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Nikkei's FT Takeover
A $10,000 Invitation to FT Editor-in-chief Lionel Barber

I boast two qualifications for writing about Nikkei‘s takeover of the Financial Times. First I am a former editor at the paper. Secondly, I lived 27 years in Japan and in the late 1980s was virtually alone in predicting the Tokyo crash. I believe that in acquiescing in the deal, the FT’s current editor-in-chief Lionel Barber has little inkling what is ahead. I am hereby, therefore, extending an invitation to him to discuss the issues publicly. As an inducement for him to come forward I pledge to pay $10,000 to his favorite good cause. In the open letter below, I lay out some of the issues.

Dear Lionel:

I refer to your public assurances that the Financial Times’s independence will not be compromised by the Nikkei takeover. You are misinformed. Frankly, I concur with the BBC’s economics editor Robert Peston who has tweeted that this is a “desperately sad” moment.

As you know, I have spent 27 years covering finance and economics from a base in Tokyo. It took a few years to get my bearings but eventually I began to piece together the real story. The truth has turned out in many crucial respects to be the opposite of what my previous reading of the Anglophone press had led me to expect.

For a start, Japan is not a pro-Western democracy. On the contrary it remains a bizarrely authoritarian society that in many respects is tacitly anti-Western. Much of what is presented in the West as democratic activity is merely Gilbertian theatrics. Indeed for an introductory guide to latter-day Japan’s age-old tradition of cast-of-thousands make-believe, you might usefully consult the libretto of W.S. Gilbert’s Mikado.

Critically for the future of the FT, in few areas of life is Japan’s otherness so pronounced as in the media. As the prominent British commentator Alex Brummer has pointedly asked, “do we really think that the editors and managers of Nikkei understand the values of independence of thought that distinguish British financial journalism?”

Not only is the Japanese press not free, but Japanese editors quietly rejoice in a role as principal apologists for the Japanese establishment, and in particular for an all-powerful, if virtually invisible, higher bureaucracy. When such editors attack Japanese companies, they are typically not acting autonomously but are merely performing their appointed role as pit bulls settling scores for the bureaucracy.

The “special” nature of Japanese journalistic ethics is readily appreciated if you ask yourself a few questions. When, for instance, did Nikkei last publish a serious account of Japan’s mercantilist trade policies? I am not aware that it has ever done so.

And where was Nikkei on the “ comfort women” sex slavery issue? Nowhere, of course. The issue was first raised in the Dutch press, which focused on the brutalization of brave Dutch women captured in the early 1940s in the then Dutch East Indies. The Dutch women were the tip of an iceberg but their allegations inspired East Asian victims (principally Koreans) finally to find their voice in pressing for an apology and compensation. The Japanese press was eventually embarrassed into breaking its silence but only after the story had become a cause célèbre in the West.

All this is the more piquant for the fact that the FT’s coverage of Japanese economics in recent decades has been remarkably naive. The FT has led the global press in presenting Japan as a basket case. In reality given its demographics, Japan has done remarkably well (more on the counterintuitive truth of Japan’s demographics in a moment).

In publicizing the basket-case story the FT has fallen for a characteristically brilliant Japanese propaganda initiative. Japanese officials see major advantages in pretending their nation is weak and dysfunctional. Certainly in the 1980s they learned the hard way that clear evidence of Japan’s success created a hornet’s nest of diplomatic problems. Most notably trade tensions with the United States became so explosive that a trade war seemed imminent. Meanwhile victims of imperial Japan’s World War II atrocities – and their families – began pushing in earnest for compensation (they had previously been fobbed off by claims that Japan was too poor to make amends). Then there were countless Third World nations begging for a share of Japan’s foreign aid budget. Finally there was the matter of the rising Japanese yen. As an exporting nation, Japan – like Germany – has consistently sought to keep its currency as undervalued as possible.

All these problems were quickly neutralized when, with the stock and real-estate crashes of the early 1990s, the basket case story took hold. For a nation noted for its capacity for make-believe, the message was clear: act out various routines that emphasized Japan’s weaknesses, real or imagined, and hid its strengths.

The strategy has proved spectacularly successful, not least in reining in American pressure for market opening. A chivalrous United States, faithful to the principle that you should not kick a man when he’s down, has not pressed Japan on trade in more than two decades. Yet the Japanese market remains as closed as ever. In the car industry, for instance, even Volkswagen, which is a match for Toyota in any other market, has yet to achieve more than a token presence. (No wonder therefore that with the benefit of big profits in a large sheltered home market, Japanese carmakers have out-invested most foreign competitors during the lost decades – so much so that the Japanese industry has almost doubled its unit output since 1989.)

ORDER IT NOW

All the doom notwithstanding, Japan is not only one of the world’s most prosperous nations but has made remarkable strides in recent decades. The point is obvious to foreign visitors the moment they arrive. For a start Japanese airports are state-of-the-art and invariably these days enjoy fast public transport links to downtown areas. Meanwhile the Japanese people are among the world’s best dressed and they drive some of the world’s best cars – in particular Lexuses and Infinitis that are a world away from the tinny little three-wheelers of the 1980s.

Then there are Japan’s urban skylines. These have been transformed by a huge building boom during the “lost decades” that has greatly alleviated Japan’s previous shortage of housing space. According to figures compiled by skyscraperpage.com, already as of 2012, 81 high-rise buildings taller than 152 meters (500 feet) had been constructed in Tokyo since 1989. That compares with 64 in New York, 48 in Chicago and seven in Los Angeles.

The construction boom has produced many superlatives. The AkashiKaikyoBridge, linking two of Japan’s main islands, boasts the longest main span of any bridge in the world – no mean feat given that the engineering challenge in bridge-building increases with the cube of the span. Then there is the world’s first long-distance maglev line. Construction is well advanced, and trains will eventually run at world-record speeds of up to 350 miles an hour. Meanwhile the Tokyo Skytree skyscraper-cum-communications-tower, which was completed in 2012, boasts a height of 634 meters. This makes it the second tallest free-standing structure in the world after Dubai’s Burj Khalifa.

Now for Japan’s problems, alleged and real. The biggest is often assumed to be its aging population. Actually this is a solution, not a problem. Far from reflecting some terrible post-crash national death wish, it was set in stone by the so-called Eugenic Protection Acts of the late 1940s. The objective was, by various means, to induce a dramatic reduction in a previously super-high birth rate. In the 1930s Japanese women had, in obedience to military diktats, procreated profusely to populate an expanding empire. In the late 1940s, however, top officials decreed a reverse course as they recognized that, shorn of empire, Japan faced an alarming food security problem – far worse even than the problem that later prompted China to adopt a one-child policy. (On a per-capita basis, Japan boasts little more than one-third of China’s arable land.)

Japan’s demographic profile is a triumph in another way in that it stems from remarkable progress in healthcare. Average life expectancy has increased more than 20 years since the late 1940s – and given that the Japanese have been eating more McDonald’s hamburgers lately, diet is not the explanation. Rather the Japanese healthcare system, one of the world’s most efficient, excels particularly in early diagnosis of diseases that if not caught in time claim lives.

Perhaps the most compelling single statistic is that just since 1989 alone, average life expectancy at birth has increased by 5.9 years – to 84.7 years from 78.8 years. This means the Japanese now typically live 4.3 years longer than Britons and 5.0 years longer than Americans.

Of course, all this has a cost in that Japan is in the middle of an acute, if ultimately probably temporary, demographic imbalance. Whereas in the 1960s and 1970s, Japan boasted a high ratio of working-age people to dependents, the ratio now is one of the world’s lowest. Yet such are the inherent strengths of the Japanese economy (particularly in advanced producers’ goods – a crucial sector formerly dominated by the United States) that Japan has continued to earn healthy current account surpluses. This is all the more remarkable for the fact that the United Kingdom and the United States, both of which have far more favorable demographics, persistently incur huge and ultimately catastrophically unsustainable deficits.

Japan’s continuing success in exporting is rarely alluded to in the Anglophone press. For details of how the Japanese have highly effectively targeted a host of “chokehold” industries (in advanced materials, key components, leading-edge production machinery), I commend you to my books, particularly Blindside and In Praise of Hard Industries.

What is not in doubt is that all through the lost decades Japan’s trade success – and consequent preeminence as a capital exporter – has financed an impressive array of foreign acquisitions. In the United Kingdom alone in the last few years we have seen such mega-deals as Hitachi’s $1.2 billion purchase of Horizon Nuclear Power and Olympus’s $2.2 billion purchase of Gyrus. Then there has been Sompo’s takeover of Canopius, Toshiba’s of NuGeneration, Dentsu’s of Aegis, and Brother’s of Domino. For a fuller list click here.

In many ways Nikkei’s $1.3 billion purchase of the FT is likely to be remembered as the most consequential of them all. The deal values the FT at a remarkable premium to earnings even by the highly inflated standards that have become common in recent years on the London stock market (particularly given that the FT’s headquarters building in central London is not included). Commentators have suggested that Nikkei is paying far too much. Actually from a Tokyo point of view, the deal is a steal. What the commentators fail to understand is that for Nikkei this is not about profits. Rather it is about power. Nikkei is fronting for the entire Japanese economic system in seeking to control one of the world’s most influential Anglophone news organizations.

There is much, much more that could be said. I hope at least I have convinced you that you need to take a closer a look at what a critical geopolitical development you are leading the United Kingdom into.

If on reflection you still feel confident you are doing the right thing, I would be happy to invite you to a public discussion in a prominent forum. The Royal Institute of International Affairs in London might be appropriate or perhaps the Council on Foreign Relations in Washington. As an inducement for you to come forward (and as an earnest of my confidence in my analysis), I will be happy to make a donation of $10,000 to your favorite good cause.

All the best,

Eamonn

 
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64 Comments to "Nikkei's FT Takeover"
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  1. We have an inside view of relations between the Sony head office in Tokyo and the Sony Hollywood studio in LA because of recent hacked emails.

    The former CEO only mentioned interference by the head office once–on editing the assassination of Kim Jung. In an email, she mentions that the head office has otherwise been hands off.

    That is likely the relationship of Nikkei head office with FT. Tokyo will give FT autonomy within its fiefdom.

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    • Replies: @Eamonn Fingleton
    A reply to Tiger:

    The parallel you draw between Sony’s 1989 takeover of Columbia Pictures (now known as Sony Pictures) and Nikkei’s takeover of the FT is unfortunately false. Sony’s motive was not mind control but the more prosaic one of acquiring a software producer whose movies would be available to work with Sony’s hardware (previously Hollywood had sought to obstruct the Japanese video hardware industry). The gambit succeeded and Sony has been able to push forward with advances in hardware secure in the knowledge that it controls an abundant supply of in-house software to support its initiatives.
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  2. I fail to see what Japan is doing wrong other than pursuing its interests, as any sane country would do. Looks like Mr. Fingleton is just jealous of Japan’s success.
    And also it is very hyocritical to present the western media as “independent”. They are most of the time just a big eco chamber of warmongers in foreing policy and cultural marxist at home. That is the reason I read the Unz’s Review to start with.

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    • Replies: @Bill Jones
    The FT's foreign coverage is merely an echo of Chatham House ( A Rhodes institution) policies.
  3. So FT will no longer be following the cultural marxist/neoliberal party line? Japan had better get nukes fast.

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  4. At least the Japanese government is concerned to ensure the survival and prosperity of its own people. White people suffer under governments who hate them and wish to destroy them. Every time I hear the words Cameron or Blair I see a tapeworm crawling out of a pig’s rectum.

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    • Replies: @Borachio
    I cannot speak for Mr. Fingleton, but I believe his main point is this:

    Japan is successful because its people and institutions act not only for their individual good, but also for the good of the country. It is a balancing act between individualism and collectivism that Japan seems to handle quite well, even though no society can be perfect all the time in every way.

    The FT should take a page from Japan's book -- actually, it's our book, because the Japanese got it from Western civilization before we threw it in the trash. (Sadly, the Japanese are now adopting some of our multi-culturalist vices as well; one hopes they will survive anyway.)

    , @anon

    Every time I hear the words Cameron or Blair I see a tapeworm crawling out of a pig’s rectum.
     
    Interesting. My analogy is a cockroach crawling out of a dying plague rat's rectum.
  5. @Tiger
    We have an inside view of relations between the Sony head office in Tokyo and the Sony Hollywood studio in LA because of recent hacked emails.

    The former CEO only mentioned interference by the head office once--on editing the assassination of Kim Jung. In an email, she mentions that the head office has otherwise been hands off.

    That is likely the relationship of Nikkei head office with FT. Tokyo will give FT autonomy within its fiefdom.

    A reply to Tiger:

    The parallel you draw between Sony’s 1989 takeover of Columbia Pictures (now known as Sony Pictures) and Nikkei’s takeover of the FT is unfortunately false. Sony’s motive was not mind control but the more prosaic one of acquiring a software producer whose movies would be available to work with Sony’s hardware (previously Hollywood had sought to obstruct the Japanese video hardware industry). The gambit succeeded and Sony has been able to push forward with advances in hardware secure in the knowledge that it controls an abundant supply of in-house software to support its initiatives.

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    • Replies: @Hobbesian Meliorist
    Sony/Columbia was only half successful. Because they now owned so much content, the hardware part of the company found its hands tied: in the late 90s/early 2000s, it didn't support the MP3 format, instead concentrating on proprietary DRMed formats, because it didn't want to encourage piracy, but this played into the hands of Apple (among others, but especially Apple), and Sony hardware lost a huge market and a lot of its brand prestige.
  6. Thank you for taking on the ‘basket-case’, ‘two lost decades’ meme. Japanese cars still seem pretty good, and when I see, say, Japanese air-conditioning units being fitted at my UK employer, they must be doing something right (but don’t they have huge government debt, admittedly mostly owed to Mrs Watanabe?).

    (frankly I’m not too worried if the FT goes easy on Japan, as long as its coverage of the rest of the world is good. But I can see a former editor might be concerned)

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  7. Like many countries in the Orient Japan is a managed democracy, no doubt Lee Kwan Yew is popular there I would guess.

    I have been familiar with Eamonn’s work for a number of years and because of that I feel I have some sort of grasp on Japan, I feel that almost all Western commentators on Japan don’t know what they are talking about. On a GDP per capita basis Japan has kept on going despite the supposed lost decade(s). Of course Japan will be the first country to emerge from the demographic crunch and has avoided the stop gap solution (disaster) of mass immigration and I have read a few articles recently that the corner has even been turned in this regard. The public debt issue remains a concern though, no one should like taking the other side of the trade to Kyle Bass, but have heard explanations that imply that this can be manged (internally held and Japan owns substantial foreign assets). Either way a drop in commodity prices and restarting of the nuclear power plants should provide strong tailwinds for the Japanese economy.

    Unfortunately in Britain we remain a slave to the open economy ideology, when we should be more discriminating in regard to foreign takeovers. This is another foreign takeover that should have been queried. Still it will prove a poor purchase if concerns arise about the quality of coverage.

    On another note I am pleased to see another independent thinker who is well worth reading added to the roster.

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    • Replies: @tbraton
    "Like many countries in the Orient Japan is a managed democracy,"

    Yes, unlike the democracy practiced in the U.S., Great Britain, and the other Western countries.

    "Of course Japan will be the first country to emerge from the demographic crunch and has avoided the stop gap solution (disaster) of mass immigration and I have read a few articles recently that the corner has even been turned in this regard."

    You raise a very good point here. Japan's aging population problem was not only cited by the U.S. as a reason justifying insane levels of immigration into the U.S., but pressure was brought on Japan to liberalize their immigration laws to "solve" their aging population problem. Credit to Japan for resisting such pressure. The Japanese had labored for centuries to produce a relatively homogeneous population and were smart enough not to take the short-term solution which would have likely produced social tensions in the long run. I would point out that Japan has a current population of 128 million compared to roughly 35 million in 1870 in an area less than the size of California, so it is not lacking for people.
    , @anon

    no one should like taking the other side of the trade to Kyle Bass
     
    Bass was fooled by the blank slate demographics propaganda pushed out by the financial media for their banking mafia masters.

    A declining population of *intelligent* people that will eventually level out once they have more space per head is *massively* better than a rapidly growing population of *stupid* people.
  8. @22pp22
    At least the Japanese government is concerned to ensure the survival and prosperity of its own people. White people suffer under governments who hate them and wish to destroy them. Every time I hear the words Cameron or Blair I see a tapeworm crawling out of a pig's rectum.

    I cannot speak for Mr. Fingleton, but I believe his main point is this:

    Japan is successful because its people and institutions act not only for their individual good, but also for the good of the country. It is a balancing act between individualism and collectivism that Japan seems to handle quite well, even though no society can be perfect all the time in every way.

    The FT should take a page from Japan’s book — actually, it’s our book, because the Japanese got it from Western civilization before we threw it in the trash. (Sadly, the Japanese are now adopting some of our multi-culturalist vices as well; one hopes they will survive anyway.)

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  9. I have reason to think well of Japanese people but I toss into the mix of comments the implications of Japanese girls marrying non Japanese husbands by orders of magnitude more often than Japanese men marry foreigners – certainly foreigners of European descent. I know about 15 couples in which a Japanese wife is married to a white Australian male but not a single one in which a white Australian woman is married to a Japanese. My impression is that part of the reason is that some young Japanese women like the freedom from hidebound Japanese custom.

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    • Replies: @AndrewR
    Well, to be blunt, despite Japan's very macho history, Japanese men tend to be quite feminine these days. Men of European descent skew manlier thus Japanese women are unsurprisingly attracted to this.
  10. It’s refreshing to hear someone with authority puncture the hot-air rhetoric of Japan being on its last legs, a nation of unimaginative conformists incapable of genuine technological creativity, groaning under the burden of an aged population etc. How can this prognosis of imminent doom be true when the Japanese economy still runs huge trade surpluses? Evidently foreign consumers still value what Japan produces, which is more than can be said of the U.S. economy.

    Speaking of Japan’s capacity for strategic misdirection, I forget which, but one of Japan’s former prime ministers went so far as to compare Japan’s relations with the USA as being that of the docile, obedient wife to the manly American husband. Anyone who takes that at face value and truly believes that Japanese males will content themselves with a supportive, nurturing role to an arrogant, staggering, blundering United States is a complete fool. The Japanese are a proud, competent people and will never settle for taking a back seat to anyone, as studying their martial history will attest and they are quietly pursuing weapons research etc. as well as all the other tools of national sovereignty in spite of public protestations to the contrary.

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    • Replies: @AndrewR
    The war and occupation really did fundamentally change Japanese society and the Japanese mentality to a degree probably unprecedented in human history in such a short time span. Almost a lifetime later, pacifism still has a stronger hold over the Japanese than arguably any other people.
  11. I wouldn’t worry too much about Japan controlling western media. The Japanese have never been very good at “soft power.” How much has Japanese pop culture penetrated the West? Whereas they consume plenty of western media. How many Japanese celebrities are famous in the West versus how many western celebrities are famous in Japan?

    The Japanese purchase of Hollywood movie studios was a disaster for them. Panasonic lost billions and quickly exited. Sony stuck with it after losing a ton of money, but has it really helped them retain their consumer electronics dominance? Apple is now king of consumer electronics.

    Mr. Fingleton, I have a question regarding Japanese corporate hiring practices. I read in “Sony: A Private Life” that Sony had(has?) a penchant for hiring jews to run their US operations. Is this true for Japanese corporations in general?

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    • Replies: @LondonBob
    Maybe in their US operations but Loeb was told to take a hike by Sony when sought to join the board and the Lee family is squeezing out Singer at Samsung. East Asian business remains closed to outsiders.
  12. Anonymous says:     Show CommentNext New Comment

    Eamonn, this is a very interesting essay about Japan, but I don’t really see how it’s germane to the question of the FT’s independence. Can you spell out a little bit more why you think that the FT is going to lose editorial independence under Nikkei’s ownership, and what kind of form Nikkei’s meddling is likely to take?

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  13. And where was Nikkei on the “ comfort women” sex slavery issue? Nowhere, of course. The issue was first raised in the Dutch press, which focused on the brutalization of brave Dutch women captured in the early 1940s in the then Dutch East Indies. The Dutch women were the tip of an iceberg but their allegations inspired East Asian victims (principally Koreans) finally to find their voice in pressing for an apology and compensation. The Japanese press was eventually embarrassed into breaking its silence but only after the story had become a cause célèbre in the West.

    Where was New York Times on the rape of 2 million German women by the US – British ally, Stalin’s Russia?

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  14. In other words, they are a shining example of what a NRx nation can achieve.

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  15. The FT has led the global press in presenting Japan as a basket case…….In publicizing the basket-case story the FT has fallen for a characteristically brilliant Japanese propaganda initiative. Japanese officials see major advantages in pretending their nation is weak and dysfunctional. Certainly in the 1980s they learned the hard way that clear evidence of Japan’s success created a hornet’s nest of diplomatic problems. Most notably trade tensions with the United States became so explosive that a trade war seemed imminent.

    That’s a good reason for Japan to buy the FT. Paying a premium price for it rewards the previous owners of the FT for serving Japan’s cause, and owning it now ensures the FT will continue in the same path.

    The doom and gloom narrative about Japan never made much sense to me. Neither did the 1980s narrative about Japan replacing America as #1. After all, post-WWII Japan is a defeated nation with a very large American military presence.

    Ultimately the US-Japan alliance will prove to be as makeshift as any Russia-China alliance. Ditto for the US-South Korea alliance. Far from declining Japan is actually rising when it comes to hard power:

    http://www.dailymail.co.uk/sciencetech/article-3179045/The-Death-Star-weapon-Japan-just-fired-world-s-powerful-laser.html

    The Death Star weapon is here! Japan fires world’s most powerful laser

    If future wars are fought largely by robots and lasers Japan already has a head start…

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    • Replies: @tbraton
    "That’s a good reason for Japan to buy the FT. Paying a premium price for it rewards the previous owners of the FT for serving Japan’s cause, and owning it now ensures the FT will continue in the same path. "

    I seem to recall that the Japanese paid Ronald Reagan $2 million after he left office to deliver a couple of speeches. That didn't leave a good taste in mouth after I had voted for Reagan twice. The Clintons certainly did learn from Reagan's example and applied that example to reach new heights.
    , @Hippopotamusdrome


    The Death Star weapon is here! Japan fires world’s most powerful laser

     

    Omae no chichi wa washi da
  16. Thank you for the article, Mr. Fingleton, and I enjoyed reading your book “In the Jaws of the Dragon”. I’ve been interested in Japan since the 80s when they were world-beating (and made all the electronics that I so dearly wanted as a kid). I got the chance to visit for a couple of weeks recently, and just about everything I saw reinforced the fact that Japan is still a country on the rise. Clean, fast, efficient, well dressed. And polite. And the best engineering in the world in their trains and subways and tunnels. I left thinking that if the smart, practical people from my New England hometown ran a country, it would be like Japan.

    I’m not sure what to think of the rest of your thesis that they’re just biding their time to take over the world. I’m sure some are – there are power hungry people in every country. But if those are the ones in power, they’ve been awfully patient. Yes, they’ve structured a mercantilist system that subsidizes investment and their corporations. But we all get to enjoy the fruits of that in better products and technology. I only wish our country would subsidize real investment, instead of the banks and internet companies that are the main beneficiaries of our zero-percent rates.

    And as for the control of the FT for a Japanese company – well, it’s not much of a secret that a small group of people and companies control most of the U.S. and U.K. press. And the press already refuses to discuss immigration or trade issues. How much worse could it be? And for the ambitious with independent means of support, it’s never been easier to get your word out and attract a group of followers. Perhaps some of the better FT writers will consider that.

    Glad to see you posting here. Your writing is thought provoking.

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    • Replies: @Eamonn Fingleton
    A reply to Chief Seattle:

    You write: “I’m not sure what to think of the rest of your thesis that they’re [the Japanese] just biding their time to take over the world.” This misstates the argument in In the Jaws of the Dragon. The book is mainly about the Chinese challenge, not the Japanese one. Now that it is clear that the Chinese have mastered the Japanese approach to economics they can be expected, by virtue of their huge population (ten times Japan's), to become the world’s dominant economy in little more than a decade. That said, Japan will continue for many years to come to lead the world in the most advanced areas of manufacturing (which were abandoned by the United States in the move to outsourcing in the 1980s and 1990s).
    , @Wizard of Oz
    "I only wish our country would subsidise real investment instead of banks and internet companies which are the real beneficiaries of our zero interest rate policies".

    Could you spell that out please?
    1. You seem to approve of government or other public subsidies (perhaps though you don't say so to counter the mercantilism of countries like Japan)???
    2. You regard low interest rates as such a subsidy? And do they discriminate against or in favour of US business investors? Or are they neutral?
    3. This is my real puzzle. How do low interest rates (or any other "subsidy") causally benefit internet companies differentially - or banks for that matter since they need to be able to lend to profit....?

    The really unjustified subsidies are the politically motivated protections for sugar producers which threatens to prevent the TPP being ratified by Australia which provides no subsidies...

  17. @Chief Seattle
    Thank you for the article, Mr. Fingleton, and I enjoyed reading your book "In the Jaws of the Dragon". I've been interested in Japan since the 80s when they were world-beating (and made all the electronics that I so dearly wanted as a kid). I got the chance to visit for a couple of weeks recently, and just about everything I saw reinforced the fact that Japan is still a country on the rise. Clean, fast, efficient, well dressed. And polite. And the best engineering in the world in their trains and subways and tunnels. I left thinking that if the smart, practical people from my New England hometown ran a country, it would be like Japan.

    I'm not sure what to think of the rest of your thesis that they're just biding their time to take over the world. I'm sure some are - there are power hungry people in every country. But if those are the ones in power, they've been awfully patient. Yes, they've structured a mercantilist system that subsidizes investment and their corporations. But we all get to enjoy the fruits of that in better products and technology. I only wish our country would subsidize real investment, instead of the banks and internet companies that are the main beneficiaries of our zero-percent rates.

    And as for the control of the FT for a Japanese company - well, it's not much of a secret that a small group of people and companies control most of the U.S. and U.K. press. And the press already refuses to discuss immigration or trade issues. How much worse could it be? And for the ambitious with independent means of support, it's never been easier to get your word out and attract a group of followers. Perhaps some of the better FT writers will consider that.

    Glad to see you posting here. Your writing is thought provoking.

    A reply to Chief Seattle:

    You write: “I’m not sure what to think of the rest of your thesis that they’re [the Japanese] just biding their time to take over the world.” This misstates the argument in In the Jaws of the Dragon. The book is mainly about the Chinese challenge, not the Japanese one. Now that it is clear that the Chinese have mastered the Japanese approach to economics they can be expected, by virtue of their huge population (ten times Japan’s), to become the world’s dominant economy in little more than a decade. That said, Japan will continue for many years to come to lead the world in the most advanced areas of manufacturing (which were abandoned by the United States in the move to outsourcing in the 1980s and 1990s).

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  18. Has anyone updated these charts?

    http://www.zerohedge.com/news/2012-10-23/mushroom-cloudy-future-2016-japan-net-debt-capita-will-be-140000

    Pretty amazing.

    I (personally) know the Japanese are capable of some amazing things, but how they will get out from under this has still not been explained to me.

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    • Replies: @Eamonn Fingleton
    A reply to wren:

    In referring to the allegedly stratospheric of level Japan’s national debt, you write : “I (personally) know the Japanese are capable of some amazing things, but how they will get out from under this has still not been explained to me.”

    Elementary, dear Watson. The elite Japanese bureaucracy has been generally misstating the facts since the mid-nineteenth century. Mostly the intent has been to get Americans to underestimate Japan. The extent of the bureaucracy’s disingenuousness, and sometimes outright mendacity, can be gauged from the number of times Japan pledged to open its markets and then did the opposite. The real size of the Japanese government’s indebtedness is grossly overstated because Westerners don’t understand that most of the debt is owned by government-owned entities.

    If Japan's government debt was remotely as high as is generally believed abroad, Japanese interest rates would be higher than Greece's. In reality they are lower even than in the United Kingdom at the height of British financial power in the late nineteenth century.
  19. japan inc is hardly the only powerful entity that manipulates the american public via propaganda…the american public is also manipulated by the coalition of american big business/govt/media….multiculturalism and white race guilt are the object of such manipulation….by using white race guilt propaganda and anti-white multiculturalism, CorpGovMedia obtains growth via mass immigration into america…

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  20. @wren
    Has anyone updated these charts?

    http://www.zerohedge.com/news/2012-10-23/mushroom-cloudy-future-2016-japan-net-debt-capita-will-be-140000

    Pretty amazing.

    I (personally) know the Japanese are capable of some amazing things, but how they will get out from under this has still not been explained to me.

    A reply to wren:

    In referring to the allegedly stratospheric of level Japan’s national debt, you write : “I (personally) know the Japanese are capable of some amazing things, but how they will get out from under this has still not been explained to me.”

    Elementary, dear Watson. The elite Japanese bureaucracy has been generally misstating the facts since the mid-nineteenth century. Mostly the intent has been to get Americans to underestimate Japan. The extent of the bureaucracy’s disingenuousness, and sometimes outright mendacity, can be gauged from the number of times Japan pledged to open its markets and then did the opposite. The real size of the Japanese government’s indebtedness is grossly overstated because Westerners don’t understand that most of the debt is owned by government-owned entities.

    If Japan’s government debt was remotely as high as is generally believed abroad, Japanese interest rates would be higher than Greece’s. In reality they are lower even than in the United Kingdom at the height of British financial power in the late nineteenth century.

    Read More
    • Replies: @Borachio
    The bottom line is that the Japanese are loyal to their country and to their people, as they should be.

    It's only in the decadent and disintegrating West that we regard such loyalty as a vice. That's partly a cause and partly an effect of our disintegration.

    If we were loyal to our countries and to our people, then we'd give both the Japanese and the Chinese a good (competitive) fight. Most likely, everyone would benefit. Sadly, it is not to be:

    '"In German, or in English, I know how to count down. And I'm learning Chinese," says Werner von Braun.' -- Tom Lehrer
     
  21. @LondonBob
    Like many countries in the Orient Japan is a managed democracy, no doubt Lee Kwan Yew is popular there I would guess.

    I have been familiar with Eamonn's work for a number of years and because of that I feel I have some sort of grasp on Japan, I feel that almost all Western commentators on Japan don't know what they are talking about. On a GDP per capita basis Japan has kept on going despite the supposed lost decade(s). Of course Japan will be the first country to emerge from the demographic crunch and has avoided the stop gap solution (disaster) of mass immigration and I have read a few articles recently that the corner has even been turned in this regard. The public debt issue remains a concern though, no one should like taking the other side of the trade to Kyle Bass, but have heard explanations that imply that this can be manged (internally held and Japan owns substantial foreign assets). Either way a drop in commodity prices and restarting of the nuclear power plants should provide strong tailwinds for the Japanese economy.

    Unfortunately in Britain we remain a slave to the open economy ideology, when we should be more discriminating in regard to foreign takeovers. This is another foreign takeover that should have been queried. Still it will prove a poor purchase if concerns arise about the quality of coverage.

    On another note I am pleased to see another independent thinker who is well worth reading added to the roster.

    “Like many countries in the Orient Japan is a managed democracy,”

    Yes, unlike the democracy practiced in the U.S., Great Britain, and the other Western countries.

    “Of course Japan will be the first country to emerge from the demographic crunch and has avoided the stop gap solution (disaster) of mass immigration and I have read a few articles recently that the corner has even been turned in this regard.”

    You raise a very good point here. Japan’s aging population problem was not only cited by the U.S. as a reason justifying insane levels of immigration into the U.S., but pressure was brought on Japan to liberalize their immigration laws to “solve” their aging population problem. Credit to Japan for resisting such pressure. The Japanese had labored for centuries to produce a relatively homogeneous population and were smart enough not to take the short-term solution which would have likely produced social tensions in the long run. I would point out that Japan has a current population of 128 million compared to roughly 35 million in 1870 in an area less than the size of California, so it is not lacking for people.

    Read More
    • Replies: @Bill Jones
    It's also no coincidence that Japan is such a leader in Robotics, a workforce for whom pension and healthcare liabilities are somewhat more easily managed than those of immigrant Mexicans.
  22. @Bliss

    The FT has led the global press in presenting Japan as a basket case.......In publicizing the basket-case story the FT has fallen for a characteristically brilliant Japanese propaganda initiative. Japanese officials see major advantages in pretending their nation is weak and dysfunctional. Certainly in the 1980s they learned the hard way that clear evidence of Japan’s success created a hornet’s nest of diplomatic problems. Most notably trade tensions with the United States became so explosive that a trade war seemed imminent.
     
    That's a good reason for Japan to buy the FT. Paying a premium price for it rewards the previous owners of the FT for serving Japan's cause, and owning it now ensures the FT will continue in the same path.

    The doom and gloom narrative about Japan never made much sense to me. Neither did the 1980s narrative about Japan replacing America as #1. After all, post-WWII Japan is a defeated nation with a very large American military presence.

    Ultimately the US-Japan alliance will prove to be as makeshift as any Russia-China alliance. Ditto for the US-South Korea alliance. Far from declining Japan is actually rising when it comes to hard power:

    http://www.dailymail.co.uk/sciencetech/article-3179045/The-Death-Star-weapon-Japan-just-fired-world-s-powerful-laser.html

    The Death Star weapon is here! Japan fires world's most powerful laser

    If future wars are fought largely by robots and lasers Japan already has a head start...

    “That’s a good reason for Japan to buy the FT. Paying a premium price for it rewards the previous owners of the FT for serving Japan’s cause, and owning it now ensures the FT will continue in the same path. ”

    I seem to recall that the Japanese paid Ronald Reagan $2 million after he left office to deliver a couple of speeches. That didn’t leave a good taste in mouth after I had voted for Reagan twice. The Clintons certainly did learn from Reagan’s example and applied that example to reach new heights.

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  23. “Japanese editors quietly rejoice in a role as principal apologists for the Japanese establishment, and in particular for an all-powerful, if virtually invisible, higher bureaucracy.”

    I can’t speak for the British press, but this sounds exactly like the US LSM which are nothing more than mouthpieces for the DNC and the federal mafia.

    “where was Nikkei on the “ comfort women” sex slavery issue? Nowhere, of course. The issue was first raised in the Dutch press…”

    And again the US LSM self censors and ignores stories that go against their ideology or may damage their masters, such as the Goznell trial and the current murder for organ harvesting scandals at Planned Parenthood.

    And FT has never been as good as the author seems to think unless you want to read the constant drudge of leftist politics and finance from a socialist rag.

    So, same ‘ol, same ‘ol.

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  24. @Eamonn Fingleton
    A reply to wren:

    In referring to the allegedly stratospheric of level Japan’s national debt, you write : “I (personally) know the Japanese are capable of some amazing things, but how they will get out from under this has still not been explained to me.”

    Elementary, dear Watson. The elite Japanese bureaucracy has been generally misstating the facts since the mid-nineteenth century. Mostly the intent has been to get Americans to underestimate Japan. The extent of the bureaucracy’s disingenuousness, and sometimes outright mendacity, can be gauged from the number of times Japan pledged to open its markets and then did the opposite. The real size of the Japanese government’s indebtedness is grossly overstated because Westerners don’t understand that most of the debt is owned by government-owned entities.

    If Japan's government debt was remotely as high as is generally believed abroad, Japanese interest rates would be higher than Greece's. In reality they are lower even than in the United Kingdom at the height of British financial power in the late nineteenth century.

    The bottom line is that the Japanese are loyal to their country and to their people, as they should be.

    It’s only in the decadent and disintegrating West that we regard such loyalty as a vice. That’s partly a cause and partly an effect of our disintegration.

    If we were loyal to our countries and to our people, then we’d give both the Japanese and the Chinese a good (competitive) fight. Most likely, everyone would benefit. Sadly, it is not to be:

    ‘”In German, or in English, I know how to count down. And I’m learning Chinese,” says Werner von Braun.’ — Tom Lehrer

    Read More
    • Replies: @Wizard of Oz
    Who do you regard as "your people". Do the people who build lives round the product of the Ivy League dating services or the higher grade lot who have extended their acquaintance to the wider world of the rich and educated even think of most of their fellow citizens (or even the descendants of 1960ish citizens) as their people?

    Think the medieval and Rennaissance world of small international elites who had a common language or just wealth to be preserved in marriage. Think 19th century indeed.
  25. Panda’s take:

    Since the most powerful media tools, being newspapers, TV channels, etc., of Japan have all become directly controlled by the current Abe Govenment since the last several years, the purchase of FT by the Abe Govenment (Nikkei? the one who believes it’s Nikkei needs to be sent to a decent clinic for a brain check. ROFL) aims at taking this major tool of global media mouthpiece directly( but in a covert manner) under Japanese govenement control, in order to gather UK and European support, both financially and geopolitically, including those who either knowingly act so or volunterringly act so as useful idiots like always, to challenge the re-emmergence of the Middle Kingdom as the predominant power of the Far East.

    So the essense of the deal is that :

    smart Abe pays $1.3 billion, a peanut, to strategically and partially secretly highjack a significant influences from low(er) IQ Britons and Europeans acting as a cannon fodder of Japan and being thrown into the forefront of “the 1st Major Fight of 21st century” (potentially could be both a cold war and a hot war):

    The Middle Kingdom Vs Japan(+US) in the Asia Pacific.

    Now the brainless European sheeple (most, not all) should know what you are getting into. Be warned!

    Read More
    • Replies: @Eamonn Fingleton
    A reply to Panda@War:

    Forgive me for pointing out that there are multiple misconceptions in your comment. Most obviously, the Nikkei takeover is nothing to Prime Minister Shinzo Abe. Irrespective of what you may read in your newspaper, elected representatives like Abe have no independent power. Like everyone else in Japan, they are subordinate to the elite bureaucracy, and particularly to top officials of the Ministry of Finance, and it is these latter that undoubtedly moved this deal along.

  26. “$1.3 billion, a peanut,”

    Consider that the lion share of which is FT’s intrinsic economic value anyway, the “premium” paid is such a “peanut” that is perhaps not that much different from the $ cost of taking the entire the FT staff to Japan for a 3-week vacation with 5-star hotel and business class tickets paid…in exchange for owning you for life.

    Peanut“? Panda was way too generous.

    The prominent bankers in the City and FT are still gathering their brightest M&A analysts and due-diligence accountants calculating some “premium” as we speak before throwing some celebrating champaigne parties in the evening alongwith the shareholders… Abe would be bursting into laughters in his dreams, incapable of comprehending his sheer luck with this bunch of low IQers. LMAO

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  27. @PandaAtWar
    Panda's take:

    Since the most powerful media tools, being newspapers, TV channels, etc., of Japan have all become directly controlled by the current Abe Govenment since the last several years, the purchase of FT by the Abe Govenment (Nikkei? the one who believes it's Nikkei needs to be sent to a decent clinic for a brain check. ROFL) aims at taking this major tool of global media mouthpiece directly( but in a covert manner) under Japanese govenement control, in order to gather UK and European support, both financially and geopolitically, including those who either knowingly act so or volunterringly act so as useful idiots like always, to challenge the re-emmergence of the Middle Kingdom as the predominant power of the Far East.

    So the essense of the deal is that :

    smart Abe pays $1.3 billion, a peanut, to strategically and partially secretly highjack a significant influences from low(er) IQ Britons and Europeans acting as a cannon fodder of Japan and being thrown into the forefront of "the 1st Major Fight of 21st century" (potentially could be both a cold war and a hot war):

    The Middle Kingdom Vs Japan(+US) in the Asia Pacific.

    Now the brainless European sheeple (most, not all) should know what you are getting into. Be warned!

    A reply to Panda@War:

    Forgive me for pointing out that there are multiple misconceptions in your comment. Most obviously, the Nikkei takeover is nothing to Prime Minister Shinzo Abe. Irrespective of what you may read in your newspaper, elected representatives like Abe have no independent power. Like everyone else in Japan, they are subordinate to the elite bureaucracy, and particularly to top officials of the Ministry of Finance, and it is these latter that undoubtedly moved this deal along.

    Read More
    • Replies: @PandaAtWar
    Dear Eammon:

    The newspapers and essays that Panda reads cover multiple native languages from both the West and the East. With all the respect despite of living in Japan for such a long time (Panda assume you can speak and write Japanese fluently?) - no question here that everyone subordinate to the elite bureaucracy (as imperial China told them so for 1,000s of years and how dare they say no? lol)- but are you absolutely sure that :

    1. "everyone in Japan, Abe included, subordinate to top officials of the Ministry of Finance, that undoubtedly moved this deal along" , and alone?

    (-- Panda's impression is that top officials of the Minitry of Finance are nothing more than some low class stooge (even much lower than the statue of Abe family) who subordinate like running dogs to the families of Japan's industrial, and financial to a lesser degree, conglomerates. With that in mind, the hidden question here is that do you know what Japanese industrial conglomerates want to achieve for the next 10-20 years? )

    2. if the answer of 1 also includes a 3rd party, what if Minstry of Finance and the said 3rd party, "by coincidence", share the same goal this time apart from the straightforward simple matter of finance?

    (-- Right, Panda meant that you might have drastically underestimated the Japanese, Eamonn. )

    Knowing the Japanese by civilising them little by little in almost all aspects for 1,000s of years, the Han people such as Panda are not THAT naïve to be easily fooled around though. ROFL

  28. @EAMONN FINGLETON

    If you by chance to have this discussion with Barber, don’t hold your breath for it if Panda were you, in an open forum of The Royal Institute of International Affairs in London, would you kindly send Panda an invitation email (as audience) as well if it doesn’t bother you too much? Thanks in advance.

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  29. @Eamonn Fingleton
    A reply to Panda@War:

    Forgive me for pointing out that there are multiple misconceptions in your comment. Most obviously, the Nikkei takeover is nothing to Prime Minister Shinzo Abe. Irrespective of what you may read in your newspaper, elected representatives like Abe have no independent power. Like everyone else in Japan, they are subordinate to the elite bureaucracy, and particularly to top officials of the Ministry of Finance, and it is these latter that undoubtedly moved this deal along.

    Dear Eammon:

    The newspapers and essays that Panda reads cover multiple native languages from both the West and the East. With all the respect despite of living in Japan for such a long time (Panda assume you can speak and write Japanese fluently?) – no question here that everyone subordinate to the elite bureaucracy (as imperial China told them so for 1,000s of years and how dare they say no? lol)- but are you absolutely sure that :

    1. “everyone in Japan, Abe included, subordinate to top officials of the Ministry of Finance, that undoubtedly moved this deal along” , and alone?

    (– Panda’s impression is that top officials of the Minitry of Finance are nothing more than some low class stooge (even much lower than the statue of Abe family) who subordinate like running dogs to the families of Japan’s industrial, and financial to a lesser degree, conglomerates. With that in mind, the hidden question here is that do you know what Japanese industrial conglomerates want to achieve for the next 10-20 years? )

    2. if the answer of 1 also includes a 3rd party, what if Minstry of Finance and the said 3rd party, “by coincidence”, share the same goal this time apart from the straightforward simple matter of finance?

    (– Right, Panda meant that you might have drastically underestimated the Japanese, Eamonn. )

    Knowing the Japanese by civilising them little by little in almost all aspects for 1,000s of years, the Han people such as Panda are not THAT naïve to be easily fooled around though. ROFL

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  30. Japan’s demographic profile is a triumph in another way in that it stems from remarkable progress in healthcare. Average life expectancy has increased more than 20 years since the late 1940s – and given that the Japanese have been eating more McDonald’s hamburgers lately, diet is not the explanation. Rather the Japanese healthcare system, one of the world’s most efficient, excels particularly in early diagnosis of diseases that if not caught in time claim lives.

    Perhaps the most compelling single statistic is that just since 1989 alone, average life expectancy at birth has increased by 5.9 years – to 84.7 years from 78.8 years. This means the Japanese now typically live 4.3 years longer than Britons and 5.0 years longer than Americans.

    But asian-americans served by the same healthcare system as white americans live 7.6 years longer than the latter. Even latinos in the US live 3.9 years longer than whites:

    http://kff.org/other/state-indicator/life-expectancy-by-re/

    On the other hand white-americans live 4.3 years longer than black-americans. Which could lead to some proud chest-thumping among the majority of commenters here….

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    • Replies: @Wizard of Oz
    Despite rising obesity Australia's life expectancy is pretty close to Japan's. Explanation? I don't know but our low life expectancy indigenous population is about the same percentage as Jews in America - nothing like the 13 per cent African-American. Nor is health care for poor whites a financial problem in Australia and the decline in smoking started earlier....
    , @Bliss

    asian-americans served by the same healthcare system as white americans live 7.6 years longer than the latter. Even latinos in the US live 3.9 years longer than whites:

    http://kff.org/other/state-indicator/life-expectancy-by-re/
     
    And in today's news:

    http://atlanta.cbslocal.com/2015/08/12/study-genetic-makeup-leading-factor-in-why-smarter-people-live-longer/

    The reason why intelligent people tend to live longer is primarily due to an individual’s genes, according to new research. Researchers found that about 95 percent of the link between intelligence and longevity can be explained by genetic influences on both traits, as reported by LiveScience.


    So based on the above, mestizos should be more intelligent than whites?
  31. @Chief Seattle
    Thank you for the article, Mr. Fingleton, and I enjoyed reading your book "In the Jaws of the Dragon". I've been interested in Japan since the 80s when they were world-beating (and made all the electronics that I so dearly wanted as a kid). I got the chance to visit for a couple of weeks recently, and just about everything I saw reinforced the fact that Japan is still a country on the rise. Clean, fast, efficient, well dressed. And polite. And the best engineering in the world in their trains and subways and tunnels. I left thinking that if the smart, practical people from my New England hometown ran a country, it would be like Japan.

    I'm not sure what to think of the rest of your thesis that they're just biding their time to take over the world. I'm sure some are - there are power hungry people in every country. But if those are the ones in power, they've been awfully patient. Yes, they've structured a mercantilist system that subsidizes investment and their corporations. But we all get to enjoy the fruits of that in better products and technology. I only wish our country would subsidize real investment, instead of the banks and internet companies that are the main beneficiaries of our zero-percent rates.

    And as for the control of the FT for a Japanese company - well, it's not much of a secret that a small group of people and companies control most of the U.S. and U.K. press. And the press already refuses to discuss immigration or trade issues. How much worse could it be? And for the ambitious with independent means of support, it's never been easier to get your word out and attract a group of followers. Perhaps some of the better FT writers will consider that.

    Glad to see you posting here. Your writing is thought provoking.

    “I only wish our country would subsidise real investment instead of banks and internet companies which are the real beneficiaries of our zero interest rate policies”.

    Could you spell that out please?
    1. You seem to approve of government or other public subsidies (perhaps though you don’t say so to counter the mercantilism of countries like Japan)???
    2. You regard low interest rates as such a subsidy? And do they discriminate against or in favour of US business investors? Or are they neutral?
    3. This is my real puzzle. How do low interest rates (or any other “subsidy”) causally benefit internet companies differentially – or banks for that matter since they need to be able to lend to profit….?

    The really unjustified subsidies are the politically motivated protections for sugar producers which threatens to prevent the TPP being ratified by Australia which provides no subsidies…

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    • Replies: @Chief Seattle
    The big banks benefit from zero interest policies because they can borrow at zero percent and no one else can. So they borrow on a short term basis, lend at a higher rate on a longer term basis, and make sure that rates don't go up, because if they do, then the banks would start losing money as fast as they make it now.

    The internet companies, and any fast growing enterprise like Chipoltle benefit from zero interest because 1. savers cannot earn a return at a bank or by buying bonds so are forced into the market. 2. large companies can borrow at very low rates, so can buy back their stock instead of paying dividends. So savers are forced into the market, and dividends are low. The only thing left is speculation. So wild gyrations as growth company valuations far exceed any expected return. And venture capital dumped into me-too companies on the chance that those companies will either go IPO or be bought by a public company flush with cheap cash and high-valued stock.

    "You seem to approve of public subsidies..." - well, the federal government spends 25 cents of every GDP dollar, and we don't get a whole lot for it. I'd rather they subsidized science and transport than military bases and mortgage backed securities.

    "You regard low interest rates as such a subsidy? " - more of a distortion. The price of assets that can be borrowed against is inversely proportional to the interest rate. Say the average family can afford a $2000 mortgage. If rates are 4% then they can afford a $500K house. If rates are 10% then they can only afford a $200K house (rough numbers). In a market where new supply is constrained (due to lack of land or zoning) then lower rates mean higher house prices. Which means that old people and people with assets benefit. And young people or those without assets lose, because they have to pay more to buy in. It also causes asset bubbles like I said above, because savers are forced to buy assets to get a return - even if they believe those assets are over priced, they cannot afford to earn 1% on their money.

    "The really unjustified subsidies are the politically motivated protections for sugar producers..." - True. But mice nuts compared to the trillions in interest rate subsidies.
  32. @Bliss

    Japan’s demographic profile is a triumph in another way in that it stems from remarkable progress in healthcare. Average life expectancy has increased more than 20 years since the late 1940s – and given that the Japanese have been eating more McDonald’s hamburgers lately, diet is not the explanation. Rather the Japanese healthcare system, one of the world’s most efficient, excels particularly in early diagnosis of diseases that if not caught in time claim lives.

    Perhaps the most compelling single statistic is that just since 1989 alone, average life expectancy at birth has increased by 5.9 years – to 84.7 years from 78.8 years. This means the Japanese now typically live 4.3 years longer than Britons and 5.0 years longer than Americans.
     
    But asian-americans served by the same healthcare system as white americans live 7.6 years longer than the latter. Even latinos in the US live 3.9 years longer than whites:

    http://kff.org/other/state-indicator/life-expectancy-by-re/


    On the other hand white-americans live 4.3 years longer than black-americans. Which could lead to some proud chest-thumping among the majority of commenters here....

    Despite rising obesity Australia’s life expectancy is pretty close to Japan’s. Explanation? I don’t know but our low life expectancy indigenous population is about the same percentage as Jews in America – nothing like the 13 per cent African-American. Nor is health care for poor whites a financial problem in Australia and the decline in smoking started earlier….

    Read More
  33. @Borachio
    The bottom line is that the Japanese are loyal to their country and to their people, as they should be.

    It's only in the decadent and disintegrating West that we regard such loyalty as a vice. That's partly a cause and partly an effect of our disintegration.

    If we were loyal to our countries and to our people, then we'd give both the Japanese and the Chinese a good (competitive) fight. Most likely, everyone would benefit. Sadly, it is not to be:

    '"In German, or in English, I know how to count down. And I'm learning Chinese," says Werner von Braun.' -- Tom Lehrer
     

    Who do you regard as “your people”. Do the people who build lives round the product of the Ivy League dating services or the higher grade lot who have extended their acquaintance to the wider world of the rich and educated even think of most of their fellow citizens (or even the descendants of 1960ish citizens) as their people?

    Think the medieval and Rennaissance world of small international elites who had a common language or just wealth to be preserved in marriage. Think 19th century indeed.

    Read More
  34. @Wizard of Oz
    "I only wish our country would subsidise real investment instead of banks and internet companies which are the real beneficiaries of our zero interest rate policies".

    Could you spell that out please?
    1. You seem to approve of government or other public subsidies (perhaps though you don't say so to counter the mercantilism of countries like Japan)???
    2. You regard low interest rates as such a subsidy? And do they discriminate against or in favour of US business investors? Or are they neutral?
    3. This is my real puzzle. How do low interest rates (or any other "subsidy") causally benefit internet companies differentially - or banks for that matter since they need to be able to lend to profit....?

    The really unjustified subsidies are the politically motivated protections for sugar producers which threatens to prevent the TPP being ratified by Australia which provides no subsidies...

    The big banks benefit from zero interest policies because they can borrow at zero percent and no one else can. So they borrow on a short term basis, lend at a higher rate on a longer term basis, and make sure that rates don’t go up, because if they do, then the banks would start losing money as fast as they make it now.

    The internet companies, and any fast growing enterprise like Chipoltle benefit from zero interest because 1. savers cannot earn a return at a bank or by buying bonds so are forced into the market. 2. large companies can borrow at very low rates, so can buy back their stock instead of paying dividends. So savers are forced into the market, and dividends are low. The only thing left is speculation. So wild gyrations as growth company valuations far exceed any expected return. And venture capital dumped into me-too companies on the chance that those companies will either go IPO or be bought by a public company flush with cheap cash and high-valued stock.

    “You seem to approve of public subsidies…” – well, the federal government spends 25 cents of every GDP dollar, and we don’t get a whole lot for it. I’d rather they subsidized science and transport than military bases and mortgage backed securities.

    “You regard low interest rates as such a subsidy? ” – more of a distortion. The price of assets that can be borrowed against is inversely proportional to the interest rate. Say the average family can afford a $2000 mortgage. If rates are 4% then they can afford a $500K house. If rates are 10% then they can only afford a $200K house (rough numbers). In a market where new supply is constrained (due to lack of land or zoning) then lower rates mean higher house prices. Which means that old people and people with assets benefit. And young people or those without assets lose, because they have to pay more to buy in. It also causes asset bubbles like I said above, because savers are forced to buy assets to get a return – even if they believe those assets are over priced, they cannot afford to earn 1% on their money.

    “The really unjustified subsidies are the politically motivated protections for sugar producers…” – True. But mice nuts compared to the trillions in interest rate subsidies.

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    • Replies: @Wizard of Oz
    I almost clicked on "Agree" for the first time but that would be open on the UR to being called both rash and softheaded. But thank you for your courteous and lucid reply. I think I do agree. Certainly you are right about the sugar (and now I see Canadian dairy) protection holding up the TPP being relatively insignificant. And, while not in favour of governments in developed countries picking winners I don't dissent from your preference for subsidies to science and transport though I suspect that the need for the latter is a function of boneheaded resistance to financing new and repaired infrastructure with long term low interest debt, and not just in the US. (I suppose some of the stories about unproductive Japanese infrastructure spending in the 90s have supportrd these misguided positions). And yes, even if it was a bit provocative to refer to the consequences of very low interest rates as subsidies, the point is not so contentious. Still, the favour to the banks, which are now being forced to hold more capital has been part of their recovery from the 2007-2010 financial crisis - farcical but still necessary for too big to fail collections of greedy bureaucrats pretending to be something gloriously creative - and is with luck restoring them to a more traditional constructive place in the economy..... And it may be hard on elderly savers to receive practically nothing in interest but isn't the consequential flow of money into speculative investments that you point to a "subsidy" with some analogy to subsidies to science - and directed with at least as much flair as could be expected of government employees?
  35. @DH
    I fail to see what Japan is doing wrong other than pursuing its interests, as any sane country would do. Looks like Mr. Fingleton is just jealous of Japan's success.
    And also it is very hyocritical to present the western media as "independent". They are most of the time just a big eco chamber of warmongers in foreing policy and cultural marxist at home. That is the reason I read the Unz's Review to start with.

    The FT’s foreign coverage is merely an echo of Chatham House ( A Rhodes institution) policies.

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  36. @tbraton
    "Like many countries in the Orient Japan is a managed democracy,"

    Yes, unlike the democracy practiced in the U.S., Great Britain, and the other Western countries.

    "Of course Japan will be the first country to emerge from the demographic crunch and has avoided the stop gap solution (disaster) of mass immigration and I have read a few articles recently that the corner has even been turned in this regard."

    You raise a very good point here. Japan's aging population problem was not only cited by the U.S. as a reason justifying insane levels of immigration into the U.S., but pressure was brought on Japan to liberalize their immigration laws to "solve" their aging population problem. Credit to Japan for resisting such pressure. The Japanese had labored for centuries to produce a relatively homogeneous population and were smart enough not to take the short-term solution which would have likely produced social tensions in the long run. I would point out that Japan has a current population of 128 million compared to roughly 35 million in 1870 in an area less than the size of California, so it is not lacking for people.

    It’s also no coincidence that Japan is such a leader in Robotics, a workforce for whom pension and healthcare liabilities are somewhat more easily managed than those of immigrant Mexicans.

    Read More
    • Agree: Wizard of Oz
    • Replies: @tbraton
    That is the classic response to when there is a labor shortage or the cost of labor becomes too high. You don't open the floodgates to immigration and threaten the ethnic makeup of your population. Good for the Japanese acting sensibly in their interests.
  37. @Chief Seattle
    The big banks benefit from zero interest policies because they can borrow at zero percent and no one else can. So they borrow on a short term basis, lend at a higher rate on a longer term basis, and make sure that rates don't go up, because if they do, then the banks would start losing money as fast as they make it now.

    The internet companies, and any fast growing enterprise like Chipoltle benefit from zero interest because 1. savers cannot earn a return at a bank or by buying bonds so are forced into the market. 2. large companies can borrow at very low rates, so can buy back their stock instead of paying dividends. So savers are forced into the market, and dividends are low. The only thing left is speculation. So wild gyrations as growth company valuations far exceed any expected return. And venture capital dumped into me-too companies on the chance that those companies will either go IPO or be bought by a public company flush with cheap cash and high-valued stock.

    "You seem to approve of public subsidies..." - well, the federal government spends 25 cents of every GDP dollar, and we don't get a whole lot for it. I'd rather they subsidized science and transport than military bases and mortgage backed securities.

    "You regard low interest rates as such a subsidy? " - more of a distortion. The price of assets that can be borrowed against is inversely proportional to the interest rate. Say the average family can afford a $2000 mortgage. If rates are 4% then they can afford a $500K house. If rates are 10% then they can only afford a $200K house (rough numbers). In a market where new supply is constrained (due to lack of land or zoning) then lower rates mean higher house prices. Which means that old people and people with assets benefit. And young people or those without assets lose, because they have to pay more to buy in. It also causes asset bubbles like I said above, because savers are forced to buy assets to get a return - even if they believe those assets are over priced, they cannot afford to earn 1% on their money.

    "The really unjustified subsidies are the politically motivated protections for sugar producers..." - True. But mice nuts compared to the trillions in interest rate subsidies.

    I almost clicked on “Agree” for the first time but that would be open on the UR to being called both rash and softheaded. But thank you for your courteous and lucid reply. I think I do agree. Certainly you are right about the sugar (and now I see Canadian dairy) protection holding up the TPP being relatively insignificant. And, while not in favour of governments in developed countries picking winners I don’t dissent from your preference for subsidies to science and transport though I suspect that the need for the latter is a function of boneheaded resistance to financing new and repaired infrastructure with long term low interest debt, and not just in the US. (I suppose some of the stories about unproductive Japanese infrastructure spending in the 90s have supportrd these misguided positions). And yes, even if it was a bit provocative to refer to the consequences of very low interest rates as subsidies, the point is not so contentious. Still, the favour to the banks, which are now being forced to hold more capital has been part of their recovery from the 2007-2010 financial crisis – farcical but still necessary for too big to fail collections of greedy bureaucrats pretending to be something gloriously creative – and is with luck restoring them to a more traditional constructive place in the economy….. And it may be hard on elderly savers to receive practically nothing in interest but isn’t the consequential flow of money into speculative investments that you point to a “subsidy” with some analogy to subsidies to science – and directed with at least as much flair as could be expected of government employees?

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  38. @Bill Jones
    It's also no coincidence that Japan is such a leader in Robotics, a workforce for whom pension and healthcare liabilities are somewhat more easily managed than those of immigrant Mexicans.

    That is the classic response to when there is a labor shortage or the cost of labor becomes too high. You don’t open the floodgates to immigration and threaten the ethnic makeup of your population. Good for the Japanese acting sensibly in their interests.

    Read More
  39. @Eamonn Fingleton
    A reply to Tiger:

    The parallel you draw between Sony’s 1989 takeover of Columbia Pictures (now known as Sony Pictures) and Nikkei’s takeover of the FT is unfortunately false. Sony’s motive was not mind control but the more prosaic one of acquiring a software producer whose movies would be available to work with Sony’s hardware (previously Hollywood had sought to obstruct the Japanese video hardware industry). The gambit succeeded and Sony has been able to push forward with advances in hardware secure in the knowledge that it controls an abundant supply of in-house software to support its initiatives.

    Sony/Columbia was only half successful. Because they now owned so much content, the hardware part of the company found its hands tied: in the late 90s/early 2000s, it didn’t support the MP3 format, instead concentrating on proprietary DRMed formats, because it didn’t want to encourage piracy, but this played into the hands of Apple (among others, but especially Apple), and Sony hardware lost a huge market and a lot of its brand prestige.

    Read More
    • Replies: @Eamonn Fingleton
    A reply to Hobbesian Meliorist:


    You write: "Sony/Columbia was only half successful."

    Au contraire. The deal achieved what Sony expected it to do: break the back of Hollywood's efforts to resist Japan's rise in video hardware. As for Apple, its most advanced components and materials are made in Japan. Can you think of anything significant in Apple's hardware that is US-made?
  40. @Hobbesian Meliorist
    Sony/Columbia was only half successful. Because they now owned so much content, the hardware part of the company found its hands tied: in the late 90s/early 2000s, it didn't support the MP3 format, instead concentrating on proprietary DRMed formats, because it didn't want to encourage piracy, but this played into the hands of Apple (among others, but especially Apple), and Sony hardware lost a huge market and a lot of its brand prestige.

    A reply to Hobbesian Meliorist:

    You write: “Sony/Columbia was only half successful.”

    Au contraire. The deal achieved what Sony expected it to do: break the back of Hollywood’s efforts to resist Japan’s rise in video hardware. As for Apple, its most advanced components and materials are made in Japan. Can you think of anything significant in Apple’s hardware that is US-made?

    Read More
    • Replies: @Bliss

    As for Apple, its most advanced components and materials are made in Japan.
     
    False. The most advanced component in Apple's best selling (by far) product, the iphone, is it's brains: the SoC. It is designed in California and manufactured in South Korea and Taiwan, by Samsung and TMSC respectively.

    Btw, it seems to me that the industrial powerhouses South Korea and Taiwan could be seen as proteges of Japan since they were once colonized by Japan and must have benefited from the japanese educational system's emphasis on engineering and manufacturing.
  41. @Eamonn Fingleton
    A reply to Hobbesian Meliorist:


    You write: "Sony/Columbia was only half successful."

    Au contraire. The deal achieved what Sony expected it to do: break the back of Hollywood's efforts to resist Japan's rise in video hardware. As for Apple, its most advanced components and materials are made in Japan. Can you think of anything significant in Apple's hardware that is US-made?

    As for Apple, its most advanced components and materials are made in Japan.

    False. The most advanced component in Apple’s best selling (by far) product, the iphone, is it’s brains: the SoC. It is designed in California and manufactured in South Korea and Taiwan, by Samsung and TMSC respectively.

    Btw, it seems to me that the industrial powerhouses South Korea and Taiwan could be seen as proteges of Japan since they were once colonized by Japan and must have benefited from the japanese educational system’s emphasis on engineering and manufacturing.

    Read More
    • Replies: @Eamonn Fingleton
    A reply to Bliss:

    You write: "The most advanced component in Apple’s best selling (by far) product, the iphone, is it’s brains: the SoC." Actually, contrary to what you read in the American press, SoCs (the acronym refers to “system on a chip”) are not particularly advanced inputs and are widely available from many manufacturers. The most important – and costliest -- single component in an iPhone is its display. The dominant suppliers of displays are Japan Display and LG Display in that order. Who makes Apple’s ceramic capacitors? Its camera sensors? Who makes the advanced materials the Koreans need to make SoCs? Specifically where do the Koreans get their ultra-pure semiconductor-grade silicon? Where do they get the steppers that etch the circuitry on their SoCs? My case rests.

    , @jimmyriddle
    "It is designed in California"

    The SoC contains IP from many places.

    The CPU designs are from ARM (major design centres in Cambridge, England, south of France, CA and TX), the GPU from Imagination (Herts. England) etc
  42. @Bliss

    As for Apple, its most advanced components and materials are made in Japan.
     
    False. The most advanced component in Apple's best selling (by far) product, the iphone, is it's brains: the SoC. It is designed in California and manufactured in South Korea and Taiwan, by Samsung and TMSC respectively.

    Btw, it seems to me that the industrial powerhouses South Korea and Taiwan could be seen as proteges of Japan since they were once colonized by Japan and must have benefited from the japanese educational system's emphasis on engineering and manufacturing.

    A reply to Bliss:

    You write: “The most advanced component in Apple’s best selling (by far) product, the iphone, is it’s brains: the SoC.” Actually, contrary to what you read in the American press, SoCs (the acronym refers to “system on a chip”) are not particularly advanced inputs and are widely available from many manufacturers. The most important – and costliest — single component in an iPhone is its display. The dominant suppliers of displays are Japan Display and LG Display in that order. Who makes Apple’s ceramic capacitors? Its camera sensors? Who makes the advanced materials the Koreans need to make SoCs? Specifically where do the Koreans get their ultra-pure semiconductor-grade silicon? Where do they get the steppers that etch the circuitry on their SoCs? My case rests.

    Read More
    • Replies: @Bliss

    The most important – and costliest — single component in an iPhone is its display. The dominant suppliers of displays are Japan Display and LG Display in that order.
     
    True that Japanese companies Japan Display and Sharp provide around 2/3 of the displays in the latest iphones. And Sony provides all the cameras and Toshiba provides half the memory. That comes out to around $55 out of the $211 hardware cost of an iphone 6 plus. That is about the same as the hardware cost of Apple's SoC and Qualcomm's wireless chips (a fraction of which goes to japanese suppliers as you informed us). But the hardware cost of the iphone is less than 30% of it's retail cost. All the japanese suppliers combined likely make around 10% of the retail sales of iphones. That is still a lot no doubt, and probably few are aware of that.

    http://static.cdn-seekingalpha.com/uploads/2015/3/19553521_14265038500137_1.jpg
  43. @Eamonn Fingleton
    A reply to Bliss:

    You write: "The most advanced component in Apple’s best selling (by far) product, the iphone, is it’s brains: the SoC." Actually, contrary to what you read in the American press, SoCs (the acronym refers to “system on a chip”) are not particularly advanced inputs and are widely available from many manufacturers. The most important – and costliest -- single component in an iPhone is its display. The dominant suppliers of displays are Japan Display and LG Display in that order. Who makes Apple’s ceramic capacitors? Its camera sensors? Who makes the advanced materials the Koreans need to make SoCs? Specifically where do the Koreans get their ultra-pure semiconductor-grade silicon? Where do they get the steppers that etch the circuitry on their SoCs? My case rests.

    The most important – and costliest — single component in an iPhone is its display. The dominant suppliers of displays are Japan Display and LG Display in that order.

    True that Japanese companies Japan Display and Sharp provide around 2/3 of the displays in the latest iphones. And Sony provides all the cameras and Toshiba provides half the memory. That comes out to around $55 out of the $211 hardware cost of an iphone 6 plus. That is about the same as the hardware cost of Apple’s SoC and Qualcomm’s wireless chips (a fraction of which goes to japanese suppliers as you informed us). But the hardware cost of the iphone is less than 30% of it’s retail cost. All the japanese suppliers combined likely make around 10% of the retail sales of iphones. That is still a lot no doubt, and probably few are aware of that.

    http://static.cdn-seekingalpha.com/uploads/2015/3/19553521_14265038500137_1.jpg

    Read More
    • Replies: @Eamonn Fingleton
    A further reply to Bliss:
    Our conversation-on-the-margins began when you pronounced false my statement that Apple’s “most advanced components and materials are made in Japan.” You went on to suggest that Korean-made SoCs are the most important single components in most iPhones. We have now established that this is not true. Displays are costlier and Japan dominates the display business. I am grateful to you for admitting that Japan dominates also the supply of several other crucial components. As for the Koreans and the Taiwanese, although they are major contributors to the iPhone’s added-value, they in turn source much of their added value -- in the form of key materials and equipment -- from Japan. All in all, a reasonable guess is that Japan accounts for close to one-third of the hardware cost. Yes, this is a relatively small proportion of the total retail price of an iPhone but Apple’s super-high profit margins will ultimately prove ephemeral. Certainly previous highly profitable corporations that were once held in the same sort of reverent regard as Apple is today have gone the way of all flesh. Where is Xerox now? Digital Equipment? RCA?

    The East Asians have consistently targeted hardware not software as the key to fast economic growth. All the evidence is that they are right. You might wish to read my book In Praise of Hard Industries (Boston: Houghton Mifflin, 1999) for more details.
  44. @Bliss

    The most important – and costliest — single component in an iPhone is its display. The dominant suppliers of displays are Japan Display and LG Display in that order.
     
    True that Japanese companies Japan Display and Sharp provide around 2/3 of the displays in the latest iphones. And Sony provides all the cameras and Toshiba provides half the memory. That comes out to around $55 out of the $211 hardware cost of an iphone 6 plus. That is about the same as the hardware cost of Apple's SoC and Qualcomm's wireless chips (a fraction of which goes to japanese suppliers as you informed us). But the hardware cost of the iphone is less than 30% of it's retail cost. All the japanese suppliers combined likely make around 10% of the retail sales of iphones. That is still a lot no doubt, and probably few are aware of that.

    http://static.cdn-seekingalpha.com/uploads/2015/3/19553521_14265038500137_1.jpg

    A further reply to Bliss:
    Our conversation-on-the-margins began when you pronounced false my statement that Apple’s “most advanced components and materials are made in Japan.” You went on to suggest that Korean-made SoCs are the most important single components in most iPhones. We have now established that this is not true. Displays are costlier and Japan dominates the display business. I am grateful to you for admitting that Japan dominates also the supply of several other crucial components. As for the Koreans and the Taiwanese, although they are major contributors to the iPhone’s added-value, they in turn source much of their added value — in the form of key materials and equipment — from Japan. All in all, a reasonable guess is that Japan accounts for close to one-third of the hardware cost. Yes, this is a relatively small proportion of the total retail price of an iPhone but Apple’s super-high profit margins will ultimately prove ephemeral. Certainly previous highly profitable corporations that were once held in the same sort of reverent regard as Apple is today have gone the way of all flesh. Where is Xerox now? Digital Equipment? RCA?

    The East Asians have consistently targeted hardware not software as the key to fast economic growth. All the evidence is that they are right. You might wish to read my book In Praise of Hard Industries (Boston: Houghton Mifflin, 1999) for more details.

    Read More
    • Replies: @Bliss

    You went on to suggest that Korean-made SoCs are the most important single components in most iPhones. We have now established that this is not true. Displays are costlier and Japan dominates the display business
     
    I don't see how displays being costlier makes them more important than the very brains of the iPhone, the SoC. The design of the SoC and the operating system are solely the intellectual property of Apple, and they are what makes iPhones unique. Most everything else: displays, cameras, memory, wireless chips, batteries etc are commodities with more than one supplier that Apple can choose from. Likewise manufacturing and assembling can be outsourced to more than one company.

    Yes, this is a relatively small proportion of the total retail price of an iPhone but Apple’s super-high profit margins will ultimately prove ephemeral
     
    But Sony's Xperia smartphones cost just as much as their Apple counterparts, yet Sony Mobile is losing money. Hmmm?
  45. @Eamonn Fingleton
    A further reply to Bliss:
    Our conversation-on-the-margins began when you pronounced false my statement that Apple’s “most advanced components and materials are made in Japan.” You went on to suggest that Korean-made SoCs are the most important single components in most iPhones. We have now established that this is not true. Displays are costlier and Japan dominates the display business. I am grateful to you for admitting that Japan dominates also the supply of several other crucial components. As for the Koreans and the Taiwanese, although they are major contributors to the iPhone’s added-value, they in turn source much of their added value -- in the form of key materials and equipment -- from Japan. All in all, a reasonable guess is that Japan accounts for close to one-third of the hardware cost. Yes, this is a relatively small proportion of the total retail price of an iPhone but Apple’s super-high profit margins will ultimately prove ephemeral. Certainly previous highly profitable corporations that were once held in the same sort of reverent regard as Apple is today have gone the way of all flesh. Where is Xerox now? Digital Equipment? RCA?

    The East Asians have consistently targeted hardware not software as the key to fast economic growth. All the evidence is that they are right. You might wish to read my book In Praise of Hard Industries (Boston: Houghton Mifflin, 1999) for more details.

    You went on to suggest that Korean-made SoCs are the most important single components in most iPhones. We have now established that this is not true. Displays are costlier and Japan dominates the display business

    I don’t see how displays being costlier makes them more important than the very brains of the iPhone, the SoC. The design of the SoC and the operating system are solely the intellectual property of Apple, and they are what makes iPhones unique. Most everything else: displays, cameras, memory, wireless chips, batteries etc are commodities with more than one supplier that Apple can choose from. Likewise manufacturing and assembling can be outsourced to more than one company.

    Yes, this is a relatively small proportion of the total retail price of an iPhone but Apple’s super-high profit margins will ultimately prove ephemeral

    But Sony’s Xperia smartphones cost just as much as their Apple counterparts, yet Sony Mobile is losing money. Hmmm?

    Read More
    • Replies: @Eamonn Fingleton
    Yet another reply to Bliss:

    You write: “I don’t see how displays being costlier makes them more important than the very brains of the iPhone, the SoC.” This is to view things in anthropomorphic terms, which is highly misleading. The iPhone is not a human being and its SoC is not a “brain” in any meaningful sense. It is no more than a fast microchip that coordinates the activities of other microchips. SoCs are available from many manufacturers in several countries. State-of-the-art screens by contrast represent a much more sophisticated engineering challenge which is why they are available from only a few of the world’s most advanced manufacturers – and are priced accordingly.

    As for the iPhone’s operating system, you seem to have forgotten that control of operating systems is ephemeral. It is not that long ago that IBM’s leadership in mainframe operating systems was considered a rock-solid license to print money. Then came Microsoft’s Windows and Nokia’s Symbian. Anyone who thinks Apple’s current preeminence will last forever has little idea how the world works.

    As the East Asians have proved, leadership in advanced manufacturing by contrast is a much more enduring source of wealth (in special steels, for instance, the Japanese have been dominant suppliers since as far back as the 1950s).
  46. @Chuck
    I wouldn't worry too much about Japan controlling western media. The Japanese have never been very good at "soft power." How much has Japanese pop culture penetrated the West? Whereas they consume plenty of western media. How many Japanese celebrities are famous in the West versus how many western celebrities are famous in Japan?

    The Japanese purchase of Hollywood movie studios was a disaster for them. Panasonic lost billions and quickly exited. Sony stuck with it after losing a ton of money, but has it really helped them retain their consumer electronics dominance? Apple is now king of consumer electronics.

    Mr. Fingleton, I have a question regarding Japanese corporate hiring practices. I read in "Sony: A Private Life" that Sony had(has?) a penchant for hiring jews to run their US operations. Is this true for Japanese corporations in general?

    Maybe in their US operations but Loeb was told to take a hike by Sony when sought to join the board and the Lee family is squeezing out Singer at Samsung. East Asian business remains closed to outsiders.

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  47. @Bliss

    You went on to suggest that Korean-made SoCs are the most important single components in most iPhones. We have now established that this is not true. Displays are costlier and Japan dominates the display business
     
    I don't see how displays being costlier makes them more important than the very brains of the iPhone, the SoC. The design of the SoC and the operating system are solely the intellectual property of Apple, and they are what makes iPhones unique. Most everything else: displays, cameras, memory, wireless chips, batteries etc are commodities with more than one supplier that Apple can choose from. Likewise manufacturing and assembling can be outsourced to more than one company.

    Yes, this is a relatively small proportion of the total retail price of an iPhone but Apple’s super-high profit margins will ultimately prove ephemeral
     
    But Sony's Xperia smartphones cost just as much as their Apple counterparts, yet Sony Mobile is losing money. Hmmm?

    Yet another reply to Bliss:

    You write: “I don’t see how displays being costlier makes them more important than the very brains of the iPhone, the SoC.” This is to view things in anthropomorphic terms, which is highly misleading. The iPhone is not a human being and its SoC is not a “brain” in any meaningful sense. It is no more than a fast microchip that coordinates the activities of other microchips. SoCs are available from many manufacturers in several countries. State-of-the-art screens by contrast represent a much more sophisticated engineering challenge which is why they are available from only a few of the world’s most advanced manufacturers – and are priced accordingly.

    As for the iPhone’s operating system, you seem to have forgotten that control of operating systems is ephemeral. It is not that long ago that IBM’s leadership in mainframe operating systems was considered a rock-solid license to print money. Then came Microsoft’s Windows and Nokia’s Symbian. Anyone who thinks Apple’s current preeminence will last forever has little idea how the world works.

    As the East Asians have proved, leadership in advanced manufacturing by contrast is a much more enduring source of wealth (in special steels, for instance, the Japanese have been dominant suppliers since as far back as the 1950s).

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  48. Anyone who thinks Apple’s current preeminence will last forever has little idea how the world works.

    Anyone with half a brain knows that nothing lasts forever. What’s your point? Do you really think east asian leadership in advanced manufacturing will last forever?

    SoCs are available from many manufacturers in several countries.

    You seem to be unaware of the fact that Apple uses it’s own SoC it designed to work optimally with it’s own operating system. That is why the sony cameras on the iphone perform better than the cameras on Sony’s own phones…which use Qualcomm’s SoC and Google’s Android operating system.

    As for the iPhone’s operating system, you seem to have forgotten that control of operating systems is ephemeral

    Again, everything is ephemeral. You think domination in electronics manufacturing is not ephemeral? Has Samsung not surpassed Sony?

    leadership in advanced manufacturing by contrast is a much more enduring source of wealth

    Leadership in niche manufacturing is more prone to change, through competition and technological disruption, than control of an entire ecosystem like Apple, Google and Microsoft enjoy.

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  49. “Nikkei is fronting for the entire Japanese economic system in seeking to control one of the world’s most influential Anglophone news organizations.”

    They would surely be better off leaving the FT alone if it is as clueless as Eamonn says .

    On the other hand, the author’s status as a former FT editor and critic of Japan couldn’t have precipitated the Japanese into buying the FT to prevent any more Fingletons, could it?

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  50. @Bliss

    As for Apple, its most advanced components and materials are made in Japan.
     
    False. The most advanced component in Apple's best selling (by far) product, the iphone, is it's brains: the SoC. It is designed in California and manufactured in South Korea and Taiwan, by Samsung and TMSC respectively.

    Btw, it seems to me that the industrial powerhouses South Korea and Taiwan could be seen as proteges of Japan since they were once colonized by Japan and must have benefited from the japanese educational system's emphasis on engineering and manufacturing.

    “It is designed in California”

    The SoC contains IP from many places.

    The CPU designs are from ARM (major design centres in Cambridge, England, south of France, CA and TX), the GPU from Imagination (Herts. England) etc

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  51. @Bliss

    The FT has led the global press in presenting Japan as a basket case.......In publicizing the basket-case story the FT has fallen for a characteristically brilliant Japanese propaganda initiative. Japanese officials see major advantages in pretending their nation is weak and dysfunctional. Certainly in the 1980s they learned the hard way that clear evidence of Japan’s success created a hornet’s nest of diplomatic problems. Most notably trade tensions with the United States became so explosive that a trade war seemed imminent.
     
    That's a good reason for Japan to buy the FT. Paying a premium price for it rewards the previous owners of the FT for serving Japan's cause, and owning it now ensures the FT will continue in the same path.

    The doom and gloom narrative about Japan never made much sense to me. Neither did the 1980s narrative about Japan replacing America as #1. After all, post-WWII Japan is a defeated nation with a very large American military presence.

    Ultimately the US-Japan alliance will prove to be as makeshift as any Russia-China alliance. Ditto for the US-South Korea alliance. Far from declining Japan is actually rising when it comes to hard power:

    http://www.dailymail.co.uk/sciencetech/article-3179045/The-Death-Star-weapon-Japan-just-fired-world-s-powerful-laser.html

    The Death Star weapon is here! Japan fires world's most powerful laser

    If future wars are fought largely by robots and lasers Japan already has a head start...

    The Death Star weapon is here! Japan fires world’s most powerful laser

    Omae no chichi wa washi da

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  52. @Bliss

    Japan’s demographic profile is a triumph in another way in that it stems from remarkable progress in healthcare. Average life expectancy has increased more than 20 years since the late 1940s – and given that the Japanese have been eating more McDonald’s hamburgers lately, diet is not the explanation. Rather the Japanese healthcare system, one of the world’s most efficient, excels particularly in early diagnosis of diseases that if not caught in time claim lives.

    Perhaps the most compelling single statistic is that just since 1989 alone, average life expectancy at birth has increased by 5.9 years – to 84.7 years from 78.8 years. This means the Japanese now typically live 4.3 years longer than Britons and 5.0 years longer than Americans.
     
    But asian-americans served by the same healthcare system as white americans live 7.6 years longer than the latter. Even latinos in the US live 3.9 years longer than whites:

    http://kff.org/other/state-indicator/life-expectancy-by-re/


    On the other hand white-americans live 4.3 years longer than black-americans. Which could lead to some proud chest-thumping among the majority of commenters here....

    asian-americans served by the same healthcare system as white americans live 7.6 years longer than the latter. Even latinos in the US live 3.9 years longer than whites:

    http://kff.org/other/state-indicator/life-expectancy-by-re/

    And in today’s news:

    http://atlanta.cbslocal.com/2015/08/12/study-genetic-makeup-leading-factor-in-why-smarter-people-live-longer/

    The reason why intelligent people tend to live longer is primarily due to an individual’s genes, according to new research. Researchers found that about 95 percent of the link between intelligence and longevity can be explained by genetic influences on both traits, as reported by LiveScience.

    So based on the above, mestizos should be more intelligent than whites?

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  53. The Japanese prime minister in his recent long speech was pointing to the Japanese 1905 victory over Russia as the beginning of the anti colonial movement. Quite interesting that they are trying to portray themselves as fundamentally Asian. Mearsheimer predicts China becoming a mega power, and fear of their intention making neighbors especially Japan, part of a US led anti China alliance (along with Russia and India). A Japanese agreement to exploit Russian resources would make Japan a lot more important. But, if Japan was to have a rapprochement with China, that could make them an unstoppable force in the world

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    • Replies: @Bliss

    The Japanese prime minister in his recent long speech was pointing to the Japanese 1905 victory over Russia as the beginning of the anti colonial movement.
     
    Actually it was the success of the American Revolution of 1776 that marked the beginning of the anti-colonial movement. And the victorious Haitian Revolution of 1804 marked the beginning of the end of euro colonialism in South America.

    Japan's victory over Russia in 1905 undoubtedly was a turning point in history, having clearly demonstrated to the world that the West could be beaten at it's own game by non-westerners. Japan forever owns the bragging rights to being the first non-european nation to attain Great Power status in the Modern Age.

    The ease with which Japan defeated and evicted westerners from their asian colonies during WWII (the French from Vietnam, the British from Malaya, the Dutch from Indonesia, and Americans from the Philippines) clearly encouraged and emboldened the colonized asians who then fought and kicked out their returning european colonizers after Japan's defeat in WWII.
  54. THE ECONOMIST TO BE SOLD NEXT?

    READ THIS ECONOMIST EMAIL:

    Dear xxxxx,

    You may have seen in the news this week that The Economist Group will buy back shares from Pearson plc, in what is the most important change to the Group’s shareholding structure in almost 90 years.

    As our editor, Zanny Minton Beddoes, explained in a letter published recently, the move will further safeguard The Economist’s editorial independence, improving our ability to serve our readers in future.

    The changes represent an investment in the trust our readers hold in The Economist, as a source of reliable and independent news, analysis and opinion.

    To help explain these changes, The Economist Group’s CEO Chris Stibbs will be available to answer readers’ questions during a live Facebook Q&A today at 14:00 BST. Chris will be on hand to answer any questions you have about the Group and the wider trends in publishing in a digital age.

    To take part, simply “Like” The Economist on Facebook and post your question to Chris now in the Q&A comments section at the top of the page. Then join the discussion live today.

    You can also stay up to date with all the latest news, analysis and opinion from The Economist via our social channels, on Facebook, Twitter , LinkedIn , Google+, Instagram and YouTube.

    Yours sincerely,

    Michael Brunt
    Chief Marketing Officer

    Read More
    • Replies: @anon

    THE ECONOMIST TO BE SOLD NEXT?
     
    I hope so. It would be good to see all the neoliberal propaganda rags swallowed up by their own Frankenstein.
  55. @Sean
    The Japanese prime minister in his recent long speech was pointing to the Japanese 1905 victory over Russia as the beginning of the anti colonial movement. Quite interesting that they are trying to portray themselves as fundamentally Asian. Mearsheimer predicts China becoming a mega power, and fear of their intention making neighbors especially Japan, part of a US led anti China alliance (along with Russia and India). A Japanese agreement to exploit Russian resources would make Japan a lot more important. But, if Japan was to have a rapprochement with China, that could make them an unstoppable force in the world

    The Japanese prime minister in his recent long speech was pointing to the Japanese 1905 victory over Russia as the beginning of the anti colonial movement.

    Actually it was the success of the American Revolution of 1776 that marked the beginning of the anti-colonial movement. And the victorious Haitian Revolution of 1804 marked the beginning of the end of euro colonialism in South America.

    Japan’s victory over Russia in 1905 undoubtedly was a turning point in history, having clearly demonstrated to the world that the West could be beaten at it’s own game by non-westerners. Japan forever owns the bragging rights to being the first non-european nation to attain Great Power status in the Modern Age.

    The ease with which Japan defeated and evicted westerners from their asian colonies during WWII (the French from Vietnam, the British from Malaya, the Dutch from Indonesia, and Americans from the Philippines) clearly encouraged and emboldened the colonized asians who then fought and kicked out their returning european colonizers after Japan’s defeat in WWII.

    Read More
    • Replies: @Anonymous Nephew
    "The Japanese prime minister in his recent long speech was pointing to the Japanese 1905 victory over Russia as the beginning of the anti colonial movement."

    I forget where, but I remember reading something by an early Indian anti-colonialist leader who said the 1905 Japanese victory electrified politically aware Indians because it showed them that white people were not invincible.
  56. AndrewR [AKA "Aiden"] says:     Show CommentNext New Comment
    @Wizard of Oz
    I have reason to think well of Japanese people but I toss into the mix of comments the implications of Japanese girls marrying non Japanese husbands by orders of magnitude more often than Japanese men marry foreigners - certainly foreigners of European descent. I know about 15 couples in which a Japanese wife is married to a white Australian male but not a single one in which a white Australian woman is married to a Japanese. My impression is that part of the reason is that some young Japanese women like the freedom from hidebound Japanese custom.

    Well, to be blunt, despite Japan’s very macho history, Japanese men tend to be quite feminine these days. Men of European descent skew manlier thus Japanese women are unsurprisingly attracted to this.

    Read More
  57. AndrewR [AKA "Aiden"] says:     Show CommentNext New Comment
    @Threecranes
    It's refreshing to hear someone with authority puncture the hot-air rhetoric of Japan being on its last legs, a nation of unimaginative conformists incapable of genuine technological creativity, groaning under the burden of an aged population etc. How can this prognosis of imminent doom be true when the Japanese economy still runs huge trade surpluses? Evidently foreign consumers still value what Japan produces, which is more than can be said of the U.S. economy.

    Speaking of Japan's capacity for strategic misdirection, I forget which, but one of Japan's former prime ministers went so far as to compare Japan's relations with the USA as being that of the docile, obedient wife to the manly American husband. Anyone who takes that at face value and truly believes that Japanese males will content themselves with a supportive, nurturing role to an arrogant, staggering, blundering United States is a complete fool. The Japanese are a proud, competent people and will never settle for taking a back seat to anyone, as studying their martial history will attest and they are quietly pursuing weapons research etc. as well as all the other tools of national sovereignty in spite of public protestations to the contrary.

    The war and occupation really did fundamentally change Japanese society and the Japanese mentality to a degree probably unprecedented in human history in such a short time span. Almost a lifetime later, pacifism still has a stronger hold over the Japanese than arguably any other people.

    Read More
  58. anon says:     Show CommentNext New Comment

    do we really think that the editors and managers of Nikkei understand the values of independence of thought that distinguish British financial journalism?

    lol

    British financial journalism is a fully owned subsidiary of the City of London branch of the banking mafia.

    And where was Nikkei on the “ comfort women” sex slavery issue? Nowhere, of course.

    Where was the FT on the tens of thousands of British children forced into prostitution over the last 16 years to supply the demand for cheap prostitutes caused by the economic and migration policies promoted by the FT?

    Read More
  59. anon says:     Show CommentNext New Comment
    @22pp22
    At least the Japanese government is concerned to ensure the survival and prosperity of its own people. White people suffer under governments who hate them and wish to destroy them. Every time I hear the words Cameron or Blair I see a tapeworm crawling out of a pig's rectum.

    Every time I hear the words Cameron or Blair I see a tapeworm crawling out of a pig’s rectum.

    Interesting. My analogy is a cockroach crawling out of a dying plague rat’s rectum.

    Read More
  60. anon says:     Show CommentNext New Comment
    @LondonBob
    Like many countries in the Orient Japan is a managed democracy, no doubt Lee Kwan Yew is popular there I would guess.

    I have been familiar with Eamonn's work for a number of years and because of that I feel I have some sort of grasp on Japan, I feel that almost all Western commentators on Japan don't know what they are talking about. On a GDP per capita basis Japan has kept on going despite the supposed lost decade(s). Of course Japan will be the first country to emerge from the demographic crunch and has avoided the stop gap solution (disaster) of mass immigration and I have read a few articles recently that the corner has even been turned in this regard. The public debt issue remains a concern though, no one should like taking the other side of the trade to Kyle Bass, but have heard explanations that imply that this can be manged (internally held and Japan owns substantial foreign assets). Either way a drop in commodity prices and restarting of the nuclear power plants should provide strong tailwinds for the Japanese economy.

    Unfortunately in Britain we remain a slave to the open economy ideology, when we should be more discriminating in regard to foreign takeovers. This is another foreign takeover that should have been queried. Still it will prove a poor purchase if concerns arise about the quality of coverage.

    On another note I am pleased to see another independent thinker who is well worth reading added to the roster.

    no one should like taking the other side of the trade to Kyle Bass

    Bass was fooled by the blank slate demographics propaganda pushed out by the financial media for their banking mafia masters.

    A declining population of *intelligent* people that will eventually level out once they have more space per head is *massively* better than a rapidly growing population of *stupid* people.

    Read More
  61. anon says:     Show CommentNext New Comment
    @Bill B.
    THE ECONOMIST TO BE SOLD NEXT?

    READ THIS ECONOMIST EMAIL:


    Dear xxxxx,

    You may have seen in the news this week that The Economist Group will buy back shares from Pearson plc, in what is the most important change to the Group’s shareholding structure in almost 90 years.

    As our editor, Zanny Minton Beddoes, explained in a letter published recently, the move will further safeguard The Economist’s editorial independence, improving our ability to serve our readers in future.

    The changes represent an investment in the trust our readers hold in The Economist, as a source of reliable and independent news, analysis and opinion.

    To help explain these changes, The Economist Group’s CEO Chris Stibbs will be available to answer readers’ questions during a live Facebook Q&A today at 14:00 BST. Chris will be on hand to answer any questions you have about the Group and the wider trends in publishing in a digital age.

    To take part, simply “Like” The Economist on Facebook and post your question to Chris now in the Q&A comments section at the top of the page. Then join the discussion live today.


    You can also stay up to date with all the latest news, analysis and opinion from The Economist via our social channels, on Facebook, Twitter , LinkedIn , Google+, Instagram and YouTube.

    Yours sincerely,

    Michael Brunt
    Chief Marketing Officer

    THE ECONOMIST TO BE SOLD NEXT?

    I hope so. It would be good to see all the neoliberal propaganda rags swallowed up by their own Frankenstein.

    Read More
    • Replies: @Bill B.
    I still like the Economist and buy it but I don't actually read it much any more.

    He is noticeable less sharp that it used to be perhaps because the world has revealed itself to be more complicated than the Economist thought it to be.

    Years ago a Vanity Fair article complained that its young, smart writers always thought that there were three points that could be made about every problem - irrespective of the problem it was always three.

    When it is forced to stray beyond its typical free-market solution it flounders, not anticipating the 2009 crash and being remarkably complacent about immigration etc.. It, increasingly like the FT, has no soul. It does not understand that the decisions people make when choosing a new TV are entirely of a different order to the decisions people make over which siren call to heed.
  62. @anon

    THE ECONOMIST TO BE SOLD NEXT?
     
    I hope so. It would be good to see all the neoliberal propaganda rags swallowed up by their own Frankenstein.

    I still like the Economist and buy it but I don’t actually read it much any more.

    He is noticeable less sharp that it used to be perhaps because the world has revealed itself to be more complicated than the Economist thought it to be.

    Years ago a Vanity Fair article complained that its young, smart writers always thought that there were three points that could be made about every problem – irrespective of the problem it was always three.

    When it is forced to stray beyond its typical free-market solution it flounders, not anticipating the 2009 crash and being remarkably complacent about immigration etc.. It, increasingly like the FT, has no soul. It does not understand that the decisions people make when choosing a new TV are entirely of a different order to the decisions people make over which siren call to heed.

    Read More
  63. @Bliss

    The Japanese prime minister in his recent long speech was pointing to the Japanese 1905 victory over Russia as the beginning of the anti colonial movement.
     
    Actually it was the success of the American Revolution of 1776 that marked the beginning of the anti-colonial movement. And the victorious Haitian Revolution of 1804 marked the beginning of the end of euro colonialism in South America.

    Japan's victory over Russia in 1905 undoubtedly was a turning point in history, having clearly demonstrated to the world that the West could be beaten at it's own game by non-westerners. Japan forever owns the bragging rights to being the first non-european nation to attain Great Power status in the Modern Age.

    The ease with which Japan defeated and evicted westerners from their asian colonies during WWII (the French from Vietnam, the British from Malaya, the Dutch from Indonesia, and Americans from the Philippines) clearly encouraged and emboldened the colonized asians who then fought and kicked out their returning european colonizers after Japan's defeat in WWII.

    “The Japanese prime minister in his recent long speech was pointing to the Japanese 1905 victory over Russia as the beginning of the anti colonial movement.”

    I forget where, but I remember reading something by an early Indian anti-colonialist leader who said the 1905 Japanese victory electrified politically aware Indians because it showed them that white people were not invincible.

    Read More
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