John Psmith reviews MITI and the Japanese Miracle by Chalmers Johnson:

I’ve been interested in East Asian economic planning bureaucracies ever since reading Joe Studwell’s How Asia Works (briefly glossed in my review of Flying Blind). But even among those elite organizations, Japan’s Ministry of International Trade and Industry (MITI) stands out. For starters, Japanese people watch soap operas about the lives of the bureaucrats, and they’re apparently really popular! Not just TV dramas; huge numbers of popular paperback novels are churned out about the men (almost entirely men) who decide what the optimal level of steel production for next year will be. As I understand it, these books are mostly not about economics, and not even about savage interoffice warfare and intraoffice politics, but rather focus on the bureaucrats themselves and their dashing conduct, quick wit, and passionate romances … How did this happen?

It all becomes clearer when you learn that when the Meiji period got rolling, Japan’s rulers had a problem: namely, a vast, unruly army of now-unemployed warrior aristocrats. Samurai demobilization was the hot political problem of the 1870s, and the solution was, well … in many cases it was to give the ex-samurai a sinecure as an economic planning bureaucrat. Since positions in the bureaucracy were often quasi-hereditary, what this means is that in some sense the samurai never really went away, they just hung up their swords — frequently literally hung them up on the walls of their offices — and started attacking the problem of optimal industrial allocation with all the focus and fury that they’d once unleashed on each other. According to Johnson, to this day the internal jargon of many Japanese government agencies is clearly and directly descended from the dialects and battle-codes of the samurai clans that seeded them.

This book is about one such organization, MITI, whose responsibilities originally were limited to wartime rationing and grew to encompass, depending who you ask, the entire functioning of the Japanese government. Because this is the buried lede and the true subject of this book: you thought you were here to read about development economics and a successful implementation of the ideas of Friedrich List, but you’re actually here to read about how the entire modern Japanese political system is a sham. This suggestion is less outrageous than it may sound at first blush. By this point most are familiar with the concept of “managed democracy,” wherein there are notionally competitive popular elections, culminating in the selection of a prime minister or president who’s notionally in charge, but in reality some other locus of power secretly runs things behind the scenes.

There are many flavors of managed democracy. The classic one is the “single-party democracy”, which arises when for whatever reason an electoral constituency becomes uncompetitive and returns the same party to power again and again. Traditional democratic theory holds that in this situation the party will split, or a new party will form which triangulates the electorate in just such a way that the elections are competitive again. But sometimes the dominant party is disciplined enough to prevent schisms and to crush potential rivals before they get started. The key insight is that there’s a natural tipping-point where anybody seeking political change will get a better return from working inside the party than from challenging it. This leads to an interesting situation where political competition remains, but moves up a level in abstraction. Now the only contests that matter are the ones between rival factions of party insiders, or powerful interest groups within the party. The system is still competitive, but it is no longer democratic. This story ought to be familiar to inhabitants of Russia, South Africa, or California.

The trouble with single-party democracies is that it’s pretty clear to everybody what’s going on. Yes, there are still elections happening, there may even be fair elections happening, and inevitably there are journalists who will point to those elections as evidence of the totally-democratic nature of the regime, but nobody is really fooled. The single-party state has a PR problem, and one solution to it is a more postmodern form of managed democracy, the “surface democracy”.

Surface democracies are wildly, raucously competitive. Two or more parties wage an all-out cinematic slugfest over hot-button issues with big, beautiful ratings. There may be a kaleidoscopic cast of quixotic minor parties with unusual obsessions filling the role of comic relief, usually only lasting for a season or two of the hit show Democracy. The spectacle is gripping, everybody is awed by how high the stakes are and agonizes over how to cast their precious vote. Meanwhile, in a bland gray building far away from the action, all of the real decisions are being made by some entirely separate organ of government that rolls onwards largely unaffected by the show.