From Those Wonderful Folks Who Bring You...

Banzai! Banzai! Banzai! The echo from 50 voices shouting as one shattered the early-morning calm in the First Life Insurance Building, Tokyo headquarters of Yoronotaki K.K., Japan's largest fast-food franchiser. A few rays of sunlight filtered through the shaded windows, forming tiny yellow spotlights on the two rows of Japanese office workers, the men with white shirts and dark ties and the women wearing light-gray smocks over their street clothes. They stood stiffly at attention, backs straight, arms by their sides with fists clenched, eyes front-- like 50 life-sized toy soldiers, made in Japan.

Banzai! Banzai! Banzai! Each cheer was punctuated with a crisp salute, 50 pairs of arms reaching for the ceiling. Fifty minds dedicated to carrying out the company credo, which they shouted at the top of their lungs: "Work Hard! Work Quickly! Be Precise! Smile!"

Kunio Inoue, a young Japanese broker and my companion-translator, was visibly shaken. "I've never seen anything like this before," he gasped softly, wiping his forehead with a fresh handkerchief. The Berkeley-educated Inoue knew that most Japanese companies had some kind of ritual that accompanied their day's work: five or ten minutes of group exercise in the morning, recitation of the day's work objectives, an afternoon tea ceremony or singing of the company song. But what we found that morning at Yoronotaki both shocked and frightened him, as it did me. It wasn't a ritual. It was a way of life--a vivid exercise in Orwellian group-think.

I had heard from a Japanese journalist friend that the secret of Yoronotaki's success might be its unusual methods of operation, employee relationships and corporate philosophy. He refused to say anything more, except that I should go and see it for myself. It all sounded rather mysterious, so I went.

I arrived at Yoronotaki's corporate offices for my appointment promptly at 8:30 that morning and I was warmly greeted by Itsumi Ueda, managing director. A man in his early 40s, Ueda had been around enough Westerners to know that they traditionally shake hands but was enough of a Japanese to bow almost routinely. Not knowing quite what to do myself, we compromised, bowing politely to each other and shaking hands on the way down.

There was something else distinctive about Ueda. He was a three-star general. Not a real one, of course. But Yoronotaki, it turned out, is organized and run from top to bottom in the military fashion. All employees, from the waitresses who work in the franchised outlets to the top management people, wear a small, olive-green old-imperial-army pin with their name and rank inscribed on it. There are 40 ranks, from private to three-star general, Ueda told me proudly.

A two-minute-warning bell sounded at 8:43 A.M. Papers were shuffled and desk drawers slammed shut as the office workers cleared their desks and made last-minute preparations for the morning inspection. Exactly two minutes later, a second bell rang and everyone quickly fell into two evenly spaced ranks of 25 each. Facing them was a solemn-faced section head who quickly barked out orders like a Marine drill instructor.

"Attention!" snapped the D. I. Fifty bodies sprang to attention with a sharp click of heels. Roll was called and each employee acknowledged his or her name with a crisp, staccato "Hai!" ("Yes!"). The orders of the day were read, followed by words of encouragement. "This company will shine in the history of Japan because of what it does. It is up to us to provide the kind of leadership to make our families happy, our company grow and our country flourish." And, with a furtive glance over to where I was standing, he added, "The whole world is watching you."

About ten minutes later, after a series of rousing pep talks by various section chiefs, the morning ceremony came to a close with a chorus of the company song, led by a young fellow who stood with his feet apart, back arched, right hand on hip and his left holding an old samurai sword, which he pumped up and down in rhythm with the martial beat of the song. Then, before you could say "Banzai!," it was over as suddenly as it started. The dismissed "soldiers" scampered back to their desks to mull over new ways to sell more sake and sukiyaki for the honor and glory of Yoronotaki.

Later, over a quiet cup of tea, the company's founder, Tokichiro Kinoshita, explained the reasons for all this. Tokichiro Kinoshita is not his real name but that of a famous samurai warrior-ruler who united Japan 400 years ago, invaded Korea and had dreams of conquering Asia and Europe before being driven off the mainland by the Mongols. Only a few close friends and associates even know the founder's real name or true identity. Moreover, he and most Yoronotaki executives embrace the religious philosophy of Soka Gakkai, an aggressive Buddhist sect dedicated to hard work, success and achievement--concepts deeply rooted in the Japanese character.

"We believe the military system is the best way to instill discipline and a sense of dedication in our employees," said Kinoshita. "In a sense, we are like Japan itself. Small, isolated from the rest of the world for centuries, we must unite to achieve a common goal. We must act as one if we are to grow and prosper."

Grow and prosper. Unite to win. That's what Japan is all about.

But it wasn't too long ago that Made in Japan meant a ten-dollar transistor radio, a plastic gun that broke when you dropped it, a doll whose eyes never seemed to look in the same direction, a zipper that was always coming untracked or any one of the hundreds of cheap items, trinkets and gadgets that flooded the American market. Japanese companies begged, borrowed and bought everything they could to put them on a competitive footing with U.S. companies. They even tried to steal Coke; one company peddled a soft drink it called Nippon Cola, packaged in bottles identical to those of Coca-Cola, until a Japanese court stopped it.

Now, however, those three little words--made in Japan--have become a symbol of Nippon's burgeoning economic might and technological progress. Germany, already far behind Japan in steel production and shipbuilding (Japan turns out half the world's annual tonnage), will possibly drop to third place in automobile production this year. Similarly, 30 percent of all foreign electrical goods sold in the U. S. ten years ago came from West Germany. Today, 50 percent are Japanese made and the German share has sunk to six percent. The success of Nikon cameras also has the Germans drooling. In the U. S., increasing numbers of Toyotas, Datsuns and Colts on the highways have forced Detroit to counterattack with its own small economy models. Even so, Nissan Motors, the Datsun maker, is considering opening a small-car-assembly plant on the U. S. West Coast. Manufacturers of Japanese calculators own more than half the U. S. market for such items. And the Japanese are already selling computers to the United States that were made in Japanese factories with Japanese technology, independent of IBM or any other foreign manufacturer.

Despite the ten-percent surcharge tacked onto U. S. imports by the Nixon Administration from last August to December, the excess of Japanese imports over U. S. exports to Japan in 1971 is believed to have nearly doubled the previous year's staggering 1.4-billion-dollar trade deficit, the biggest ever for any country. What's more, as America withdraws from Vietnam, the Japanese are quietly moving in. During the past two years, Japan has extended more than $25,000,000 in economic aid and has invested $3,000,000 in private capital in South Vietnam. Half a million Hondas, Yamahas and Suzukis purr along South Vietnamese roads, and Sony radios are everywhere. Vietnam is said, in fact, to have a "Honda economy." And in other parts of Asia, they refer to the enterprising Japanese businessmen as "the ugly Japanese" or "the yellow Americans."

In short, Japan has achieved through industry, trade and a rock-hard currency what guns and generals failed to win during World War Two. That old imperialist dream of a Greater East Asia Co-Prosperity Sphere stretching from Manchuria to Burma appears modest by current-day realizations. Some Western economists are still predicting that Japan, already number two in the free world with a gross national product exceeding 200 billion dollars, will have the world's biggest economy by the end of this century.

But Japan's claim to the next century may be premature. Nippon is currently in the throes of a serious economic recession; business is stagnant and is likely to remain so for most of 1972. Some 15,000 companies, most of them small, family-owned subcontractors of large manufacturing firms, went bankrupt in 1971, and the number is growing with each (continued on page 162)Wonderful Folks...(continued from page 152) month of the new year. Electronics companies have found themselves with huge inventories of color-television sets, stereos, radios and calculators, unwanted at home or abroad. Production targets in steel, automobiles and chemicals are being revised downward in anticipation of a slower expansion of the economy in the next three or four years.

Japan also no longer enjoys a seller's market abroad. International monetary pressures have forced the value of the Japanese yen to float up by as much as 10 to 15 percent in relation to other monies, a move that has effectively made Japanese products more expensive on the world market. In reaction to Japan's export blitz of the past few years, both the United States and Europe have become more restive--or perhaps hostile would be a better word. Economic relations between the U.S. and Japan reached a nadir last summer when President Nixon imposed the ten-percent surcharge on imports, which was directed mainly at Japan, and with much arm twisting and acrimony, wrested an agreement from Japanese textile producers to "voluntarily" limit their sales to the U. S. Across the Atlantic, the picture hasn't been any brighter. The cool and sometimes antagonistic reception accorded Emperor Hirohito during last October's 18-day visit to Europe--where he was greeted with stony silence from crowds in London, threatened and jeered at by demonstrators in Holland and attacked as a "war criminal" by the West German press--was as much a protest against Japan's rising economic power and political influence as it was a manifestation of bitter memories of World War Two.

Ironically, the end result of all this may be the one thing Japan's critics fear most--a stronger, more powerful Japan. "The current business recession and pressure on the yen may be a blessing in disguise," observes James C. Abegglen, president of the Boston Consulting Group of Japan. "It will weed out marginal producers, particularly in textiles and electronics, streamline industry and force the country to re-evaluate its economic priorities."

The elimination of inefficient industry would eventually release thousands of workers who could provide the manpower companies need to assume a more commanding position in such fields as petrochemicals, complete plant construction, computer equipment and industrial automation (an area in which the Japanese have already taken the lead over the West). Another possible future outlet for Japan's industrial energies is commercial jet aircraft. The Nippon Manufacturing Company has already approached U. S. aircraft producers about the possibility of a joint venture to produce Japan's first medium-range jet aircraft.

In any case, the Japanese have little reason to cry in their Kirin beer over their current economic plight. What it boils down to, basically, is that instead of the 12-to-14-percent annual growth of the Sixties, the Japanese will have to be content with an economy that expands by only eight to ten percent in the Seventies. That's still around twice the growth rate of the United States and major European countries. As Kenzo Nakayame, the head of Mitsui Bank's research department, notes: "The latent growth potential of Japan's economy is very great and we expect it to remain that way for some time to come. In other words, we expect to continue to grow and expand and play a larger role in the world economy in the future." If nothing else, the past quarter century has demonstrated the remarkable ability of the Japanese to adjust and adapt themselves to changing economic conditions, to compete and to win.

Many of the reasons for Japan's economic prowess are fairly well known. World War Two gave the Japanese a chance to start anew with the most modern equipment and technology American-aid dollars could buy, not to mention the billions of yen Japan saved by not having to defend itself. And military procurements during both the Korean and the Vietnam wars aren't to be sneezed at, either.

Automation and a high level of modern industrial know-how have been big pluses, too. During a visit to Nagoya, I took a 30-minute detour to Toyota City to visit one of the company's automatic-transmission plants. Typically spic and span, with floors recently washed and fresh red chrysanthemums and white orchids spaced along the assembly line, the plant was churning out 4000 engines and 3000 automatic transmissions daily with only 200 workers, evenly divided into two eight-hour shifts. The men are needed only for the final assembly work: Put a bolt in here, twist a screw there. The real work is automated. Massive, growling machines and conveyor belts faithfully and efficiently follow the push-button orders of their human overlords from start to finish.

Even the electronics industry, which is still largely dependent on hand labor for mass production, has been able to specialize and simplify jobs to such an extent that housewives who might not know an integrated circuit from a transistor can be trained for part-time jobs in a matter of days. Automation has propelled Japan to the top in world shipbuilding, and its steelmakers' use of computers in production is among the most sophisticated in the world. Little wonder that Russian, French and British steelmakers are beating a path to Tokyo.

And let's not forget the high educational level of the Japanese people nor the well-known innovativeness and adaptability of Japanese industry. The Japanese have proved only too well that they possess a remarkable talent for taking someone else's idea, changing it, improving it and achieving world-wide success with it. The transistor may have been invented in the U. S., but it earned its battle ribbons in Sony radios and Panasonic tape recorders. Two decades ago, Du Pont sold its nylon-fiber technology to Toyo Rayon--today one of the world's top producers of synthetic fibers. Keeping up with the Japanese is half the battle for foreign businessmen.

After an era of importing technology, the Japanese are now concentrating on developing their own. "Compared with Du Pont," says Hideo Shinojima, president of Mitsubishi Chemical Industries, "it might appear that Japanese firms do very little in the way of research. But what we have done is to apply the sukima, or gaps, theory. We look for those technological gaps that are sometimes overlooked by U. S. and European firms. By concentrating our manpower and resources on only a few specific areas, we are able to develop some unique technology."

Furthermore, as the Japanese develop more of their own, they are increasingly able to import more foreign technology through cross-licensing deals rather than straight purchase. Understandably, foreign companies--often hit hard in the past when their Japanese-purchased developments turned up later in their own markets--are more willing to release their patents in exchange for some Japanese innovations.

Perhaps more at the root of Japan's prosperity than technology and trade, however, is the nation's peculiar economic structure. Despite a ritual bow to Western-style capitalism, Japan has an economy so tightly regulated and planned by the government that it makes the Russians look laissez-faire by comparison. The banks own almost everything and over them squats the imposing government central bank--the Bank of Japan--which "advises" them on what they should do with their money.

A kind of monetary Darwinism is in effect: Those "sunrise" industries deemed the fittest to survive are protected and helped to grow, while the weakest, or "sunset," industries are left to die. Companies are floated on a sea of notes and only recently have turned to securities as a means of raising capital. Thus, the average debt-to-equity ratio of Japanese corporations is 80-20, just reverse that of their U. S. counterparts. American businessmen negotiating joint (continued on page 197)Wonderful Folks...(continued from page 162) ventures with Japanese companies complain that they spend more time talking with bankers than they do with company officials.

What makes that debt-to-equity ratio possible--in fact, what makes the entire Japanese industrial effort successful--is the extraordinary, highly effective but often outrageous collaboration between government and business. So close are their ties that the business-government setup is regarded as a corporation, which foreigners have dubbed Japan, Inc.

Japan, Inc., operates as if it were a giant multidivisional company. The government is corporate headquarters, where all planning, long-term policy and investment decisions are made. The large corporations--such as Mitsubishi, Matsushita and Nissan--are operating divisions, free to make their own decisions, compete with one another and direct operations, but only within the framework set down by corporate headquarters.

"Government and business are different sides of the same coin," explains Robert J. Ballon, a Belgian Jesuit who heads the finance department at Sophia University in Tokyo. "In the West, government and business are usually at each other's throats," he says. "In Japan, business looks upon government as a close relative." The difference, apparently, is that where Western society is built on confrontation, Japanese society is built on harmony and compromise.

However you look at it or whatever you call it, it works. No Japanese company enters into a joint venture with a foreign firm without close guidance from the Ministry of Finance, the Ministry of International Trade and Investment (MITI) or the responsible government agency.

In a typical show of unity between government and business, the top brass of all the country's automobile firms gathered at a mountain resort near Tokyo a few years ago to draw up a joint statement of support for the government's policy against relaxing restrictions on foreign investment in the domestic automobile industry. They also pledged to cooperate with one another whenever possible to avoid any assistance from foreign firms. Just imagine the Justice Department's reaction if Detroit's big three were to meet at an Iron Mountain ski lodge to discuss industry problems and Government policy.

In some ways, Japan, Inc., leaves the government open to charges of corruption. It is implied in MITI's "case-by-case" approach to granting business requests. "What it often means is that if you have the right connection, wine and dine the right officials, bring about enough pressure, your request will be granted," one U. S. businessman claims. "If you have enough money, you can get away with anything there."

Not surprisingly, business contributes heavily to politics, and politicians, in turn, attempt to sustain a booming economic environment so that business can profit. Government officials retire and go to work in business, where they use their influence and contacts to get special treatment. Japan's securities industry boasts several ex--finance ministry officials, and many former MITI officials turn up in the hierarchy of trade organizations.

So close is the bond between government and business that Premier Eisaku Sato himself commands the total Japanese export offensive; he heads the Supreme Trade Council, a group of top business and government leaders that quietly slices up the world market and sets annual goals for every major product and country. Once these goals have been set, companies launch an attack on foreign markets with the precision of a well-oiled military machine. First, strategy is laid and a battle plan drawn up; then a reconnaissance patrol is dispatched, usually four or five men, to scout the territory and probe for weaknesses in the enemy's defenses; finally, the main assault is launched to close the deal and start up the business. Japanese executives leaving for foreign countries are seen off at Tokyo International Airport with all the ceremony accorded a departing government delegation. Newspapers record their "heroics" with bold, black headlines--but reserve words such as invade and attack to describe moves into Japan by foreign companies.

At Toyota City, auto workers are prodded to work harder with posters and maps placed along the assembly lines showing the latest tally of Toyota car sales around the world. Mitsui trading-company workers in overseas offices have been known to sleep by telex machines, waiting for important instructions from their head office or for confirmation of a deal just concluded in some remote part of the globe. One Japanese mining-company representative received accolades from his colleagues when he escaped from an African nation in the midst of a civil war with maps of important mineral discoveries stitched into his underwear. Perhaps the best demonstration of this mercantilistic Messianism is the song sung each day by Matsushita workers:

For the building of a new Japan

Let's put our strength and mind together

Doing our best to promote production,

Sending our goods to the people of the world,

Endlessly and continuously,

Like water gushing from a fountain.

Other companies have gone to even more extreme lengths to prod their employees into action. To infuse its managers with the selling spirit, Toshiba used to send them to a secluded mountaintop resort, where they were put through round-the-clock pep sessions, shouting morale-boosting slogans such as "Sell!" or, for the more ambitious types, "I will be president!" until they were near exhaustion. Toshiba finally had to drop the scheme in the wake of public criticism.

Such heavy prodding reflects one very simple fact: Left to themselves, the Japanese really don't work very hard. This is probably one of the first paradoxes about this amazing country that a foreigner runs into during a visit to Japan. The average worker produces only about half as much as a West German and one fourth as much as an American. Visit any big Japanese office building and you'll often come away with the feeling that the hustling horde of white-shirted office workers is engaged in busy work--but not work that seems particularly productive or necessary, just something to keep everybody occupied. People will spend hours in tiny conference rooms, sipping tea and talking with visitors or friends. Staff meetings will go on interminably, with employees debating, analyzing and discussing nonessential points.

Many foreign businessmen complain about the robotlike mentality of the Japanese worker and his reluctance to take the initiative. One American manager was perturbed to discover that an accountant had spent two days checking and rechecking a set of incomplete figures. "He knew they were incomplete and that he would never get the right answer until they were complete," said the exasperated manager, "but he didn't think it was his job to ask for the full information." Others find office workers moody and erratic in their work patterns. Chie Nakane, a professor of Asian studies at Tokyo University, observes, "In the U. S., workers seem to maintain a minimum level of efficiency regardless of how they may feel. But the Japanese worker, if he's in a comfortable mood, will work hard; if he is feeling blue, he won't."

Because of this apparent fact of Japanese life, companies reward their employees with jobs for life and opportunities for title or position in return for hard work. Such rewards are very important to the status-conscious Japanese. So there is an additional range of fringe benefits that few socialist countries could match. Japanese executives have a concerned but not patronizing way of talking about their employees, as if they were their children. "The government does not provide enough social benefits," explains Takeshi Asozu, Matsushita's personnel chief. "It is Mr. Matsushita's duty to take care of his employees, his responsibility to bring them up and train them."

Matsushita does just that--and provides the ultimate in womb-to-tomb benefits. Employees can have their children born in a Matsushita hospital, get married in a Matsushita chapel, live in Matsushita housing or buy a home of their own with a Matsushita loan. The company pays employees' commuting expenses, subsidizes meals, supplies shoes, caps and uniforms and, later on, will even provide free flowers, candlestands and other equipment for their funerals. All this, plus the twice-yearly bonuses that other Japanese firms hand out.

Matsushita even throws in a little more. Recognizing that workers are occasionally down in the dumps, due to domestic problems or job pressures, the company maintains what it calls "the room of self-control," stuck away in the corner of its dry-cell-battery plant near Osaka, where employees can let off steam. Leading to the room is a maze built a little like the old Fun House at Coney Island. White footsteps are painted on the floor to guide the visitor through its labyrinthine corridors, which are decked out with large distorting mirrors on the walls.

"The idea is to make the worker see that his problem might simply be one of perspective," explains a Matsushita guide. "It makes him feel like he is seeing himself through another's eyes."

At the end of the maze is the room, equipped with a punching bag. a bicycle exerciser and other gym equipment, plus two man-sized, mustachioed black-canvas dummies, which an ill-disposed worker can beat to death with a short wooden club. Please hit with a full swing, a sign over the dummies encourages. Employees break about one club a week whacking away their frustrations. "If that doesn't help," says the guide, "they can see the company doctor."

In return for this cornucopia of benefits from their corporate fathers, most Japanese employees work long hours five and a half days a week and seldom take a vacation, even though they're entitled to an annual two-week holiday with pay. This fiduciary-based family relationship also explains why there are few serious strikes in Japan. Labor unions are organized vertically, by enterprise, rather than horizontally, by trade, as in the West. Thus, as members of a "company union," workers realize that neither they nor their employers will benefit from a prolonged walkout. As a result, when the end of the business year pops up and it's time to demand a wage hike, employees will often "strike" during lunch hours, after work or on holidays. A really serious strike may last a few hours.

American companies in Japan haven't been so lucky, mainly for political reasons. Jersey Standard's Esso refinery was hit by a ten-day walkout in 1969, the first major strike against a foreign company, and U. S. banks are frequently harassed by Gaijin-rU+014D, a Communist-dominated clerical union that has dragged everything from Vietnam to Okinawa into negotiations with U. S. financial institutions.

A few years ago, American Express Bank tried to fire a Japanese telephone receptionist because she couldn't speak English well enough. Gaijin-rU+014D turned her case into a cause célèbre, adding a charge or two of Yankee imperialism, and has been harassing the beleaguered company off and on ever since, despite the fact that the woman in question was rehired long ago. Fortunately, only a few Amex employees are members of Gaijin-rU+014D, so the bank continues to function. But usually about once a week, union radicals armed with posters and hand speakers will troop into the bank's Tokyo office, chant slogans, sing a song or two and then pack up. "It's like a circus around here," comments one annoyed Amex employee. Amex' office looks as if it were permanently decorated for the Japanese New Year; bright Gaijin-rU+014D posters hang from the counters and walls, side by side with white Amex placards explaining the bank's side of the dispute.

From time to time, these unions present a minor threat to Japanese businesses, but a much more far-reaching concern of Japanese industrialists is the growing labor shortage. A recent estimate of unfilled job openings was 670,000, and the pinch isn't likely to ease much in the immediate future. Yet while the mammoth business combines, or zaibatsus (the Mitsuis, Mitsubishis and Sumitomos), are suffering somewhat, it's the Watanabes and Ishikawas (the Smiths and Joneses) who are being hardest hit. Caught in the squeeze between Japan's rising labor shortage and its rising wage rate, the small service businesses and cottage industries serving the giants are being forced to cut service, merge with one another or simply go bankrupt.

The shortage is in both unskilled and skilled labor, and competition for both is increasingly intense. At one end of the scale, the factory worker is starting to job-hop more than he ever used to and most industries are noticing a slow but steady increase in labor turnover. Women are being actively wooed to help fill the gaps created by the shortage, with some firms establishing "marriage bureaus" at factories in rural areas to lure husband-seeking women.

At the other end of the scale, the university graduate is in high demand and becoming choosier about what he does rather than whom he works for. "Years ago, working for a big bank like ours was considered a great honor," says M. Segawa, secretary to the chairman of Fuji Bank Ltd. "But today we are having difficulties hiring girl clerks, because they don't want to work overtime, and university graduates, because they don't like the idea of having to go out and solicit deposits." (In Japan, banks actively seek business, sending flowers, cards or telegrams on special holidays, birthdays and times of illness. They also send out young solicitors who have to scramble and fight among one another to try to get a deposit. Sometimes they even manage to cry a few tears in hopes of swaying a prospective client.)

As a result of the labor problem, the competition among companies for talent is becoming fierce. Sony, something of a maverick in Japanese business, shook the establishment a few years ago when it started running annual ads urging workers at other companies to leave their jobs and go to work for it. Akio Morita, Sony's president and cofounder, estimates that the advertising brings in 400 new workers each year from companies where lifetime employment and a promotion-based-on-seniority policy stifle young hopes for quick advancement. "We simply ask a man to show us what he can do and we will take him, regardless of age," says Morita, who at the age of 50 is one of Japan's youngest chief executives.

Other companies turn to older, more traditional ways to cope with the changing attitudes of youth. Many businessmen are openly critical of what they consider the permissiveness of high school and university teachers toward students and they condemn the much-touted coming age of freethinking and individuality as nothing less than heretical, unhealthy and definitely unproductive. And some will go to rather bizarre lengths to root out these evils.

Take Canon, Inc., the camera maker, which has devised an exhausting 30-hour "concentration course" for new recruits. They take a hammer and a chisel and bang away at a piece of iron hour after hour, keeping time to the shrill whistle of an instructor. Since they don't always hit the chisel, their hands are usually battered, bruised and bloodied by the end of a session. The idea, a Canon spokesman says, is to instill "spiritual backbone" into the new recruits. "It is during the chisel-work period that their false sense of 'freedom' gained at schools is stamped out." remarks Y. Ueda, Canon's chisel-faced chief instructor. "Untamed creatures in the beginning, they suddenly become docile and easy to handle after the hard practice."

Oblivious to what others might think of the training, Canon delights in giving visiting foreigners a look-see at this slam-bang course. Company officials were surprised when a group of visiting French ladies nearly fainted from the cacophony of hammer against iron and the sight of bandaged hands. "Canon instructors simply do not take the hand bruises seriously," a company PR release reassures, "since they know through their experience that bruises disappear after a brief iodine treatment."

With or without iodine, most foreign companies based in Japan don't go in for such training sessions nor, for that matter, many other Japanese rituals. "A lot of foreign companies come here and immediately start tossing out a lot of the rituals and ceremonies practiced by Japanese companies without realizing that the Japanese are smarter than they give them credit for," observes George L. Hegg, senior managing director of Sumitomo 3M, a joint venture of the Japanese and the American companies of the same names. Foreign firms will eliminate as unnecessary, for example, the five minutes of exercise that Japanese businesses often hold before the start of a working day--without realizing that it is, in effect, a devious way of getting employees to work five minutes earlier.

Other American companies extend the customary Japanese retirement age of 55 to the American-style tenure of 65. "They usually regret it later on," Hegg explains. "You accumulate a lot of executive deadwood under a lifetime-employment system. So this only prolongs the agony another ten years for the American managers. The Japanese employee loves it because it gives him another ten years of salary he wouldn't have had with the Japanese employer." As for capable senior executives, most Japanese companies will put them on a year-to-year contract after retirement at salaries usually lower than they had been making. And no fringe benefits, either.

The Japanese habit of making important decisions by group consensus rather than executive fiat also taxes the patience of Western businessmen. A proposal moves slowly through the bureaucratic layers of Japanese firms, with each department chief or section head putting his stamp of approval on it before it's finally executed. "But once the Japanese decide to go ahead with something," says Howard Van Zandt, vice-president of I. T. T. Far East, "they move incredibly fast and with all the collective strength they can muster."

Even more perplexing is the accentuated sense of place or rank Japanese executives exhibit in negotiating with foreign firms. Seating arrangements are precise and in order of rank. You can spot the hierarchy in the way a group of Japanese seat themselves at a conference table: the head man always directly facing his foreign counterpart.

There are, of course, amusing side lights. During critical talks between Chrysler and Mitsubishi Heavy Industries regarding a joint venture, the head of the Chrysler team entered the conference late and took a chair across from the Mitsubishi chief negotiator but one seat to the Japanese's right. One by one, the three other members of the Mitsubishi team seated next to their man left the conference room on various pretexts and returned, each moving down one seat until a vacant chair faced the Chrysler executive. A brief "tea break" was called and when the two teams resumed talks, the Mitsubishi negotiator had taken the seat directly across from the Chrysler official.

An even more curious incident occurred between two American and Japanese chemical companies over an alleged patent infringement by the Nipponese firm. In a last-ditch effort to keep the matter from going to court, the two firms agreed to meet on neutral ground on the second floor of a vacant office building. Prenegotiation negotiations over who would and wouldn't attend the meeting were hot and sticky. "It was a little like the North and South Vietnamese arguing over the shape of the Paris peace table," an American executive recalls. The Japanese objected to the presence of a certain American attorney but agreed that he could stand in an adjoining room with his ear to the door so he could hear the conversation. Another American stood in a parking lot next to the building, waiting for a signal to go into the building in the event the Japanese side decided to call in its own reinforcements. It was all very ridiculous, but it did save the matter from going to court.

"You Can See All of Japan," boasts the advertisement for the Hotel New Otani's revolving cocktail lounge. Perched 400 feet above the ground like a giant glass-and-aluminum bird's nest, the lounge makes a 360-degree sweep of Tokyo's skyline about every hour. But most days a heavy cloud of photochemical smog hangs low over the city, slicing the 1089-foot Tokyo Tower at its waist.

"This country is literally choking on its G. N. P.," a young economist with the Japan Economic Research Center tells me over a Scotch and water. "We may have the world's third-largest economy, but we rank thirteenth in per-capita income, ahead of Italy." A great deal must be done at home, he believes, before Japan reaches the stature that so many Westerners are predicting. More G. N. P. will have to go for social benefits, housing, pollution abatement and other measures to raise living standards. "Japan may be the biggest in terms of G. N. P. by the year 2000, but the next century might belong to someone else."

If pollution is a yardstick, the problems facing Japan in the years ahead seem immense. By all counts, it is the most polluted nation in the world. "Garbage and the gross national product of a country are closely related," a survey by the Tokyo Metropolitan Government stated recently. Some observers even joke that, in Japan, G. N. P. stands for gross national pollution.

You can toss a coin to establish exactly which city is the most polluted in Japan. Delegates at an international conference on pollution in Tokyo in 1970 were so uncharitable as to designate Fuji City "the most polluted city in the world." Uncharitable, that is, because few people have ever heard of the tiny town located at the foot of Mt. Fuji. But Fuji City was delighted. It put the city on the map.

Tokyo would probably get most people's vote. Smog is increasingly a problem, mainly because factories in the area burn heavy oil from the Persian Gulf, which has a high sulphur content. The result is that on most days, the air is thick with the smell of burnt oil. Add the exhaust gases of some 1,500,000 cars and you get an idea of the air-pollution problem. In fact, it's so bad that traffic policemen are required to return frequently to headquarters for oxygen inhalation. For 25 cents, a truly "gassed" individual can get a quick breath of unpolluted air from oxygen vending machines found in certain shops and stores.

Elsewhere, it's not much better. On most days, Kawasaki, the big industrial center a half hour's drive from Tokyo, is barely visible through the perpetual cloud of soot, smoke and gases that surrounds it. Another small Japanese resort town had to close its tuberculosis clinic because of worsening air pollution. In Kyoto, Japan's ancient capital city, hydrogen sulphide and sulphur dioxide from nearby plants damaged the 917-year-old bell of Byodo-in Temple so badly that it had to be removed and put in storage. Tourists visiting the Kyoto National Museum are shocked to see an original casting of Rodin's statue The Thinker covered with verdigris--greenishblue streaks caused by the exhaust of vehicles using a nearby highway. And more than a half dozen people have died from air pollution in Yokkaichi, an industrial town.

But the real horror stories are reserved for Japan's water. Bays near most port cities are dangerously polluted with deadly chemicals such as cadmium and organic mercury, and very few of Japan's major rivers are still clean enough for fish to survive. In Toyama Prefecture, some 130 people have been killed by cadmium poisoning caused by a nearby smelter. Local officials in Akita Prefecture were shocked to find traces of arsenic in 38 of that area's famous hot spas. Probably the most notorious incident occurred 19 years ago at Minamata Bay, where thousands of residents ate fish contaminated by methyl mercury dumped into the bay by Chisso Corporation, a chemical company. Japanese newspapers recently carried a picture of a 24-year-old woman who looked no bigger than a five-year-old. She had been bedridden for the past 19 years and is unable to speak, hear or see--a victim of Minamata Bay.

The Sato government responded by setting up a cabinet-level pollution-control agency last July, pushing tougher antipollution laws through the diet, including the power to arrest offenders as criminals. But Premier Sato has yet to demonstrate enthusiasm for enforcement. Also, with big business still feeling the effects of the country's economic recession, the government isn't expected to press companies too hard for heavy antipollution outlays this year.

Perhaps as a sign of changing times, the traditionally passive Japanese citizenry isn't waiting to see what the government will do. It has taken matters into its own hands, through demonstrations and picketing at offending companies, lawsuits and Ralph Nader. America's consumer crusader was in Japan last year and spent about a week touring the country for a close-up look at the pollution. His aim was to get publicity, filling Japanese newspapers with his analyses and suggestions. But he made two mistakes. First, he went as a guest of The Daily Yomiuri, Japan's second-largest newspaper. Japanese newspapermen, being a sensitive and competitive lot, refused to cover press conferences staged by a rival paper. His second mistake was expecting to talk extensively with anyone in industry or government about the problem. Toyota and Nissan were afraid to meet with him and refused interviews. The closest Nader got to Premier Sato was the entrance of the Foreign Ministry, where he dropped off a letter outlining his thoughts on Japan's pollution problem.

Nonetheless, Nader's visit couldn't have been more timely. Picketing and bad publicity were forcing several big companies to relocate their plants away from urban areas or to delay planned expansion. Antipollution activists were buying up shares of the offending companies' stock--in the fashion of Nader's Raiders vs. G. M.--and challenging corporate plans and policies. Housewives, angry at the dual-pricing policies of electronics firms that resulted in color-television sets' being sold at home for $100 to $150 more than those exported to the U. S., launched a nationwide boycott against the manufacturers. The companies finally cut their prices by 15 to 20 percent to ease an inventory swollen to an unmanageable 1,500,000 sets at the height of the boycott last spring.

Although consumer resistance has eased somewhat lately, it left its mark on the balance sheets of many companies: The profits of the big color-TV makers plunged by 30 to 40 percent last year. Perhaps even worse from their point of view, the boycott accelerated consumer consciousness in Japan. As a result, five powerful consumer associations, mostly comprised of housewives on the march for better and cheaper merchandise, have sprung into existence in a sort of late-flowering, kimono-clad women's lib.

But it's the military that's probably the most sensitive political issue in Japan these days, particularly in the light of the shifting defense posture of the U. S. in Asia and recent developments concerning mainland China. Few foreigners seem to believe that militarism is on the upswing, or that Japan represents a future threat to the West. The global nuclear stalemate and the simple lack of new colonies to conquer seem to preclude that. Yet Japan is rearming and defense is becoming big business. The nation's self-defense forces now total around 250,000 men with 1593 aircraft, 800 tanks, 4500 artillery pieces and around 520 small warships--a far cry from prewar days, but nearly four times as great as when it was formed in 1950. This year, Japan may spend more than one percent of its G. N. P. on defense, seventh in the world in military expenditures. And Japan's Defense Agency is urging a five-year build-up plan that would cost 14.43 billion dollars, more than twice as much as the current five-year armament plan. Under this plan, Japan would add 420 tanks, 270 armored personnel carriers and 230 combat helicopters to its ground-defense force. Among other additions would be 86 vessels, including 19 destroyers, and 158 U. S.-style F-4 Phantom jets. The agency also plans this year to step up--perhaps even double--its weaponry purchases from the U. S. ($500,000,000 last year), mostly due to pressure from the Nixon Administration on Japan to shoulder a greater share of the defense burden.

While Japanese defense officials say that Japan will continue to rely on the U. S. to deter all-out wars, including nuclear war, they argue that Japan needs to modernize its weapons and build up its sea forces to maintain security for traffic in the seas around Japan. This need for a stronger self-defense posture, in the eyes of many Japanese, has been heightened by the gradual U. S. military withdrawal from Southeast Asia and the belief that Washington will remove all combat forces--more than 12,000 men--from Japan later this year. Moreover, the possibility of a détente between the United States and Red China, combined with the anti-Japanese tone of the Nixon Administration's economic policies, has increased the feeling of isolation among many Japanese. Naomi Nishimura, head of the Defense Agency, raised more than a few eyebrows last October when he suggested a change in Japan's defense policies to permit unarmed Japanese soldiers to go on rescue-and-relief missions in Asia.

A survey conducted by the prime minister's office in 1968 revealed that four out of five Japanese wanted their country to be able to defend itself without relying on a foreign power, especially the U. S. Faced with a narrowing domestic market due to declining population growth and increasing restrictions in key export markets, such as the U. S., businessmen are looking to the growing defense industry as a profitable new outlet for their corporate energies. Ninety percent of the self-defense forces' military hardware is stamped Made in Japan.

Defense contracts for 15 of Japan's largest industrial enterprises already top two billion dollars, a figure small in comparison with that of the United States or Russia, but one that will increase sharply in the next five years. More importantly, the defense contracts provide companies with a cushion during slow business periods such as Japan is currently experiencing. Indeed, some economists argue that without the existing level of defense expenditures, Japan would be in serious economic straits. "The defense industry will play a greater role in the future as a brake on recession." observes one Tokyo economist. "Just as the shipbuilding industry weathered the recession after the Korean War by building ships for the self-defense force, other industries will be able to ride out future business slumps by supplying equipment and materials to an expanded defense force." Some industrialists have called for a tripling of the country's self-defense forces and a few years ago one even urged that defense expenditures be boosted to a whopping four percent of the G. N. P.

Like young people everywhere, the young Japanese seem turned off entirely by the military. But they are a generation away from making the decisions that will determine which way Japan goes. By then it will be a moot point. Then, too, there is the strongly renewed sense of economic nationalism in the country. Five years ago, a Japanese businessman would seek the advice and counsel of his American partner, but not today. They have listened, learned and now are making their own decisions. It seems natural, but. ...

"Deep down inside, we believe we are the superior race," says Hideaki Kase, a young Japanese author writing a book about Japan's determination to be ichiban (number one) in the world. "It is a part of our historical and cultural tradition. Japan is the world's only great insular power. We have been cut off from other civilizations for centuries, and by choice. Like the Jews, we think we are the chosen people."

He told me that a Japanese magazine recently polled 100 of the nation's leading business executives and asked them to name the world's leading race of people. About 40 percent of them picked the Nipponese as ichiban and the Germans as the second best.

"We want to be master achievers," Kase added. "We are driven by the natori spirit, an obsession with gaining name or title. Japan wants to be number one because being number one is the most important thing. Like one of your football coaches said, 'Winning isn't everything. It's the only thing.' It is the same here. There is no second place."

At the airport, there is just time for me to pick up a few souvenirs and some reading material. The Japanese English-language newspapers are filled with articles about President Nixon's planned visit to Red China. That announcement last July probably caused Premier Sato more anguish than all of Nixon's new economic policies. In effect, the diminutive premier was caught backing a losing horse. For years, Japan had faithfully followed the United States' policy of generally ignoring mainland China; now it suddenly faced the possibility of being left at the starting gate. Sato not only failed to anticipate the new U.S.-China policy but didn't even have a new policy of his own with which to follow up the American lead.

At stake, of course, is Japan's economic and political future in Asia. There is little love lost between Japan and China. The Chinese still have fresh memories of Japan's brutal and bumbling occupation during World War Two, not to mention war-damage claims totaling some $50,000,000. While China has frequently condemned what it sees as a revival of Japanese militarism, what it really fears is Japan's burgeoning economic and political influence throughout the world. A rapprochement with the United States could, Peking might well reason, cause further friction between Tokyo and Washington and thereby isolate Japan.

True to their mercantilistic instincts, however, the Japanese see mainland China as the business market of the future and want to be first in line when the Chinese finally open their doors. Sino-Japanese trade is running around one billion dollars annually and is expected to grow fourfold in the next decade or so. Some 1200 Japanese salesmen attended China's Canton Trade Fair last October--the biggest contingent from any one country--and an even larger number is expected to go to Canton for this year's fair, where China transacts about half of its foreign trade.

Peking has laid down some tough conditions for Japanese companies wishing to do business with it. The Chinese want the Japanese to promise not to invest in South Korea or Taiwan, not to furnish technical assistance to either of these countries, not to supply arms or other assistance to South Vietnam or Cambodia and not to affiliate themselves with a U. S. company. Despite these prohibitions, many big Japanese manufacturers and trading companies are willing to pay the price for trading with mainland China. Nippon Steel, the world's largest steel producer, decided last fall to accept the Peking-imposed conditions and is now working on trade deals with the Chinese. And the Sato government may give permission to the Japan Export-Import Bank to finance the export of industrial plants to China--heretofore barred by an old agreement with Taiwan.

"Japanese to Seek Closer Chinese ties," one newspaper headline blurts out in bold, black type. "Japan-China Rapprochement," blares another. A week-old copy of The New York Times announces, "Japanese Expect China Trade Gains."

For a brief instant, I have a rather frightening fantasy: What if Japan and China cooperate rather than compete with each other? What would be the implications for the West of a Sino-Japanese concord? Imagine an Asia anchored by two "super-plus" powers: one a sprawling territorial empire embracing the biggest mass market and raw labor supply in the world; the other a tiny island nation with the kinetic energy, technical talent and winning spirit to put it all together. A China-Japan Co-Prosperity Sphere? The infinite possibilities of such an Asian alliance are enough to keep futurologist Herman Kahn scratching his head for months.

"Pan American Flight 800 for New York now boarding at gate number six," a tiny, doll-like girl's voice announces in accented English over the airport P. A. system.

As I start to leave, something at the newsstand catches my eye. It's a map. A Japanese map of the world, or a map of the world as the Japanese see it. Dead center, looming a little larger than scale, is the Insular Island. On the left is Europe, and on the right, on the other side of the Pacific, is the U. S. For a brief instant, there is a slight patriotic stirring in my blood. When I was in school, the world maps always showed America as the center of the world. But those maps were made in the United States. Maybe Rand McNally was wrong after all.