamorous sister foundation of the Oxford version of MCS. It was there that he really came across his first true scholar. It was the history teacher at Mordland College School, a man called Eric Forrester. Almost to the day that he died, Bill could still remember Eric Forrester and would talk about the things that he learned from him. In particular, the first thing that he got from him was that once he was in the sixth form, Forrester in the holidays used to enjoy going to rummage about in the archives of local family houses, and once Beasley was a sixth former, he would take Bill with him as his scribe and fellow researcher. That was Bill's first introduction, if you like, to academic work. He was also Forrester who arranged for an interview on the platform of Northampton Railway Station with the principle of Westminster College, which allowed Bill to come to university here in London. Not something I think that he had thought ever likely to happen. He was here at Westminster College, which prepared him for a teaching career, but his first three years he was seconded off to the history department at University College. Again, almost to the day that he died, he could reel off the names of the men who taught him there, Neil Cobbyn, Thompson, LaPattarell, Bindoff, and his own supervisor, the Dutchman Gustaf Reneir, who wrote with his dry witter book called The English Are They Human? Then, of course, the war came. He graduated in 1940 and immediately joined the Navy. Of course, it was during his war service that he went to the United States Naval Language School in Colorado, learned Japanese, and ended up serving in the Pacific Theatre as the interpreter for Admiral Rawlinson, who was the British Commander-in-Chief in the Pacific Theatre. That was his intro, if you like, into Eastern matters. He came back here to finish his teacher training. Reneir suggested that he use his Japanese then to go into doing a doctorate, which is exactly what he did on Great Britain and the opening of Japan in the 1850s. In many, many, many ways, it was the generosity and the scholarly example that those men gave him, which meant that throughout his life he loved the company of scholarly men and women, which gave him a career and also the friendship of many, many people, which both he and my mother Hazel enjoyed on many continents. So, it was absolutely central to his whole being that one should share what you knew, what you were researching, what you were discovering. And I think that's why it is so lovely for me that a new generation of scholars are now giving lectures remembering Bill's name and sharing the work that they are doing. I know, of course, that putting something like this together is an extraordinary puzzle, like one of those 500-piece jigsaws. Some of the pieces obviously fit together, but there's an awful lot of sky. So, for everybody who has moved or shaken those pieces to make both this evening's lecture but also the three previous evenings happen, you have my deepest thanks. And certainly, if my father and my mother were here, they also would be thanking you profoundly. Thank you very much. Any minute now you get the real speaker, but just two minutes from me, Graham Fry, former trustee of SOAS and former ambassador to Japan. My job is to introduce Professor Bruce Aronson, who's going to speak to us this evening. And so, let me give you a very quick bio. He was a corporate partner at the law firm of Hughes Hubbard and Reed in New York. And he's been professor of business law at Stolzabashi University since 2013. He's also engaged in research and teaching at a number of US law schools. And there's a great long list here, which I don't think I'm going to read out, but they're all top places. Same thing in Japan, great long list here, including University of Tokyo and even the Bank of Japan. And he also acts as an advisor to the law firm of Nagashima Ono and Tsunematsu. And he's admitted to practice in New York. His main area of research is comparative corporate governance with a focus on Japan. And it says here that today, in this lecture, he will propose that we treat Japan as a normal country, which is very worrying for those of us who made an entire career out of the notion that Japan was a special country needing experts to interpret it. But nevertheless, over to you, Bruce. Well, thank you for the kind introduction. As noted, I'm Bruce Aronson. A little bit of an unusual background that I've spent about half my career as a practicing lawyer and half as a researcher and academic. I hope no one will hold that against me. I'd like to thank the Toshiba International Foundation for sponsoring this event. I'm very delighted to be here, and of course every speaker says he's delighted to be here, but I actually mean it. In fact, I have four different reasons, which I'd like to briefly share with you. First of all, I've been working and studying and dealing with Japan for somewhat over four decades. And the initial introduction that I had was as a second year undergraduate at Boston University. I was very interested in Japan, took a course on Japanese history, and to the best of my recollection, the first book that I ever read about Japan was Professor Beasley's original edition of his history of minor Japan. So that's one of the reasons that I'm excited to be here. Second of all, although I'm in law, I've always had kind of a secret desire to be a historian. And I recall very specifically when I was in the fifth grade, and the teacher went around the room and asked all the children what they wanted to be when they grew up. After the policeman and the astronaut, I was going to be this historian. And so I always enjoy opportunities to pretend that I'm a historian, even though it's not true. And so I asked as one of the places where I've been able to do that. A few years ago, one of my SOESC colleagues, Chris Gertais, who's in Tokyo at the moment, put together this very good book, and I was invited to participate in that project and contributed a chapter to that, and came to an author's conference at SOESC. And so not only Professor Beasley got me started, but I think of SOESC as the place where they actually let me come and pretend to be a historian, which is a lot of fun for me. And so back to Professor Beasley for a moment. As already described, I think this is a wonderful event because he emphasized so much the importance. And I suppose in a sense obligation of communicating and sharing and teaching and learning together, which obviously is important and we don't always have enough opportunity to do that. So I think this is a wonderful occasion, given my own background, both in kind of practical law and scholarship, to keep in mind that we're always interested in trying to bridge divides both between theory and practice, between specialists and generalists and the general public. And I can't think of a better occasion to move that goal forward than the Beasley Memorial Lecture. So those are all the good reasons that I'm delighted to be here and I'm supposed to go for about 50 minutes and I'll try not to go too far over, because part of the sharing, of course, is to hear what all of you are thinking and I look forward to that opportunity as well. I'm sure I'm not the only one in this room who has a long history with Japan. People do ask me from time to time how did you get started and I think it's worth mentioning just for a minute or so. If you think back to the 1980s or so or 1970s in my case, around that time you could have pretty much accurately said that Japan was the only non-Western country in the world that had successfully developed economically and modernized. So that was, of course, very interesting in light of the fact that Japan seemed so different in other respects in terms of history, culture, how society was organized compared to Western countries. I found it fascinating then and I probably still do today. Of course, so how did this happen? How did Japan develop? After that we have the four tigers in Asia and over the last 15 years or so lots of interest in China to the extent that in some sense perhaps Japan has been passed by a bit. I actually don't think that's a bad thing to have other countries in Asia to compare to. As we'll be talking about tonight, I'm not a believer in the idea that Japan is unique. I think that kind of interferes with our analysis and lessons that we can learn from our interactions and study of Japan. So I think it's good that we were able to have a broader comparative perspective and it's no longer accurate to say Japan is the only non-Western country that has successfully developed. I do note that these perceptions have changed kind of dramatically over time. When I first started studying Japan even then, China which had not yet developed was capturing everyone's attention with President Nixon's visit to China in 1972. People would say to me, my classmates would say to me, so why are you wasting your time studying Japan again? That's not what people are interested in. But it turns out, however, that if I simply waited for 10 years till the 1980s, then suddenly people would say, well that was the most brilliant thing I've ever heard of. Who knew that you're supposed to go ahead and become an expert on Japan? Brilliant. As we all know, starting in the mid-1990s, I got stupid again. Lost all my brilliance as Japan encountered some serious difficulties. In the last three years, I'm uncertain. I'm wondering if I'm starting to feel a small stirring of brilliance once again, hoping that albinomics will do some good in both not only for Japanese society, but perhaps in again altering that perception to some degree. As I mentioned, my interest or fascination has not changed at all. It's been constant. I've enjoyed only work with Japan very much. And I do note to young lawyers who come to Tokyo that despite the fact that China is a much larger market, it's also a much more competitive market. And in fact, if you are able to get the serious background in Japan, Japan is a better market, I would say. Part of the reason might be that Japan has turned a little bit inward. They need people who have language and other capabilities to kind of bridge some of the gaps we've been talking about. So that's not all for positive reasons. But nevertheless, I believe it's true, and I suspect it's true for some other fields as well, not just the field of law. So the problem, I suppose, is that we still have some challenges in studying about Japan, particularly when we try to help bridge the gap between specialists and general audiences. And I think there's many of us in this room who share that challenge. It is a little bit difficult to do comparative studies on Japan, and particularly in my field of law. And I think there are a number of reasons for that. I think the two most important ones are a couple of stereotypes that are very difficult to overcome, even today in some sense. One is that Japan succeeded so dramatically early on and then seemed to have such serious problems after that, that the perception is that Japan was a unique success and then was a unique failure. And we're always looking for where the pendulum is swinging, and that seems to influence our views of Japan perhaps a bit too strongly. The other one probably is more familiar and something we deal with all the time, and that's the question of culture. And we'll be talking about that in a number of contexts this evening. Let's talk about the pendulum swings for success and failure also. Let's talk about that first for just a few minutes. So why did we originally think Japan was such a success? Obviously, one important reason is very dramatic economic growth and development. I think we have a tendency to look at economic success and equate that with all kinds of success. If they're successfully developing economically, that must mean they have good systems for lots of things, including my own field of corporate governance. At the same time, Japan in the 1980s, when we started looking at it, was socially impressive. Very low crime rate, very high literacy rate. I think we're all familiar with a number of very positive social factors. I also would suspect that we're always holding up a mirror to ourselves at the same time. Certainly, I think it's true in the US. I think it's most likely true in the UK as well. Japan is successful or unsuccessful compared to what? Compared to whom? Usually, we're implicitly comparing it to ourselves. So in the early 1980s, when the Dean of Harvard Law School and President of Harvard University, Derek Bach, was running around saying the US has too many lawyers, we have a litigation explosion we should learn from Japan, that highlighted some stagflation in bad economic times in the late 70s and early 80s and was a period of time when we were not very happy with what we saw in the mirror about ourselves. I suspect that that made Japan look better by comparison. Some years later, when the economic bubble burst, now we have sort of the opposite phenomenon. We have low economic growth. The positive social factors are now ignored. We look in the mirror and we're very happy with ourselves, at least in the US in the 1990s. We think we've figured out what a post-industrial society is supposed to look like, growing financial sector, technology innovation, lots of good things, good economic growth. At this point in time, Japan talks about reform, it doesn't seem to be doing anything dramatically, at least by our standards. Despite the fact that they now have a clear, successful model to follow in the US, and I would probably include the UK in that as well. Ironically, the two factors that were very often cited for Japan's success, government bureaucrats and kind of cultural uniqueness, were now cited as important causes of failure. Bureaucrats who had been brilliant suddenly became stupid, which I'm very sympathetic to that argument, because as Japan became unpopular, it seemed like I was following the same trend as them. Culture, well, wasn't exactly clear to me how harmonious social relations or consensus or teamwork decision making would be that important, a factor for success or failure, but I think it's pretty clear that people thought so. As I mentioned in the last few years, we're still trying to sort out what's happening more recently. And so we're not sure, I think, if the perception is going to change dramatically or not. I would mention though, I think that in fact, perceptions do change. And the question of who's kind of setting the example, who's the leading country. Those perceptions have in fact changed quite dramatically and quite suddenly, several times over the last decade, the last few decades. It's true in my own field of comparative corporate governance which really got, if not started, became important in the early 1990s as Americans were looking at Japan and saying, what are they doing better than we are? What did we do wrong? How come in the United States we don't have main banks when they're so successful in Japan? Where did we go wrong? Within about six or seven years, that idea had totally reversed. And now it was how come the Japanese cannot reform when they have an obvious model in the US, which is the global standard. And that was not a long period of time in between those two perceptions. It's always impressive to me how certain people are of the perception at a given time and how quickly they can change. The illustration I have up here, of course, is the next swing in the 2000s. We now have China as the perceived to be the rising power. Of course that is based on economic growth and some other factors, but perhaps again a little bit exaggerated or again subject to change more recently. So I have sort of a private informal theory that every country gets its 10 years. And Japan had its 10 years in the 1980s and the United States had its 10 years in the 1990s and China had its 10 years in the 2000s. And we're about ready for a change now. Almost impossible to tell in advance who will be the next example. India, I'm not sure. A couple of years ago people might have said Brazil, Mexico. Even though despite our certainty we can never seem to figure out who's waiting in line to set the example next time. All right, so I'm a little bit sceptical that some of the perceptions concerning success and failure, of course they are based partially on fact or some kernel of truth, but nevertheless I find that they're exaggerated. So that's one stereotype that I think we always have difficulty encountering or dealing with successfully. The other one which is probably even more important that we're all familiar with is this idea of Japanese culture. Yes, the Japanese are very good at cuing and bowing. I think I've exhausted my British vocabulary when I said cuing instead of lining up, but please bear with me. Does that mean they have a unique culture? And yes, we understand that Japan was the first non-Western society to successfully develop and modernize and that was impressive and that created an impression that lingered. We understand that. And people talk about Japan as a harmonious society. The Japanese love that talk, I would say. They are very happy with it. I think it kind of fits with the national narrative in Japan and I don't mean this to be disrespectful or sarcastic in any way, but for the real historians of Japan, they know. In fact, there is a history of conflict in Japan. It hasn't all been harmonious for much of its history. Nations have narratives. I think the narrative about harmonious Japan probably first got started in the Meiji era, not just Japan, Germany and Italy, the late modernizers, had a serious task of convincing people who had been wedded to and identified with their local governments or societies trying to get them to think more in national terms. In the case of Japan, this was done primarily through compulsory national education and compulsory conscription system. If you're going to have a compulsory conscription system, you better give people a good reason to go and fight, I suppose. Again, in the post-war years, our image of Japan is labour peace, cooperation between labour and management, system of salary men, lifetime employment that rise up through the ranks, all very harmonious. It actually was not like that in the 1950s. It was very serious labour strife. Again, it's kind of a narrative with some kernel of truth, but it could be questioned on quite a number of fronts. Again, this is not to pick on Japan in any way, shape or form. I think every country has its national narrative. In the United States, we're the land of the free and the home of the brave. We have no class, we're a classless society. We have very high social mobility. We had a Western frontier and manifest destiny, which sharpened and honoured our rugged individualism. We also have a very strong sense of exceptionalism, although I don't know if we use the term unique very much. Yes, when Great Britain wanted to get rid of people who weren't very valuable, they sent all of them to Australia, and all the good people came to America just to ask any American, and they'll tell you all about it. We start talking about our social mobility or our exceptionalism or freedom, and every American you meet will say, oh yes, you have a very good understanding of the United States. Unfortunately, possibly as a result of the recent presidential election, some of us are taking a look at statements like we have a classless society. The history book I'm reading for fun right now is the title is White Trash. Untold 400-year history of class in America. It turns out that 75% of the people who came to the American colonies during the colonial period were indentured servants of one type or another. There's only one plantation owner, then you need lots of people to work on that plantation. Again, I don't mean to sound sarcastic. I think every country has its national narrative, or if you want to be a little bit more cynical, perhaps its national myth, and all of them were created at some point in time with some intent or some deliberation. Perhaps this is just a reminder of a basic approach that all historians talk about, which I'm sure is true, that we know that history consists of contested narratives. There's never just one version, and whatever narrative is most popular at any point in time can change. It's always contested, it's always subject to revision. So I don't think Japan is different from any other country in that regard. Unfortunately, I think in the case of Japan, the very strong emphasis on culture can lead to having a very kind of essentialist view. All we have to do is figure out the cultural aspect, and we've got everything solved. I do recall very specifically a few years ago, I was in Tokyo, there was a group of college undergraduates visiting from the United States on a one or two week study tour, and I had agreed to give them a talk about Japan. I gave my talk and they had a number of questions, and at the end of the day, it turned out what they really wanted to know was, so tell us what the essence is. Tell us what's the most important concept that we can use as kind of a lens to view and understand Japanese society. Would it be Confucianism or Harmonious Social Relationships or perhaps they're good at miniaturization? My response was, well, maybe we shouldn't be looking for a single lens or a single grand principle. If your society is very complex and contentious, why should other societies like Japan be simple? Why should one concept which is probably exaggerated at least to some degree, why should that be the key or sufficient single lens to view society and understand a complex modern society? I would add that I'm not one of those people who says there's no such thing as culture. That's not true at all. I don't believe that human beings are rationally economic animals, but I do object, I think, to this idea of elevating the idea of culture so that it's the most important factor, that it's kind of an essentialist view of culture. I think that hinders rather than helps us in understanding Japan or any society. As some of the business examples will show, I do think culture is important. I liken it in a way to style. It makes things easier, it makes things more pleasant, it can affect the outcome on the margins to some degree, it's good to know about it and learn about it, but the substantive aspect is generally more important. We'll get to some examples in a minute. I've identified two stereotypes, kind of exaggerated views of Japan's success and subsequent failure and what I think are exaggerated views about unique culture and so the main question I want to talk about tonight is so what's wrong with that. If it were just a question of academics are unable to convince the public at large that their research is better than the public image, simplified public image of Japan or any other country. If that were the only issue, I don't think it would be that big a deal. I think I love academics, I think it's important, but I don't think that in and of itself would have very serious practical implications or impact on what we're doing. But I think it is a problem because it's not limited to academia at all. I think it strongly affects public policy. I think it strongly affects private relations including business and commercial relations. And I think it can lead to lost opportunities and mistakes in both policy and business in addition to academia. Often I think those two stereotypes come together. Japan is a success or a failure and it's due to culture in one form or another. And sometimes it's hard to separate those consequences as well. If we have an oversimplified view about something, probably we'll have academic public policy and practical business implications. So let's take a look at a few examples. This starts out being academic but you quickly realize it's not strictly academic. One of the things we're always told and particularly as someone who focuses on law, this is one that I pay particular attention to, Japanese don't like to dispute. They like harmony. And so they don't like law because it's very formal and you have to make black and white distinctions. And they certainly don't like disputing things. They certainly wouldn't like litigation for example. And there was research early on in the post-war period that sort of put forth that thesis. Japanese don't have a strong view of law or legal consciousness and they don't like to dispute particularly in formal sense. I think within 10 or 20 years that view was very largely shown to be not accurate. And I cite one in their country examples. I have one work by John Haley. That was back in 1978. At least for Japanese law specialists and probably Japanese studies specialists as well, it raised quite a number of questions about this cultural explanation and I think convinced us that the cultural explanation was inadequate. I think there are practical consequences. If you believe that everyone will do anything to be harmonious and people will never dispute anything, I think that would cause you to consider certain policies or certain approaches to business and other practical pursuits which might not get you to the right place. In reality there is litigation in Japan. It's probably increased in the 1990s and 2000s after the economic bubble burst. If there wasn't very much in the 60s and 70s, the economy was doing wonderfully well. Not too many people had much to complain about. In economic terms at least. When we get to around 2000 or so, we start to see some differences. I certainly have Japanese friends who are surprised that major Japanese banks are going suing each other in 2004 that you have shareholders suing their corporations, the biggest one being in the year 2000, the Iowa bank case. They had a rogue trader in New York and a shareholder litigation back in Japan. Litigation rates are certainly low compared to the US but not particularly low on a much broader comparison. It could well be that the United States is the outlawyer with lots of litigation rather than Japan being the outlawyer without having much litigation. Although it's not dispute resolution per se, I threw in at the end the example of Sokaya who were famous for being the kind of racketeers who would go to general shareholder meetings and make sure that no one questioned management. Although not litigation, some people who looked at Japan in the 1990s loved Sokaya because that seemed to be the most extreme example of the great lengths that Japanese people would go to to avoid open disputes. Now, they don't exist today. The last major case I can think of was 2002. They don't exist at all, and if you go to a general shareholders meeting of a Japanese company today, and I went to a couple a few years ago, they don't look that different from the United States or any place else. As far as I can see, most of the time is spent advertising to the shareholders about how wonderfully the company is doing and how they should keep their shares and buy some more. And if there are questions even in Japan, then they answer the questions. So this seemed to be described accurately Japan at one point in time and due to a number of reasons, which I'm not going to go into great detail on today, that ended. It ended at a time when people don't focus as much on Japan as they used to. So if you want to go and look for articles, academic, maybe there's more journalism, if you want to go look for academic articles about what it's like to be at a Japanese shareholders meeting, you won't find very many. When Japan was important and the Sokaya seemed so fascinating, lots of people wanted to write about that. When they've kind of regularized things and it doesn't look that different from anywhere else, it's not so exciting to write about. Here's another example. This is more kind of in the public policy realm, I would say. I actually wrote a chapter on this in the book that I mentioned earlier on. About five or six years ago, I spent some time at the Bank of Japan and they said to me, you can research any topic you like as long as it has something to do with banking or the financial system. And so I said, oh, that's great. Let me kind of look through some things that I've taught in the past or looked at in the past. And I got the announcement of this big bang bank and financial deregulation. It was the Hashimoto Government in 1996. And I looked back at the official announcement and the very first words were to deal with the challenge of an aging society. We're going to deregulate the banking system. And I said, that's interesting. That kind of took me by surprise. And so I studied about that. And most people until a few years ago, most non-Japanese at least, looked at that effort, which got a lot of publicity at the time and eventually that it was a failure. It was a failure because economic growth rates had not picked up. They were still rather low. Stuck at about 1% or a bit less. So if they had been successful, we should have seen some more results in the economic growth rate. In addition, even though the Japanese changed the law, we all know in Japan that doesn't count for much because the government bureaucrats call everything anyway. And the law isn't so important. So for both of those reasons, people concluded, or perhaps I should say assumed, that the financial industry deregulation was not successful. I think this was a serious problem. Japan is one of the first countries to face serious aging of society. They were one of the first countries to accumulate very large public debt. They had their economic bubble burst. They faced a number of issues, which I think people outside of Japan did not pay sufficient attention to because it was Japan, and Japan is a unique failure. The first article I can recall reading that said Japan was not a unique failure and we should pay attention to these things, I think it was 2010 written by the Head of the Federal Reserve in St. Louis, I believe. So right around 2010, then we start getting some consequences in Europe with Greece and then Italy, encountering similar kinds of problems. Aging society, large public debt, low growth rates. But everyone, pretty much everyone viewed Japan's effort at deregulation of the financial system as a failure. And again, the evidence was basically a lack of economic growth and some presumptions about what bureaucrats would do. I tried to look at this and I didn't come in with any notion or prefixed idea of what it would be like and I found that they did change the law. It didn't have all the effects and impact that they hoped it would have. What they were hoping was that this would be a great way to deal with an aging society. So one of the biggest problems of an aging society is it's impossible to save up enough money to give all the people their social welfare payments down the road. Not enough people working today, too many people, getting older and getting ready to receive benefits. When I was at the Bank of Japan and I looked at it at that point in time, something like 50% of all the household assets in Japan were in cash or on deposit at the bank getting basically no return. And then people talk about it. I don't think it's really that difficult because a country is not that different from yourselves or your family. If you're trying to save up for your retirement and half of your assets are getting no return, it's a big challenge. You're going to have lots of trouble to save up enough to live on in your old age. And this was happening to Japan as a society. So they did deregulate. My conclusion was they did deregulate, but banks were used to certain kinds of relationships with corporations. The private sector entities that were in a position to offer new products aggressively and start doing different things did not take advantage of the regulatory or deregulatory opening. This was a time of deflation. The economy wasn't going well. People were not eager to try new things and assume risk for new things. And so the government did, I think pretty much what it said it would do, but down the road the consequences were not as favorable as had been anticipated. By the way, that problem has only gotten worse. It was 50% of household assets that were getting nothing and now it's 55% in climbing and a big booming business in household safes. It's no longer okay to put it under your mattress. That's not safe enough. So if you're a household safe manufacturer right now in Japan, you're doing great. I don't think that's a good sign for society as a whole. So I think we could have, to sort of repeat very briefly, I think we missed the story, largely missed the story of how important it is to have an aging society and how that problem is made worse by large public debts, deflation, and some of the other issues that Japan has faced. We were too quick to say that's just Japan. When in reality I think today we're more aware that those are problems faced by other societies as well. I don't want to spend too much time on it, but I will mention in passing when I finished at the Bank of Japan, I went to the Bank of Korea to give a talk and after the talk I had dinner with their top economic researchers and I asked them, so do you really have a better plan than Japan does? Or 10 years from now are you going to be in the same situation with an aging society and a low growth rate? And they hemmed in Hwod and they said, we're going to be in the same situation. And we don't know what to do about it either. And I don't think they would say that publicly for sure. So it's difficult public policy issues. I will note that in Japan everyone knew about it. There were very voluminous government reports written on it in 1981 about the aging of society and what should be done about it. Easy to talk about, very difficult to deal with. So what should we do with the aging of society? By the way, the issue I'm talking about, aging of society and how do you fund future social welfare payments, these are not really complicated statistical or mathematical issues. If you were a demographer, and I probably can't remember all three, it's your marriage rate, birth rate and one other factor. And you can have very accurate projections going out decades. For economic growth, some people use two factors, some people use three. Two factor people, size of the workforce, increase or decrease in the working age population and productivity, that's it. You know your potential GDP growth rate. Any particular year you might get a little bit above or below it. So these things you can see coming from a long distance away, but still very hard to deal with. So in the case of Japan, which is probably most advanced in terms of aging, what could be done, shrinking workforce, well immigration, and there's a little bit of talk of it, but that always struck me as being something very difficult for Japan to do. Probably I think the better path would be greater role for women. Now here we come up against another stereotype. And I hesitate to talk about this too much, because Dr McNaughton is one of the leading experts in the field of women and employment in Japan. So I'll just cheerlead a little bit for the importance of her work I think. So we have this stereotype that for whatever combination of reasons, call it culture or call it whatever, women should really stay at home. They really shouldn't have the same kind of careers that men have. And for the last few years, the current administration in Japan has started to talk up a greater role for women in the workforce. But at the same time, it wasn't that long ago, two years ago, every woman who has a child should have three years of maternity leave. That came from the same source, that idea. Which I think would have made sure that no women stayed in the workforce after they had children. I'll write the consequences we've already been talking about. It's not getting better, it's getting worse. The aging of society continues. Japan is unsuccessful in increasing the working age population. So stereotypes. My administrative assistant at Sholesbash University objected to this image over here. I said, well, you know, it's supposed to be a stereotype, it's an exaggeration, I think it's okay. I said, besides, it's sort of, whenever I look at that, I think of, so this is what Donald Trump wanted to do to Hillary Clinton after all. Anyway, so stereotype, and can we really have women have serious careers in the workforce? So, whoops, that's the wrong way. So going back for a second. There are a limited number of companies, mainly foreign companies, that took this stereotype and said, this is a wonderful opportunity for us. And the prime example that came to mind immediately when I started thinking about this was IBM. Back, I don't remember exactly when probably the late 1970s, at that point in time you were supposed to have a Japanese partner, you managed to persuade the Japanese government to let them set up a stand-alone subsidiary in Japan. They were the apple or the Google of the day, they were the coolest company around. And they came into Japan and they found out it's really hard to hire good Japanese managers. Because they all work somewhere else and no one changes jobs midstream, and they all prefer safe, steady, will be there forever, Japanese companies. But when they started interviewing around, they found, to their delight, hey, there's these really talented women who can't seem to get good jobs at major Japanese companies. Let's hire them. We'll just hire the best people we can find and we can find a fair number of them. I don't know if that's still true today. I don't know what the current workforce of IBM looks like. But they were relatively known for that some time ago. And I also can't help wondering if that strategy would even work today. It still might. It still might work today. Also, I just note in passing that I don't think this is an issue that only affects women. I think any issue that involves women also involves men. And I think part of the problem is that the traditional use of males at Japanese companies is very inefficient. You shouldn't have to go out at night drinking. They should get to go home and stay with their families once in a while. So I don't want to sound like I'm saying that women have a horrible time and men have a wonderful time. I think it's always the sort of opposite size of the coin. So let's talk about some business examples. I was asked to, or I thought about some business examples. I practice business law and teach it as well. And again, I'm in favour of people who don't have a lot of experience in Japan studying and learning about culture and traditions. I think that's a wonderful thing. I'm not opposed to that at all. I think it's nice, it's friendly, it's fun to have your name cards out facing the right way and help smooth relations. But will that get you the deal? If it were up to me, I'd much rather have the best product at the best price and somebody doesn't know anything about Japan and doesn't handle name cards properly, I think I'll be better off. So again, to the extent that cultural issues to some extent reflect a kind of style that smooth things over, we shouldn't conflate those kinds of issues. They're still relevant, but we shouldn't over-emphasise them at the expense of what I think are more substantive issues. OK, so here's my favourite slide. I actually told this to someone in my law firm in New York once when he said, what's the secret? I've got to go out with some Japanese bank manager and we're doing this negotiation on a restructuring and we want them to do what we want them to do. So what's the secret to get them to do what we want them to do? I said, sorry, no secret. I lived in Japan long enough that I'm confident if there were a secret handshake, I would know it. Well, they don't shake hands much anyway. No, that doesn't work. So let's talk about something a little more substantive. There are in fact quite a number of areas you could pick. Here's one example, technology licensing. So in the 1970s and 1980s there was a very strong image that Japanese companies don't understand contracts because at the time when American and other Western companies licensed technology to Japanese companies, regardless of what the contract said, the Japanese companies would say, oh well we're in a relationship, send us more technology, you should send us more, we shouldn't have to pay any more for it. We're in this wonderful relationship. They want everything. And I heard that from quite a number of people complaining that licensing to Japanese companies. However, and I'm skipping Korea here in the 1990s, if we fast forward to the 2000s, now people say the same thing about China. And it's the Japanese who are saying it about China, actually. All those Chinese, they don't understand the rule of law. You sign a contract with them and they ignore it. They just want everything. This is a problem because if you conclude therefore, if you believe that and you conclude therefore I shouldn't worry about contracts very much, I think that would be the wrong conclusion. People who start out that way usually have their lawyers rescue them anyway, whether intentionally or not. But I don't think it's true. Today between Japan and the US or Europe, there's no longer any image at all because it goes both ways. We don't know. We don't know who's licensing to whom. Totally depends on the product or the service involved. It's all over the place. We don't hear anything today about Japanese companies' attitudes towards licensing or anyone else's. Chinese, other newly emerging nations in Southeast Asia, we hear about that. So I'm not saying that again, culture doesn't matter at all. They might talk about relationships. They might emphasize. They might say it in a certain way that might lend you to believe that there was some cultural component. However, if we were in this kind of situation, what I would want to know first and foremost is who's the licensor and who's the licensee. And I will give you a pretty accurate prediction of who's going to have a very expansive view of the scope of the technology that's involved in the license. It's always going to be the licensee, no matter how they phrase it or how they say it. That's just economic common sense. Going along with that, contracts do count. Even if the licensee is always going to have a somewhat expansive view, to the extent you can define it more rather than less within the terms of the contract, as at least of a starting point, as a matter of degree, you'll be better off. I would say. It's a safe thing to say. Another example I think of a stereotype based on experience, but a certain kind of experience that gets blown out of proportion and gets linked to this idea that culture is so important. I guess it's good news, or maybe it's the final proof that Japan is not unique. I'm not sure. Countries are rising economically in other ways all over Asia now. It's much easier to have a broader comparative perspective among countries that are different from western countries. I suppose that's good. We have had attempts to take this idea of culture that started describing Japan. That's how it originated. We have had attempts to expand that to cover Asia as a whole, and Lee Kwan Yew from Singapore was the person most associated with that viewpoint. I suppose all of this is good in a sense for Japanese area scholars because now we've got lots of company of people trying to deal with this issue. It used to be just us in Japan. We felt a little lonely. Now there's people studying quite a number of Asian countries who get to share our challenges. Again, I think there's kind of a success in pendulum swing issue here. This idea of Asian values was the focus of attention, as I recall, probably around the early 1990s, when the four Asian tigers were relatively new on the scene and attracting lots of attention. After the Asian financial crisis in 1997-98, when the Asian tigers didn't look so successful anymore, you stopped hearing about Asian values. I never sat down and tried to quantify it, but I'd be willing to bet that that's true. In fact, you started hearing criticisms of places like Singapore as Asian values. That's an excuse for a soft form of authoritarianism. With the rise of China, they didn't emphasize the culture. They talk about it occasionally, but they like to talk about socialist society with a market, some sort of markets-oriented socialism, emphasizing politics, not culture. This idea of culture has receded a bit, but you still see probably more references to it than you should in this exaggerated, essentialist form. I know today I'm preaching to the choir that nearly all of you are very sophisticated about the topics we're discussing today. To the extent that we already know this, what should we be doing about it? I think we should give up the idea that there's kind of one essential lens that will allow us to understand everything that's going on in Japan or any other country. I think that usually is more harmful than helpful. Perhaps de-emphasize that. When someone asks what the secret lens is, I say maybe there isn't one. We can try the best we can to ignore the popular perceptions that change every 10 years or so about who's successful and who is not. As I mentioned an article by John Haley before, how did he get out of this? He had no cultural assumptions when he looked at litigation rates in Japan. He looked at the data and said, well, perhaps it's institutional. If we had more judges or more lawyers, that might lead to more litigation. He looked at history. There are quite a number of instances in Japan going all the way back to the Tokawa era where the government says we're going to restrict litigation. In the Taisho period, there's mandatory conciliation in quite a number of cases. If the Japanese culturally hated to have disputes, why did we have to have laws that limited litigation? Interesting questions that were raised by some of this research. The successful ones, I think, have been efforts that use the normal academic and analytical methodologies and tools that we use for any other country. Of course, certainly every country is different. I think one thing that we can do is provide people with some context about Japan. Taking a step back, this is kind of the challenge of comparative studies overall. If we get too excited about culture and have a lens that's looking at culture, well, then every country is unique. It's hard to make comparisons that are going to be meaningful, that are going to help us. I think the other extreme is people who look at rational choice or people as economic animals. If people act the same everywhere based on economic incentives, then, again, it's not much use to make comparisons because you already know the answers. I think both those extremes are kind of not very useful. I think what most of us try to do is look for the middle ground where we look at both similarities and differences and try to put them into local context. I don't think it's possible to directly transplant things, but you can adapt things. Certainly the United States tried that in Japan big time during the occupation. Usually, efforts to make someone else like us do not succeed. To give one very brief example, let's think for one second about the Japanese stock market. Probably most of you haven't thought about that recently. But, as you probably know, in the pre-war period, there's all these private family-owned conglomerates. That's the traditional Japanese system. The US occupation goes in. They don't like that. We're going to break up the Zaibatsu. We want Japan to look more like the US. We're going to have a broad range of individual shareholders. That's good for democracy. In fact, they busted up the Zaibatsu and they distributed shares to the public for free. With the idea that it would become like the US. So what happened over time? It didn't become like the US. Most Japanese individuals did not have a history owning shares in companies. They didn't feel completely comfortable doing that as a form of investment. Some Japanese said, we're going to return to our pre-war system. That didn't happen. Eventually what happened was as the individual sold stocks into the market, corporations bought them. You had corporations helping out their friendly corporations down the road and ended up with a kind of cross-shareholding system, which has, the last 20 years or so, has been fading gradually or weakening. So constant change. You start out with one idea. We don't like the way you're doing it. You should do it the way we're doing it. Over time it evolves into something different from either what existed before or what the new attempt to transplant would be. I think that's not unusual. Still worthwhile making comparisons. Context. I suppose the most famous example in Japan is Article 9 of the Constitution. If you just read it and you don't know anything about Japan, you would think this is pretty strict. They're really restricting Japan's self-defence. If you don't know any context. And people who want to get rid of that like to talk about it without context. Well, any country should ever write a self-defence. I think we would all agree with that. But again, although I don't know if it's unique, Japan does have its own context in terms of its own pre-war history and in terms of its historical relationships with other countries in Asia. And so that kind of put things in somewhat different light if you're going to make substantial changes to that particular article. That doesn't mean you should not do it or you cannot do it. I think when I say context, it's a shorthand for meaning that we should fully understand the context, the implications and the consequences of the choices that we make that might be different in Japan as opposed to some other country which might have a similar kind of text in their constitution, although no other country does. But there are these historical and other consequences and implications that you probably should take into account before you decide on the best course of action. I do think the situation is actually improving over the last five or six years for unfortunate reasons. I think following the 2008 financial crisis, the United States no longer holds itself out as the global standard and has no longer seen quite in the same way as it was before then, at least in my field of corporate governance. Europe since 2010, 2011 perhaps. A number of countries encountering some of the same kinds of problems that Japan encountered in the 1990s and 2000s. So perhaps people are a little less quick to talk about how unique Japan is in terms of success and failure. As already mentioned, other countries in Asia have also done very well, broader basis of comparison between Japan and other non-Western countries, which might also dilute the impulse to point to Japan as being culturally or otherwise unique. So, again, using standard methodologies, methods of analysis, Japan is a normal country placed in its own context, and I think our job is to help provide the context and avoid some of the consequences of the still fairly popular stereotypes that we've been discussing today. Again, as Professor Beasley reminded us, we should keep communicating and educating and sharing our views with other people out there in the world. And with that, I'll thank you for your kind attention.