February 9, 2016


Learning and Applying Lessons from the Sustainable Economy of the Edo Period

Keywords: Newsletter Steady-State Economy 

JFS Newsletter No.161 (January 2016)

Photo: Saburo Kato
Copyright the Japan Association of Environment and Society for the 21st Century All Rights Reserved.

Saburo Kato is a Japanese environmental activist and president of the Japan Association of Environment and Society for the 21st Century. After his experiences in environmental administration at the national government level, he decided to devote himself to activities aimed at developing a society based on a sustainable civilization in which people can enjoy spiritual affluence.

In this issue of the JFS Newsletter, we introduce an excerpt of our interview with Kato, focusing on the question: "What is economic growth?" In this interview, he points out the distortions in freedom and democracy as applied so far, and develops his discussion on the wisdom of Japan's Edo Period (1603-1868), which kept the society sustainable for a long time. He argues that we need to learn from this wisdom and reorganize it into a kind of logic applicable in current modern society. The interview was conducted by Junko Edahiro, president of the Institute for Studies in Happiness, Economy and Society and chief executive of JFS.

Kato: As I said, economic growth is not absolutely necessary in affluent societies that have already developed. Even in affluent countries, however, human dignity is not being maintained for quite a lot of people.

For example in Japan, many households with single mothers, have annual incomes below two million yen (about U.S.$16,800). In some households, the mother and/or father work to exhaustion to make ends meet, so it would not be ethical to make a sweeping statement to them that economic growth is not necessary.

But when we look at Japan and industrial countries as a whole, obviously we are in a situation of being saturated. For them it is rather a matter of distribution. Due to inadequate distribution, quite a lot of people in Japan have annual incomes of less than two million yen, and the number of people like this is increasing.

In the U.S., more and more people are conscious of the 1% ultra-rich versus the remaining 99%, and feel that they are the 99 percent. We need to look at this as a problem of distribution.

Furthermore, globally, more than one billion people are still living in extreme poverty. It is not ethical to expect them to agree that economic growth is not necessary.

This is also a matter of distribution for human society as a whole, just as it is in Japan, because obviously we are becoming more and more affluent materially, at global level.

Therefore, at international conferences -- for example on climate change issues, and a recent UN meeting on disaster prevention -- one of the major issues is naturally about how to distribute financial resources and technology between developing and affluent countries.

Edahiro: Is something sacrificed in order to sustain economic growth? And if so, what and why?

Kato: There are sacrifices in many areas.

But before I talk about that, let me add that the "distribution" I just mentioned is actually a difficult task. It is politically and philosophically challenging.

Edahiro: Philosophically? What kind of challenges?

Kato: In the past two centuries or so, humanity, especially mainly Western societies, have put a very high priority on "freedom." Besides freedom of thought and speech, the freedom of political association, and for the choice of what kind of businesses you do, freedom has also been given the greatest emphasis.

To maintain that freedom, the freedom of competition was empowered. People are told to make an effort freely within the concept of "free competition" and "freedom." Those who can run fast can advance themselves. Those who don't make as much effort or who lack the ability might fall behind, but that is just the way it is. That's what "freedom" and "personal responsibility" are all about. That's the thinking.

On the other hand, people like Professor Thomas Piketty, who recently has been very popular in Japan, claim that focusing too much on freedom leads to greater inequality, and that this has been the case especially since the start of the twentieth century. He calls for a global tax on the wealthy and as much as possible, diverting the tax revenue to help the poor as much as possible.

Others, such as the typical Republican supporter in the U.S., argue that ideas like Piketty's are wrong, because nothing is more important than human freedom. They would assert that there should be no limits on freedom, and it is unacceptable for governments to interfere with or restrict those who have become rich as a result of freedom.

Such a mindset is also found in Japan today. Though not as extreme as U.S. Republicans, some people here insist that personal freedom is essential, and that it should not be limited. Therefore, taxing the rich is also vigorously opposed in Japan, and these people say the rich would leave the country if we do such a thing. They are mired in this kind of discussion.

In any case, "distribution" in the sense of seeking "appropriate distribution" is also politically difficult. Especially, democratic politics nowadays are becoming quite unreliable -- which I think is a very critical point -- so I can't help thinking that it would be difficult to achieve fair distribution.

The reason is that the rich lobby to protect their interests. I never thought that lobbying itself was bad, but especially in American politics, the spending of enormous sums of money for lobbying has become a dominant driving force. The U.S. Supreme Court held that political funding should not be limited, and those who want to offer money should be allowed to do so without restriction. The idea is that if a donation is to express one's thinking and sentiments, what is wrong with providing unlimited funding to politicians who match one's interests? This stance is one of the consequences of such a heavy emphasis on freedom.

One of the outcomes, on the issue of climate change, is that oil and coal industries give generous political donations, lobby their representatives and actually spend money to spread skepticism and delay the necessary actions. Gun control is another example, and a recent example is the politically powerful and rich Jewish community in the U.S. lobbying to support Israel.

As a result of this kind of thing, parliamentary democracy, which was often considered to be ideal as a political form, ends up being significantly distorted.

In Japan, but not quite as much as in the U.S., politics is now being distorted. In Europe as well, it may not be as obvious as in the U.S., but there are various problems.

In that sense, when we look back, we can understand that the problem is that a policy to redistribute income by progressively taxing the rich has become more difficult to be implemented.

With these circumstances in mind, I think about how it was during the Edo period. I don't think the idea in the Edo period was to let the rich and powerful continue to grow, and to leave the poor and powerless to die. There was a spirit of helping and sharing

Belief systems such as Confucian ethics and Buddhism influenced the spirit of sharing in this era. An example is Yozan Uesugi (1751-1822), a politician who was appointed at a young age as a feudal lord to the Yonezawa Clan, which at the time was in financial turmoil, in today's Yamagata Prefecture. Back then, lords generally had a luxurious life, but he was determined to "eat only one soup and one side dish."

In short, he didn't have the thought of his own freedom as "I am the lord and I can do anything I want," but rather as a lord, he consciously and ethically "redistributed" incomes, as we might say today, in order to stabilize the lives of his people.

He wasn't unique in Japan. There are many similar cases. Yozan Uesugi was a typical example among them.

In slightly more modern times, Sontoku Ninomiya was not a lord but in fact, in an ordinary class, and he devoted himself to help those who were powerless and weak, making it a principle to save money and develop new fields to grow rice.

On the other hand, there will be a wider gap if we fundamentally support "freedom" and "free competition" saying that "there is nothing wrong about powerful people becoming more powerful" just like in the U.S.

It is a competition just like the sport of sumo. One wins and the other loses. No matter how many people are involved -- 3,000 or 10,000 or one billion -- ultimately, only one can win after intensive competition. The rest is a heap of losers.

But the political ideas and ethical views of Japan during and before the Edo period were different. It wasn't like "the most powerful people can win as much as they want."

That is why I am interested in the ethics and thinking of the Edo period. I brought a chart (Figure 1) here to explore the wisdom of the Japanese people during and before the Edo period and to revisit the view of economic perspectives and concepts of ethics that have been created by the Western world over many centuries.

Figure 1 (click the table for larger image).

The respect of freedom has been considered to be good. I don't mean to deny that in itself. Democracy is very valuable. So are globalization and scientific and technological development.

But I think this has all resulted in the impacts shown in the chart. It is not as simple as stating "freedom brings these," but the free competition that comes with these things creates a world where those in power win and disparities are widened. In the U.S., it is the structure of the one percent versus the 99 percent. In the capitalism-based current economy, we see the situation frequently raised by Professor Piketty. It is the law of the jungle. Consequently, the vitality of the society as a whole suffers, creating a lot of poor people, a heap of losers. Society as a whole loses vitality and becomes impoverished.

Freedom of speech and freedom of expression are of course essential, but a fundamentalist approach can lead to people to believe statements like, "It's crazy to control guns." "What's wrong with owning a gun?" "We need to carry guns in this increasingly dangerous world." If someone says, "I want to be naked," people may say, "Nothing's wrong with being naked." "Let them walk naked in the streets if they want to. They should be free to do so."

Continuing this kind of argument may result in disrupting the social order and stability. In short, recently I strongly feel that we may need to reconstruct the "freedom" and "democracy" which have been seen as good things until now.

"Jiyu to Minshushugi wo Mo Yameru" (Giving up on freedom and democracy), a book written by Professor Keishi Saeki of Kyoto University, is very interesting. At a glance, the title may imply that the author is a radical and odd person. Like others, I thought he was quite bold to say, "Let's give up on freedom and democracy."

But of course, he is far from being insincere. The book points out the problems caused by "freedom" and some sort of limitations of "democracy." I don't completely agree with Mr. Saeki, but realized that there was someone ahead of me at least who said the things like this.


Read the full version of this interview from the following weblink.