Dogs And Demons [Paperback]

Kerr points out that the proof of Japan's error is everywhere. He notes that Japan has largely fallen off the international tourism circuit, that its scarred "construction state" landscape is not what tourists want to see. He fortifies this point by observing that while travel to Japan has shrunk, travel of Japanese to foreign countries has skyrocketed. He states that the museum most visited by Japanese people is not in Japan: the Louvre in France. Not only is Japan failing to attract the tourists, he states, it is now also failing to attract leading business investors. Kerr points out that other financial centers in Asia such as Singapore and Hong Kong have surpassed Japan in their appeal to investment bankers as these cities are more welcoming to entrepreneurial business and have more advanced information technology sectors. Kerr points out that most of Japan's banks would be considered bankrupt by international standards. Japan, with its reputation for being at the forefront of modern economics and technology, has fallen behind.

From the above description, one might assume that Kerr has an agenda of "Japan bashing." This is not the case. Kerr's book, though it is a passionate attack on Japan's bureaucracy, is a lamentation. Kerr laments Japan's destruction of its own land and traditional places. He laments that the general populace in Japan has been educated to be obedient and docile and has not been able to reclaim power from a bureaucracy that he describes as a "battleship" heading straight for the "rocks." He criticizes the education system for its emphasis on conformity and wrote learning as well as encouraging students to spend every waking hour in cram schools or clubs that further enforce these patterns. He states that this system leaves students exhausted and with little time to be creative or form their own opinions. In this way when these students become adults they do not have the faculties to question a system that hugely favors industry over their own interests. He points out that in Japan, citizens make almost no interest on the massive savings needed to purchase a residence, spend little time at university engaged in rigorous study, and live cramped quarters that cost more than spacious accommodations of countries with higher population densities. Whereas people in other rich countries are able to make money with their money through retirement funds, Japanese people are increasingly burdened by "loan-shark" consumer debt companies. Kerr finds that the sacrifices of the Japanese people are great, and that those that benefit from the system are doing little productive good.

Kerr is an author of books in both English and Japanese, and is a longtime resident of Japan. He is often hired as a consultant and speaker in Japan. He is without a doubt one of the most respected foreign intellectuals in Japan. In Dogs and Demons he writes of his inner struggle in writing the book. His Japanese friends and colleagues urged him to persevere. He states: "I do not believe foreigners should make demands on Japan." Thus his book is a collection of observations that many people in Japan are not in a position to make. Kerr has dared to break the silence that a destructive system perpetuates. His book is powerful and essential reading for anyone interested the difficulties confronting modern Japan.

But, as this book is bitter in tone, be sure to balance this book's message with the galaxy of other books that look fondly on Japan.

Alex Kerr has spent thirty five years in Japan, he speaks and writes the language as well as the average Japanese, and he calls Japan his home. In various ways I could argue that Alex Kerr is Japanese in most ways except on his passport. But there is no denying his perceptions garnered from being very Japanese in certain ways but very obviously not in others. In Dogs and Demons he uses his attachment to Japan and his linguistic skills to expose and highlight problems that he sees in Japan from various elements. For instance there is economy, thirteen years in recession and continuously amounting a huge national debt that in some estimates could be upwards of (US)$11trillion. (He goes on to explain why this figure is neither official nor exactly accountable, which is linked to other problems.) There is the environment, which from an aesthetic perspective is cluttered with concreted rivers, cedar monoculture forestry, clusters of exposed power lines in every urban and suburban center, uninspired architecture of concrete and molded plastic, and an overwhelming obsession with grandiose and uninspired monuments that pepper the landscape. From a health standpoint there is pollution from dioxin emissions from garbage incinerators, nuclear blunders (including "The worst since Chernobyl"), and regulations that pale in comparison to Europe and the United States. Kerr further goes on to highlight problems in culture (ex. the lackluster output of movies), sports (ex. the current exodus of the best players to other countries), population (ex. Less people being born, a lot more entering retirement), and the general societal malaise to it all.

His main argument for why all these problems exist lies with the bureaucracy. It is the bureaucracy that controls the distribution and means of most of these problems. Constantly throughout the book he links the problems he mentions with the overwhelming and uncontrollable power the intricate matrix that is the Japanese bureaucracy has over nearly every aspect of Japanese life. In the end Kerr argues that it could potentially be the downfall of Japan as a major influence in world affairs, be he still remains optimistic. It is after all the reason why he wrote this book.

For the first 3/4s of Dogs and Demons I was ready to give it five stars for being an excellent, well researched, and impassioned expose of problems facing Japan. His chapter about the economy can be laborious in its detail, but for the most part he was doing a very good job. It was only when he got to the chapter about movies and the entertainment industry that his argument started to loose steam. His thesis for the problems with the Japanese entertainment industry is solid, but his arguments are weak. Twice I caught facts that were wrong ("Disney's The Prince of Egypt" was made by Dreamworks, and on one page he correctly says the original Godzilla was released in 1954 while one page later he says 1956.) and it makes me wonder what else he may have gotten wrong that I missed. All in all it sounds like that particular chapter was garnered from friends who know more about the subject of movies and such than Kerr does. Whether this factual laziness is concurrent with the rest of his book, I somehow hope not and think he is more knowledged about the economy and society than movies, but it makes me wonder.

The other slight I will give to the book that is worth noting is with perspective. Constantly throughout the book Kerr will make comparisons to economic, environmental and other such policies of western European countries and the US that are always meant to be the better alternative than what is going on in Japan. People who bother with the situation at all will agree that the US and Europe have problems of their own and proffering them as the solution to Japan potentially reeks of a cultural bias of generations past. (But in hindsight I realized Kerr may be using this tactic not just for comparison, but as a way to goad (or shame) Japan into trying harder. After all, Japan has been trying to leapfrog the west for over a century. Why stop now?)

Having spent two years studying in Japan I was glad I read this book. Even if it made me feel a little sour about a place and culture I have dedicated so much time to. Kerr's tactic may seem off-putting, but it is a work that practices tough love to open people's eyes. Even when Kerr lambasted things I liked about Japan -- like the $1billion city hall complex in Tokyo that is a favorite destination of mine -- I understood his criticism of them and saw that one can love something enough to wish it to become better than what it currently is. A very worthwhile book.

"the author tries to detail how the hugely complex Japanese economy is a total mess, when in reality it is the second largest in the world... In fact what they have achieved in 50 years may be one of mankind's greatest economic miracles" - T Biamonte

Response: Actually, Kerr himself states that the rapid development of the Japanese economy was a miracle, but Biamonte's preceding statement relies on the "Biggu izu bettaa" fallacy through which many Japanese banks have merged, becoming the world's largest in terms of assets, while remaining essentially bankrupt due to even greater liabilities. An economy is large in GDP terms if it spends/consumes a lot, but if this consumption is founded (as in Japan) on massive borrowing which can't be repaid without massive inflation which the government won't allow, then it really is "a total mess".

"Example [of stupid arguments]: Japanese businesses really have no capital and inflate all earnings beyond actual facts. Hey, if this was true, wouldn't someone have noticed before him?" -chimara27

Response: Well, yes, but the fact that this hasn't come out in a major newspaper or academic journal doesn't mean that nobody noticed, simply that it hasn't been made official. Why not? As Kerr patiently explains, journalists not satisfied with being spoon-fed official accounts from industry and the bureaucracies are blacklisted from press-clubs and can't do their jobs; any bureaucrats who informed the public of these issues would be missing out on a profitable semi-retirement as an amakudari "consultant" for a large corporation; general employees who exposed this issue would be sacked and probably refused employment by other companies (this last point is my own, but pretty much common sense to anyone who has worked for a Japanese company).

"[Regarding payments to surgeons, Kerr] got Y100,000-200,000 right, but that is not under the table, it is OVER the table (as a gift)" - A reader from New York city, New York

Sorry, friend, but "gifts" of money to supplement what should be an arm's-length transaction between surgeon and patient are, by definition "under the table", regardless of how many people know about them or where, physically in relation to the furniture, the handover takes place.

"In the intro, Kerr admits himself that ["Dogs and Demons"] is a CHINESE reference and not even a Japanese one. The taking one bit of Other culture to represent anOther is classic racism. Then again also isn't it a little suspect for someone who has supposedly lived in Japan for 35 years to compare Japanese people with animals and supernatural specters to describe them?" - A reader from New York city, New York.

Response: It's interesting to see someone cry racism after swinging round a derogatory term like "gaijin" just a paragraph earlier. The "dogs and demons" metaphor is just that, a METAPHOR for the aspects of society which have been overdeveloped or neglected by the bureaucracies. If you seriously think Kerr is likening Japanese citizens to canines or evil spirits, then you either haven't read, or have completely misunderstood, this book. To claim that openly applying an apt metaphor from another culture to Japan constitutes racism is just ridiculous! Is it racism to say that financial accounting in Japan has a "through the looking glass" feel to it? What if a non-Chinese country were said to be "riding the tiger" (e.g. the US in Iraq), would that be racism? Surely not!

"he suggests that the Japanese government's replacing foreign teachers who have been in Japan for a long time with foreign teachers who have short term contracts is a result of xenophobia and racism... his argument doesn't make sense. One would expect foreigners who have been in the country longer to be less "foreign" than newly arrived foreigners." - Justus Pendleton

Response: As Kerr explains (how many of these critics haven't read this book properly?!?), the result of this policy is that new foreign teachers are kept on a shorter leash than the previous long-term teachers. They have less time to become familiar with Japanese people, or become proficient in the language to the point where they could disseminate ideas which might disrupt the bureaucratic stranglehold on the peoples' thinking, for example spreading the fact that equivalent citizens in supposedly "poorer" developed nations enjoy a much higher standard of living than the Japanese, or that a democracy should allow the government and its agencies to be answerable to the people (which is clearly not the case in Japan).

"Virtually every one of his references to dividends - and their applicability to corporate finance, desirability, etc, etc - are just plain wrong. A company can either pay dividends or use the capital. In reality, not paying dividends is BETTER (at least in the US) since dividends are subject to income tax. But if the company keeps the money then capital appreciation occurs... so proceeds are taxed at capital gains rates (which are less)." - Justus Pendleton

Response: Oh dear, a little knowledge is truly a dangerous thing. Reinvestment of earnings is only "better" than paying dividends PROVIDED THAT the earnings can be reinvested so as to allow a higher cash return (taking into account tax effects) to equityholders in the future. Capital appreciation of stock IS NOT a given, despite MOF efforts to make it so, but rather an occasional change in present value estimation based on expectation that a company which reinvests its earnings now can pay an even higher dividend (or buy back the stock at a higher price) in the future. If, as occurred during the Bubble, a company doesn't pay dividends, but instead invests earnings into buying overpriced land, to build a new factory which uses outdated, inefficient production methods to turn out products for which there is no demand, HOW ON EARTH can you expect the stock value to continually appreciate????

Read the book again, people!