Departures

Watanabe Yoshimi is on his own.

As Jun Okumura makes exceedingly clear, there is little chance that Mr. Watanabe will be joined by other LDP defectors in his effort to build a national movement to take down the old guard. (Although, surprisingly, Mr. Watanabe was joined by an LDP abstainer — Matsunami Kenta — in Tuesday's vote on the second stimulus, an act of rebellion for which Mr. Matsunami has already been punished by being stripped of his title as parliamentary secretary for the Cabinet Office.) Mr. Watanabe has indicated that he wants to build a "popular movement," not a new party.

The basis for this popular movement is anger at the bureaucratic conservatism that Mr. Watanabe believes lies at the heart of the "old, old LDP." For Mr. Watanabe, bureaucratic rule — to which the LDP is wedded — lies at the heart of the country's inability to cope with the once-in-a-century crisis facing Japan.

In a recent issue of Voice he wrote of the shift to a "postmodern" moment, arguing that Japan is in the midst of one of several great transformations, in the mold of the transitions to the Heian, Kamakura, and Edo periods. Arguing that a "once-a-century storm" requires a "once-a-century response," Mr. Watanabe advocates the wholesale transformation of the Japanese state, starting with administrative reform and the eradiction of amakudari. He further advocates decentralization and the consolidation of prefectures into states as a means of depriving Kasumigaseki of power — and with the reorganization of local governance, he suggests that the capital should be moved, as in earlier great transformations. (This is hardly a new idea.)

He offered an expedited version of this article in both his statement of secession and his Tuesday press conference.

The LDP may yet offer further confirmation of Mr. Watanabe's argument that the LDP is incapable of implementing the reforms Mr. Watanabe believes necessary to save Japan from ruin. As Uesugi Takashi argues in the February issue of Voice, the LDP may once again fight over the future of the road construction fund during the ordinary Diet session. For Mr. Uesugi, the road construction debate lies at the heart of the LDP's downfall. The road construction tribe has persistently blocked efforts not only to shift funds from road construction to other, less particularistic ends, it has blocked reform more generally. Surely behind obstruction to Mr. Watanabe's efforts to promote administrative reform lies the hand of the road tribe, for any serious attempt to uproot amakudari would be a blow to the construction companies, the bureaucrats responsible for the contracts, and road tribe members themselves. Aso Taro may become only the latest in a series of LDP prime ministers forced to back down in the face of resistance from the road tribe. Naturally while the media and the public busy themselves with the possibility of rebellion by reformists when the 2009 budget comes to a vote, the road tribe will be quietly looking for ways to water down Mr. Aso's promise to suspend the special fund and redirect the newly created "fund for the creation of a foundation of rural vitality" towards road construction funding.

Of course, it does not do to simply demonize the LDP's longtime reliance on public works spending (which some Americans have begun to do in anticipation of the Obama administration's stimulus plan). The LDP came to rely on public works as what Margarita Estévez-Abe has called a "functional equivalent" of welfare and unemployment assistance, a method of public support that also produced public goods for rural areas while conveniently solidifying the LDP's political position in rural electoral districts. As Estévez-Abe argues, the LDP essentially farmed out welfare provision to small companies, enabling Japan to create a welfare state without a large public sector or an unsustainable public debt for much of the postwar period:

Instead of aiding firms to shed their redundant workforce, the Japanese welfare state subsidized employment of excess labor — in both large and small firms. Rather than creating a large public sector — which would have benefited the opposition parties — or an extensive active labor market to pool and train redundant workers, Japan subsidized private sector employment instead. Japan's 'socialization' of capital was a crucial piece that made the system work. It allowed the state to invest in public works beyond its tax revenue. It also permitted private firms to function as primary welfare providers by shielding them from financial pressures. In short, Japan's small social welfare spending and its weak organized labor did not yield a form of laissez-faire capitalism. On the contrary, postwar Japan pursued a brand of capitalism, where economic units — that is, firms — were very much treated as units of welfare provision as if under a socialist regime. Furthermore, state intervention to protect businesses in Japan perpetuated the presence of a large number of inefficient firms. (Welfare and Capitalism in Postwar Japan, 198.)

The problem therefore is not that the road tribe is the mastermind behind a sinister conspiracy to wreck Japan. It's that this form of social protection — targeted at both firms and individuals located in rural Japan — is antiquated, and that continued efforts to perpetuate this system delay the construction of a more conventional welfare state and make life worse for the Japanese people.

The "redundant" worker who might at one point have worked in small construction company somewhere far from Tokyo is now a temporary worker struggling to find work in urban Japan and living without benefits. The Japanese state, having broken the bank in the 1990s, is no longer able to protect the small firms and their host communities with public works. Little wonder that Japanese firms, deprived of government support, are failing in the face of the global financial crisis. Bit by bit the old system is crumbling, but efforts to prolong its life have unfortunately made it difficult for the government to build a new system in its place.

But the road tribe, their local politician allies, the construction companies, the bureaucrats: they have all been doing what they can to preserve a system that played an important social role for decades. They might be acting out of self-interest, but it is hard to expect them to do otherwise. The time has come, however, for a new system that ensures that public funds are directed to those most in need of it, that public funds are used to create a new safety net that ensures that failing to secure a permanent position in a major corporation is not a sentence to a lifetime of penury and economic insecurity. Japan is in urban country — it needs to a universalistic system that reflects its demographics. Creating a universalistic system should not mean tossing rural areas on the rubbish heap, but Japan must discard a welfare system that now provides support to an increasingly narrow segment of the population.

The LDP, torn between advocates of a new system and defenders of the old, has been singularly incapable of doing what must be done to develop both new sources of wealth and new means of protecting the public. It is for this reason that Mr. Watanabe left, and why Mr. Watanabe is right to argue that questions of public welfare are inseparable from the question of administrative reform. Defenders of the old system, unwilling to surrender voluntarily, must be defeated if a new system is to be created. Of course, it is for this reason why the LDP must be defeated in the 2009 general election.