THE JAPAN THAT CAN SAY NO
                 The New U.S.-Japan Relations Card
            Akio Morita                  Shintaro Ishihara

1.0 THE NECESSITY FOR PRESENT DAY JAPANESE TO REFORM THEIR CONSCIOUSNESS
(Ishihara)

1.1 Japanese People Have Become Top Heavy
Each month, there is the Cabinet meeting for the economic report.  I am one of
those kinds of guys who gets up early and goes before the cabinet meeting,
which winds up by 9 a.m., or 8 at the earliest. While rubbing my sleepy eyes, I
go over the reports by the Bureau Chief of the Economic Planning Agency and by
the Director of the Bank of Japan.  Each month, the reports are almost
identical. Generally, the Cabinet ministers sleep through it.  When I suggested
to the Chief Cabinet Secretary that in this age of governmental administrative
reform, why not give up these meetings, the response, not entirely unexpected
on my part, was that these were absolutely necessary, even if there were some
Party executives who did not attend.

Thus, each month, there is a repetition of a nearly identical report.

The Bureau Chief of the Economic Planning Agency said this month, just as he
did last month, that the magnitude of Japan's surplus in international revenues
was tending to shrink.  In other words, this means he is saying that it is
perfectly alright for business not to be so good.  The Cabinet members all nod
and underline this in red.

Myself, I thought this was a really strange phenomenon, so I turned to the
Minister for Home Affairs, Mr. Kajiyama, who was sitting beside me, and asked
what was going on here.  Everybody is thinking it's just great that business
isn't prospering that much and eagerly red-lining that information.  Couldn't
you say, however, that a country like that won't last long?  Words, words -- if
the meaning of words keeps changing, you can never be really sure what is being
said. In other words, aren't our values changing?

If we take Japan's vast trade surpluses as one type of crisis situation, then
this points to the necessity of changing Japan's economic and industrial
structure.  While leaving undetermined for the moment whether or not the
conclusions of the Maekawa Report were valid, it is true that the
"comprehensive and vast" industries are tending to recede and the lean and mean
knowledge-intensive types are coming into their own.  When the term
"comprehensive and vast" (jukochodai) is applied to human beings, it is a form
of praise, while the opposite, "light and small" would be to berate the same.
However, when these terms are applied to the industrial structure, their
meaning has come to change.

What matters, however, is whether or not this is good. Should we all be at
ease, now that we are not dirtying our hands and sweating in order to make
things with our own hands?  Certainly know-how comes about from one type of
mental activity, and coming up with it is a work worthy of respect.  Looking at
history, however, in cases where the whole society of the country was using
their brains instead of their hands, not one has lasted to prosper today.  In
some sense, it may be true that the Japanese people are being forced into a new
historical experience, but can we go on now, as we are, thinking we are the
chosen people?

When looking at the actions of the Japanese people these days, I recall that
these seem similar to ET, the extra-terrestrial, in the Speilburg films. I feel
that it may well be the Japanese people will evolve into something like ET with
pronounced eyes and noses and a big head making them top-heavy, over an
abnormally thin body and slender arms and legs.

Therefore, it was impossible for Japan to get more than a few gold medals at
the Seoul Olympics, which many Japanese read as being abnormal.  While it may
be that this is a sign that a new people has arisen to make contributions in
other areas, it seems more natural to me that our descendants would be able to
continue to sweat and work to keep the country strong.

1.2 Japan's Advanced Technology Is at the Heart of Military Strength
This is something advocated by Mr. Morita, who is a company leader that has
driven Japan's advanced technology and who is known for manufacturing excellent
products.  He pointed out that the INF limitations (the restrictions on
intermediate range nuclear forces) was something that the Soviet and American
leaders came to each other on.  While this was an epoch-making event, it was
certainly not done because Americans and Russians had a new sense of the danger
of nuclear weapons, they were not acting from the standpoint of human morality.

There may be some people who took the INF negotiations as a sign that both
countries were beginning to act from their sense of humanity, but I think the
reason why they got together on this is different.

Whether it be mid-range nuclear weapons or inter-continental ballistic
missiles, what ensures the accuracy of weapons is none other than compact,
high-precision computers.  As everyone knows, current ICBMs use the MIRV
concept where there are multiple warheads.  When an attacking missile gets near
enough to be detected, the warhead splits into 8 or 9 separate heads. Not all
of them contain hydrogen bombs, however, some are dummies designed just to dupe
the enemy.

The remaining warheads lose speed, reenter from space, fall, run sideways and
follow complicated paths, but in the end, they hit the targets picked for them
by spy satellites and destroy them to within 1 second of latitudinal and
longitudinal accuracy.  For a Soviet ICBM, this would mean hitting the silo
containing the retaliatory ICBM in Vandenburg AFB California.

These silos go 50 or 60 meters underground and are strong fortresses having
thick walls of reinforced concrete.  If a direct hit is not scored upon them,
one cannot destroy the hydrogen bombs inside.  The equipment will not even be
affected as much as it is in an earthquake if a direct hit is not made.  Thus,
it is absolutely vital that a direct hit is made.

At the present time, Soviet technology allows these missiles to hit within a 60
meter accuracy, while for the U.S., it is 15 meters, and there is concern that
this 15 meters has to be brought down to zero. This type of precision calls for
a more complex orbit the further the attack proceeds, and only artificial
intelligence can ensure accuracy. It may well be that America was the 4th
generation leader and that the 1 megabit and several megabit devices which will
support the next, the 5th generation, can be developed by American know-how.
However, to use this know-how across diverse applications, including weapons,
requires a country with dramatically advanced production management; it is only
Japan that can deliver on it.

In sum, if Japanese semiconductors are not used, this accuracy cannot be
assured.  It has come to the point that no matter how much they continue
military expansion, if Japan stopped selling them the chips, there would be
nothing more they could do.

If, for example, Japan sold chips to the Soviet Union and stopped selling them
to the U.S., this would upset the entire military balance.  Some Americans say
that if Japan were thinking of doing that, it would be occupied. Certainly,
this is an age where things could come to that. The more technology advances,
the more the U.S. and the U.S.S.R. will become dependent upon the initiative
of the Japanese people -- this is getting crazy now, but the point is clear.

The U.S. Defense Department's Science Commission recently prepared a huge
classified report on electronic engineering.  Looking at this, one can well
understand the sense of crisis that the U.S. has with respect to Japan.

The report states that if Japan is left to go as it is, it will be impossible
to get the lead back.  This report is very accurate in assessing the areas of
weakness in the U.S. and the strengths in Japan, but only the President and a
few select people have seen the report.  If it were seen by the general public,
it would certainly raise quite a commotion.  It is in this area where the U.S.
specialists have their greatest sense of danger, primarily centering on Japan's
semiconductor technology.

-- We have grown very dependent upon America's technological superiority in
military strength.  In that technology, electronic equipment is the most
effective technology.  Semiconductors are the "key" to preserving this
superiority in electronic equipment, they are the "heart of the equipment." If
competitive, mass production of semiconductors is the key, then this is in turn
dependent upon having the market to support mass production. --

This dependence on the market for supporting mass production can be seen in
that America did not have the vast and diverse needs for semiconductors, as
Japan did in rice cookers and other household appliances.  In Japan, these
sizable and diverse needs created the market for semiconductor production. The
report continues:

-- American's Semiconductor Industry for its commercial mass production is
losing its superiority minute by minute.  There is a strong relationship
between superiority in production technology and superiority in semiconductor
technology, this is being transferred to foreign countries minute by minute.
Very soon now, the defense of America will become dependent upon supply sources
abroad.  It is the opinion of the task team that this is something which is
absolutely unacceptable for the United States. --

What is meant in the report by "foreign supply sources" is none other than
Japan.  Further, they seem to worry about the following:

-- What is more problematic is that the electronic equipment systems are being
transferred abroad, where they could more easily get transferred into the hands
of the Soviet Union. --

In other words, their sense of crisis stems from the fact that the
semiconductor technology is absolutely vital in maintaining military
superiority, and that this might flow from Japan to the Soviet Union. I feel
that what is behind this abnormal hysteria on the part of this country is that
this pivotal military technology is in the hands of another country, not even
Europe, but in the hands of an Asian country, Japan.

Toshiba, etc. which was speared by COCOM is the fault of this hysteria by the
U.S.  If that had been criticism from the pure perspective of the law, it would
not for a moment have any basis at all.

The 1 megabit semiconductors which are used in the hearts of computers, which
carry hundreds of millions of circuits in an area which is one-third the size
of your little fingernail, are only made in Japan.  Japan has nearly a 100
percent share of these 1 megabit semiconductors.

The United States has the know-how to make them, but when it comes down to
actual production, they don't have the technicians; they don't have the
employees.  Further, they don't have the production management.  Because they
don't have development and production linked into one unit, they guard
know-how like a jewel.

America went after cheap labor and set up factories in Southeast Asia, where
they could make 256k chips (1/4 the capacity of 1 megabit chips), but they
could not catch Japan.  Now, Japan is at least 5 years ahead of the U.S. in
this area and the gap is widening.  There is even some kinds of basic research
which cannot be accomplished without using one of these advanced computers.  It
take excellent computers in order to develop other advanced computers -- it is
a cycle of technology.  In other words, the bigger the gap in advanced computer
technology, the more difficult it is to catch up.

The current situation in the world is that those kinds of computers are central
to military strength and therefore central to national power.  This is why the
U.S. is being driven so hard.  For example, in performing simulations of what
elements would be needed by aircraft flying at mach 2, a regular computer might
take 40 years to perform the necessary computations.  If the same query is put
to a new, advanced, computer, however, the answer will come out in a year.
Japan has almost the total share of the 1 megabit chips which are at the heart
of these computers.  In that sense, Japan has become a very important country.

1.3 There Is A Need for Japanese to Change Their Consciousness in Light
 of High Technology
As the world goes smaller, and issues in the world further settle down, whether
it be China or Siberia, development will proceed.  In order to get the needed
access (participation in the market), the most important possibility lies in
linear technology.  Japan and West Germany are the most advanced countries in
this research and development, and the theoretical base of Japanese technology
is far superior.  West Germany has given up in research on superconducting, but
Japan has cleared three technological obstacles which were envisioned by West
Germany.

To make a long story short, the West German magnetic floating train development
realized a levitation of only 8mm, but Japan's "Maglevel" superconducting
linear motorcar realized a levitation of 10 centimeters, and speeds of 500
kilometers per hour.  This type of technology does not exist anywhere in the
Soviet Union or the United States, it only exists in Japan and West Germany.
If the giants in the economic field and the politicians can join together
around this type of technology, it would open up new possibilities for our
advancement.  Whether or not this can be achieved depends upon our large and
small choices in the future; in sum, it is a question involving the
sensibilities of our politicians.

There is a Jiyu Shakai Kenkyu-kai (Free Society Research Association) which is
presided over by Mr. Morita.  This was formed more than 10 years ago as an
association of politicians and businessmen.  I am the youngest, but I also
participate.  We get together for discussions one or twice per year.

Recently, Mr. Kissinger predicted that Japan might become a military
superpower.  This, however, was not the foolish step of Japan getting ICBMs
and refurbishing the old Yamato battleship, it pointed to the danger that no
matter how much the U.S. or Soviet Union developed space, equipped themselves
with space platform weapons, the military initiative to control these would be
dependent upon Japanese technology.  The question now is whether Japan has
politicians who accurately understand the history behind what we have now
become.

We Japanese now face choices on whether we can boldly proceed or stand back
quietly.  It may be possible that Japan can secure a new culture for itself
based upon the skeleton of the development of high technology.  We must not
restrain ourselves to what we have done up to this point.  The dregs of the
postwar period are too prominent in the consciousness of Japanese.  I feel that
however hesitatingly, the revolution in our consciousness has already begun.

The Soviet Union implemented a revolution in consciousness with its criticism
of Stalinism, and China achieved the Great Cultural Revolution.  The United
States also realized a type of consciousness reform through its bitter
experiences in the Vietnam War.  Japan is the only one which has not felt the
need for some kind of reform since the end of the war.  We do not need a
drastic reform of consciousness, but rather, a smooth reform based upon the
technology that we have developed for ourselves.  I think that only by doing
this will we realize a society which is mature in the true sense of the word.

2.0 THE DECLINE OF AN AMERICAN WHICH CAN ONLY SEE 10 MINUTES AHEAD (Morita)

2.1 American Neglects the Significance of Production
The gist of the Ishihara message is the importance of production activities.

I have had frequent occasion to deliver speeches, both in Europe and in the
United States, due to the nature of my business activities, and have involved
myself in many debates at international conferences.  As a result of my
conversations with Europeans and Americans, I have become very aware of and
concerned about the fact that they appear to have forgotten the importance of
production activities.

Americans make money by playing "money games," namely M&A (mergers and
acquisitions), by simply moving money back and forth.  If you look at the
exchange rate, for example, the dollar is now worth about 120 Japanese yen, and
enormous and quick profits are made by just moving money by computer,
satellite, and even by telephone.

The summer before last, I had the opportunity to talk to a group of three
thousand foreign currency dealers, who specialize in buying and selling money,
at a conference on the future of money transfers and financing.  I have been
known to be critical of the floating exchange rate system.  Talking to money
dealers about my ideas was like telling stockbrokers that the movement of stock
prices if wrong; it takes a lot of courage.  I stressed that money should not
be the subject of speculation, because the fundamental function of money should
not be to enrich banks and security companies, but to smooth the path of
production activities.  It has been said that America is entering a so-called
post-industrialist society where the weight of the service industry sector is
growing.  Yet, when people forget how to produce goods, and that appears to be
the case in America, they will not be able to supply themselves even with their
most basic needs.

Last summer, a friend of mine who is always criticizing Japan for being
"unfair" invited me to his summer home to play golf.  At the first tee, I
pulled out my MacGregor driver whereas my friend had a Japanese Yonex club.  I
criticized him for using Japanese clubs since he had been telling everyone not
to buy Japanese products.  He responded simply: "These clubs give me better
distance." Well, I was not able to sacrifice distance and so I kept quiet.
After the game, he invited me to his house and while his wife was preparing
dinner, he showed me around.  In the garage, I saw a Kawasaki snowmobile, which
he said he needed because winters in the northern part of New York State have a
lot of snow.  Next to it was a Japanese motor boat, which he said he needs
because his house is surrounded by lakes.  I also saw an off-road vehicle made
in Japan.

Finally, dinner was ready and as I went into the house, I saw a Sony television
and numerous other Japanese-made products.  I said, "You criticize us all the
time for not buying American products while it's obvious that you prefer
Japanese products.  Are you asking us to buy something you won't buy yourself?"
Americans today make money by "handling" money and shuffling it around, instead
of creating and producing goods with some actual value.

2.2 America Looks 10 Minutes Ahead; Japan Looks 10 Years
I delivered a speech in Chicago entitled "Ten Minutes vs. Ten Years." I stated
that we Japanese plan and develop our business strategies ten years ahead.
When I asked an American money trader, "how far ahead do you plan...one week?"
The reply was "no, no...ten minutes."  He was moving money through a computer,
targeting the fate of that transaction ten minutes later. So, as I told the
Americans, we are focusing on business ten years in advance, while you seem to
be concerned only with profits ten minutes from now.  At that rate, you may
well never be able to compete with us.

A well-known economist, Peter Drucker, wrote recently: "Americans cannot live
in a symbol economy where businessmen play only with numbers; Americans should
come back to a real economy where money moves in accordance with real
production activities."

Unfortunately, in America, stocks are owned and handled by institutional
investors whose fund managers actually buy and sell stocks in huge numbers in
an attempt to maximize profits in a given short period of time.  At the
slightest increase in stock prices, they sell, and when the profit margin of
any company declines as a result of poor management, they sell before the
company's stock prices begin to decline.  For them, the name of the game of
nothing but quick profits.

It is expected that the American service industry will flourish.  This includes
finance and financial services, where entrepreneurs and investors alike do not
leave their money in long-term projects, such as the ten-year projects that
have been implemented in Japan.  The American economy is, then, an economy
without substance.  It must return to a real production economy.

In America, R&D is closely linked to the military budget.  R&D in the private
sector is heavily dependent on military expenditure.  As a result, a
corporation can engage in the development of a new fighter without worrying
about profit or loss.  On the other hand, budget constraints on NASA and the
military agencies will directly reduce the volume of R&D.

A ten-minute profit cycle economy does not permit companies to invest in long
term development.  There are some exceptions, such as IBM, AT&T, DuPont, and
some others.  But they do not represent the mainstream of American business
nowadays.  Gradually but surely, American business is shifting toward a symbol
economy.  In addition, it seems fashionable to call the service industry the
"futuristic third wave" and information and intelligence is the business of the
future.  But these produce nothing.  Business, in my mind, is nothing but
"value added;" we must add value and wisdom to things and this is what America
seems to have forgotten.  And this is the most deplorable aspect of America
today.

Japan will do fine as long as it continues to develop and produce things of
tangible value; a shift from high-technology industry to quick profits from the
money game will only serve to accelerate the degeneration of the country.  We
must take precautions against such developments, providing for, for example,
tax advantages for long term investments.

It is even more the case in America.  A quick profit from a stock deal should
be taxed at a higher rate than those on long term investments. Capital gains
should be subject to a lower rate of taxation.

Recently I said, "America is supposedly the number one industrial country in
the world.  Why don't you have a Department of Industry?" Seated next to me was
the chairman of the Ford Motor Corporation, Mr.  Caldwell, who replied, "that's
right - we are supervised by the Department of Transportation."  The Department
of Transportation is interested in emissions control and highway safety, but
has no interest or jurisdiction over the future of the automobile industry in
the United States.

America is the only nation among the advanced industrial countries that does
not have a Department of Industry which is responsible for industrial policy.
Instead, the Department of Commerce and U.S.T.R.  preside and their only real
concern is trade-related matters and they criticize others for the failure of
American industry.

2.3 Japan's Impact on the World Economy Will Be Recognized
The American Economy appears to be deteriorating.  I assume that the Bush
administration will take steps to tackle the present problems, but the country
as a whole seems to be extremely nonchalant about the so-called twin deficits:
budget and trade.

There seems to be the feeling that Reaganomics raised the standard of living,
taxes are relatively low, and they can buy goods from all over the world.  When
the Republicans captured the White House again, I began to wonder if there was
any sector in America which was truly concerned about the twin deficits since
Bush repeatedly denies any possibility of a tax increase.  How in the world do
the Americans expect to restore their economy?

Let's examine the price of gasoline.  Consumption of gasoline is growing
rapidly, yet the price is still below a dollar a gallon.  The ongoing world
price per gallon is $4 U.S.  A one-cent per gallon tax increase means an
additional $10 billion; think what the government could get if they levied an
additional 25 cents per gallon.  Yet the government will not even begin to
initiate such a move.

In fact, even with such an additional tax, American gasoline prices will still
remain less than international prices.  Politicians are simply afraid of losing
votes by adopting unpopular policies.  Some of my closest American friends have
said that Bush could have been elected without promising not to raise taxes.
He has so firmly committed himself and his Administration to not raising taxes,
yet it is so obvious that the twin deficits cannot be solved without additional
national revenue.

Bush should have been more realistic if he was, and is, honestly concerned with
the American budget crisis.  Tactically, he could have said early on that he
would not raise taxes, but as he gained support, he should have become more
honest and direct, and told the people that it was necessary to pursue a more
realistic financial policy.  On the contrary, he confirmed his pledge even
after he was elected. Solutions to the deficit problem seem even more remote.

This being the case, the U.S. dollar has continued to decline, and the U.S.
has had to increase interest rates to further attract foreign money to the
U.S., for which it will have to pay a great deal of interest.  The result is an
increasingly vicious circle.

The U.S. inflation situation might well become an even more chronic phenomenon.
Economic growth without inflation is ideal, whereas endless inflation might
well bring the dollar's value to the level of trash.  This, in turn will make
European and Japanese assets trash since sizable asset of both are in U.S.
dollars.

Both the Europeans and the Japanese cannot sit idly by, ignoring or overlooking
the trend in the American economy.  At one time, when the U.S.  dollar was very
high, the Japanese and Europeans asked Americans if "they could absorb the
trade deficit caused by the high dollar?" At that time, Treasury Secretary
Regan was of the opinion that the U.S. dollar should stay high and strong.
When James Baker became the new Secretary of the Treasury, he recognized the
problem and entered into the Plaza Accord to lower the value of the dollar.

The American economy does not stand alone.  It is not only a domestic issue.
The collapse of the American economy would cause a worldwide disaster. 1987's
Black Monday chilled all nations momentarily.  I am not a pessimist, but I
cannot help thinking that unless the Bush Administration handles economic
issues very seriously, a worldwide collapse is not just a worry, but a very
real possibility.  The ever-growing American inflation and thus its economic
crisis will not only make other nations catch cold, but bring their economies
into crisis as well.

It is said that Japan contributed to efforts to stop a possible disastrous
chain reaction ignited by Black Monday which began in America and soon affected
the London stock market as well.  At that point, the Japanese Ministry of
Finance asked Japanese institutional investors to support prices for a time,
which instantly normalized Japanese stock prices.  Later, the chairman of one
of the major U.S.  banks, who was visiting Japan, told me, "It was Japan who
put a stop to the chain reaction and it was the Ministry of Finance who was
able to move the Tokyo stock market.  The Japanese government now has the clout
to sustain Wall Street and the City of London.  So-called Japanese guidance is
truly powerful."

This gentlemen went on to say, "we are worried about the fact that the Japanese
people are unaware of the fact that they have a significant impact on the world
economy.  And I believe that it is true that Japan's economic status has been
much enhanced."

Like it or not, this is the picture held by Americans, and the Japanese people
have to recognize it and, inevitably, they have to behave in accordance with
that status in the world community today.

3.0 RACIAL PREJUDICE IS AT THE ROOT OF JAPAN BASHING (Ishihara)

3.1 America Will Never Hold Its World Leadership Position Unless It Ends Its
Racial Prejudice
I had the opportunity to visit Washington, D.C. in April a year ago, and was
surprised at the very hostile atmosphere.  It was only five days after Congress
passed the resolution condemning Japan on the semiconductor issue.  I met some
of my old friends, senators and congressmen, who with subtle smiles admitted
that racial considerations, or more directly, racial prejudice, played a role
in U.S.-Japan relations.  This was after I had discussed several concrete
examples with them.  Although they shied away from the subject of racial
prejudice as if it were taboo, they did admit that it is there.

Initially, they violently denied my allegations, citing that the Pacific War of
40-some years ago as the only real source of prejudice against the Japanese.  I
declared that it was not as simple as that. It appears that the Americans were
firmly of the opinion that it was the West, namely Euro-Americans, who
established modernism.  My reaction was as follows.

It may be true that the modern era is a creation of the white race, but you
have become somewhat presumptuous about it.  In the pre-modern era, Asiatic
races such as Genghis Khan and his armies raided the European continent,
destroying towns and villages, looting and raping. Yet at that time, many
Europeans actually imitated the style and behavior of Khan's hordes, cutting
their hair short, shaving their eyebrows, and walking menacingly with knees
apart.  That was nothing compared to the strange ways modern Europeans and
American adopt the style and fashions of some of the present era's heros, such
as the Beatles and Michael Jackson.  Even Asian kids do this.  Probably Khan
was some kind of cult figure then and while women regarded him as a "hero" of
sorts.

Some say that the roots of the so-called "yellow peril" can be traced back to
the atrocities committed by Khan and his men.  At any rate, we should keep in
mind that there is prejudice committed by Khan and his men.  At any rate, we
should keep in mind that there is prejudice against Orientals, as the following
episode illustrates.

I had a chance to talk with the Secretary of the Navy about the Amber System.
Amber is supposed to be the color of caution and danger and this system is
named for this concept.  Under the Amber System, ordinary vessels such as
tankers and container ships, are equipped with sonar on their bows. The sonar
can detect underwater objects. Some objects are rocks, etc. which navigational
charts will show. What the system is looking for are nuclear submarines.

The Amber System alone cannot detect the nationality of the submarines
detected; it cannot tell if they are American, Russian, or whatever. It simply
detects the presence of some foreign object and this information is relayed
directly to the Pentagon, which knows what is on the navigational charts and
also where U.S. subs are located, so they will be able to ascertain whether the
particular sub is American or not.

I suggested that the Navy equip all Japanese commercial vessels with this
system.  Japanese seamen are reliable and the Japanese merchant marine travels
all the oceans and seas.  Japanese vessels, including our oil tankers, could
gather information along vital cargo routes and the U.S. could analyze the
information received from the Japanese ships.

To my surprise, the Americans said that it was none of Japan's business. I
asked that how, in light of the very limited number of U.S. ships, how can you
deny the need for such assistance.  Their answer: "We cannot leave such a
critical matter with Japan."  I asked if it was appropriate to involve the
British and the Germans, and they said it would be.

The fact of the matter is that Americans do not trust Japan.  Japan would have
no basis with which to analyze the information collected by the Amber System,
yet they were still worried about the Japanese reliability in merely collecting
the information.  It seems that in their minds, even the Soviets are more
trustworthy than the Japanese. American racial prejudice toward Japan is very
fundamental and we should always keep it in mind when dealing with the
Americans.

During the Second World War, Americans bombed civilian targets in Germany, but
only on Japan did they use the atomic bomb.  While they refuse to admit it, the
only reason they could use the atomic bomb on Japan was because of their racial
attitude toward Japan.  The fact that they actually dropped the atomic bomb on
Japan is sufficient indication that racial prejudice was a factor.

It is my firm conviction that the roots of the U.S.-Japan friction lie in the
soil of racial prejudice.  American racial prejudice is based upon the cultural
belief that the modern era is the creation of the white race, including
Americans.  This confidence appears a bit overwhelming, probably due to
America's relative youth as a nation, which tends to blind it to other
cultures.  If Americans were ever to be made aware of the presence of a real
Japanese culture in the Azuchi-Momoyama period as did the Spanish and
Portuguese missionaries, they might develop some respect for Japanese cultural
history. Unfortunately, the present American education system does not teach
children the value of other cultures.  In the period noted above, there were
over 20,000 "terakoya" schools all over Japan.  No other nation had such an
extensive schooling system at such an early point in their history.

During the Edo period, even farmers and peasants were able to read and write at
least one or two thousand characters, including hiragana and katakana.  Japan
already, at that time, had a complete postal network, called "hikyaku" as far
as the southernmost end of Kyushu.  Documents and information of various kinds
were available in libraries in many cities and towns.

This is the kind of information I give to Americans who exhibit ignorance of
our culture.  Unfortunately, most Americans don't like to see these facts, and
they tend to change the subject.  In short, their historical prejudice and
cultural narrowness has reached a point where they cannot see another's point
or see the value of another culture. All this has made Americans, in the post
war period, very irritable on the issue.

The American position at this point seems to be that the British and Germans
can play whatever role the Japanese could, and can do so without irritating the
U.S.  Americans are essentially an honest people, and in fact do admit to the
existence of racial prejudice, if they are pressed on the subject, which I do.
However, this is not enough.  They should also admit that prejudice does not
hold any solutions to the problems developing in the world today.  It is
important that they face the situation, aware of the historical context, seeing
that the reality is that the power in the world, including the economic power,
is shifting gradually from West to East. It may not be as strong a shift as is
expressed in the expression the "Pacific era," but at any rate it is in
America's interest to rid itself of prejudice against Asia, including that
against Japan, in order to maintain a position of leadership in the world.

3.2 Japan Should Become More Cosmopolitan
The calendar clearly indicates that we are moving toward the end of a century,
and with it is coming the end of the modern era as developed by white
Westerners.  History is entering a period of new genesis. The promoter of this
era is Japan as well as the U.S.  It is a historical development which
America's political leaders should make known, so that America will be better
equipped to meet the tasks of the future.

The Japanese have their own problems.  They may have to go through a mental
evolution to meet the needs of this new era.  As Mr. Morita has pride and
confidence in the products of his company, and attitude which has made him a
truly cosmopolitan man, so must the Japanese develop pride and confidence in
our culture and our technology.  We cannot become overbearing, which will not
be tolerated in the new era, but by the same token, an inferiority complex is
equally harmful.  The Japanese people must move out of their current mental
stagnation; I feel this is especially important for Japanese diplomats.

Except for the young and especially qualified, most Japanese diplomats suffer
from a peculiar inferiority complex [and] as a result are spreading the seeds
of misunderstanding throughout the world.  When I was young, I had the
opportunity to live with one of Japan's ambassadors and his family.  He was a
hell of a nice guy -- a really wonderful human being.  However, he seldom
socialized with anyone.  At the end of a game of golf, if someone suggested
dropping into the lounge for beer, he would refuse, saying that he preferred to
have one when he got home.  This is the same attitude that some Japanese have
when they won't even accept a cup of tea while a guest in another's home.  It
may be for most Japanese that only in his home and only with his family can he
really relax.  If this is true, then the Japanese can never truly be
cosmopolitan.  When the heads of some of Japan's top trading companies, such as
Mitsubishi and Mitsui, wanted to join prestigious country clubs in the
countries in which they were stationed, their applications were rejected
because it was felt that Japanese were too parochial, staying to themselves and
not socializing with others.  Some Japanese diplomats don't hesitate to show
their inferiority complex.  One ambassador even publicly said that the Japanese
were a race a "pygmies."  Such things happen all the time!

The Ministry of Foreign Affairs tried to cover up the news of the firing
training by an American cruiser (the Towers, 3370 tons) last year in Tokyo Bay.
A single cannon on the Towers, the Mark 42, can send a 32kg ball over 23
kilometers at 36 rounds per minute.  American authorities said non-explosive
training ammunition was being used. But even these could easily damage of Uraga
class Japanese Coast Guard frigate (33231 [sic] tons), not to mention what it
could do to small fishing vessels.  Tokyo Bay is a busy commercial harbor,
similar to New York Harbor inside the Verrazano Bridge.  American television
reported that the American people would be furious if that happened in their
country.

The Ministry of Foreign Affairs asked the Japanese media to hold the story
until further notice, since that event was incidental.  I was very angry and
protested, saying that I would release the news on my own.  This happened on
Japanese sovereign territory in an area clearly barred from such firings due to
the fact it was a vital maritime channel.  It was a clear violation of Japan's
sovereign rights.  I observed that "It was like seeing a ranking Self Defense
Agency official firing his service revolver at the Ginza junction."  I still
feel the same way.

Americans can say that they are here to protect Japan under the U.S.-Japan
Security Treaty.  But at times, it appears to me that the Americans behave more
like mad dogs instead of watch dogs.

I use the term "mad dogs" when referring to the Americans recalling that Mr.
Shiina, Deputy President of the LDP, used it when he was Foreign Minister.
This is another instance where "no" clearly [must be] said when that is what is
meant [and] would be useful.  One must say "no" when he means "no" and failure
to do so reduces credibility. In the case of the U.S.-Japan relationship, such
an attitude only further increases American racial prejudice.  The Japanese
people should know that they are in essence protecting American interests as
the new era in international relations begins, something the Americans seem
quicker to sense.  This is the reality of the U.S.-Japan relationship today.

4.0 BASHING JAPAN GETS VOTES (Morita)

4.1 The Paradox of Welcoming Investment but Criticism of Japan
I am worried about the tide of attitude in America with respect to Japan. The
U.S. Government and the Congress have adopted a number of harsh policies with
respect to Japan.  Some 37 states in the U.S. have established offices in
Tokyo.  Since I am responsible for investment-related matters in the Keidanren
(Federation of Economic Organizations), when the state governors visit, I am
the one to meet with them, if my time permits.

It never fails, they are always coming to Japan saying, "invest, please
invest."  Just when I am about to assume that America welcomes Japanese, U.S.
congressmen elected from these same states are bashing Japan.  The state
government has no involvement with this, of course, but they are saying to
Japan's big business, "come on, come on."

"What in the world is the meaning of this?" I wonder.  In addition, recently a
number of famous academics and journalists have published books which are
critical of Japan.  Recently, there has been a book, "Buying into America"
which suggests that Japan is buying up America, and there is a book called
"Yen" which envisions a future after the year 200 in which Japan uses its
financial power to control the world. The latter is rather calm in its
perspective, but both books reveal a clear Japanese menace - the tides have
really shifted since "Japan As Number One" was published.

A book written by a famous journalist which depicts Japan in a very harsh light
has become a best seller, so this is indicative of the critical attitude on
Japan held by the American masses.  The more this attitude increases,
politicians will beat up on Japan in an attempt to make votes for themselves,
because getting votes is the most important aspect of being a politician.

The politicians themselves are not at all concerned, however.  When asked why
they bash Japan, they respond that if they say "Japan is good," votes will drop
off.  If Japan is bashed, further, if a Toshiba radio-cassette player is
smashed, this is not indicative of hating Toshiba, but they think if they do
such things, votes will increase.

The state governments welcome Japanese industry because if they invest in their
state, tax collections increase, along with employment, but among the American
people, the attitude with respect to Japan is becoming more and more critical.

The Keidanren has established a "Council for Better Investment in the United
States," which is the English language name of the council (literally it is the
"Council for Investment in the U.S." - translator).  What we mean by "better
investment" is the type of investment which will get Americans on Japan's side.
If the number of Americans who view things the way Japan does increases, then
bashing Japan will cause lower vote counts.  That would probably make
politicians stop bashing Japan.

I think that it is vital that we help build a feeling of friendship among the
American masses with respect to Japan.  At the present time, everyone buys
Japanese goods and is delighted with them.  They do not hate Japanese products.
What makes them hate Japan, however, is that when Japanese businesses enter the
American society, they have the feeling that foreigners are coming.

4.2 Japanese Industries in the U.S. Should Work at Community Service
Direct investment in the United States is currently expanding very rapidly.
The end result of this is that Japanese companies, including Sony, have
established themselves in local districts throughout the country.  When the
English or French invest in a local area, the communities and local society do
not see this as an invasion of foreigners.  However, when the Japanese come,
they feel that strangers, or something foreign has entered their midst.  This
gives them strong feelings of fear and anxiety.

To give a simple example, when Japanese go to the U.S., their children go to
schools.  The schools have an organization, the P.T.A.  This stands for Parent
and Teachers Association.  The corresponding organization in Japan is called
the "Fathers and Brothers Association" but no fathers and brothers participate,
it is more of a "mothers and sisters" association.  Myself, I have never
attended the Fathers and Brothers Association in Japan.  In the case of
America, however, husbands go with their wives to attend meetings for their
elementary school or local area school and discuss how those schools should be
run.  In Japan, it is the mother's duty to take care of educational matters for
the children, so the father does not attend.  In America, however, when the
father takes off work to attend a PTA meeting, his company does not charge him
leave.  The man, therefore, must go to the PTA meetings.

When I was living in the U.S., I went to PTA meetings where I was able to
associate with persons from various walks of life.  My daughter went to the
Nightingale Bonford School in Manhattan and my son went to St. Bernards.  I got
to know Stokowski (the late) conductor at one of the PTA meetings.  John
Gunther, a very influential behind-the-scenes man was also someone I met
through [the] PTA; he is now the Ambassador to Austria.  Henry Grunwald, the
editor of Time, was [the father of] a classmate of my daughter's who I also got
to know.

At a gathering of Japanese businessmen in the United States, I got up and told
them "to go as a couple to the PTA to get to know the other people involved and
to start getting personally involved in the school."  The people I was speaking
to made such remarks as "I don't like to hear that," or "Why do we have to do
that?"  When I told them there was actually a meeting the other night and asked
what they did, the responses were "I was too busy, I sent my wife," or "My wife
can't speak English, so she just gossiped with the other Japanese women and
came home."  Because of instances like this, there is no doubt that the PTA
would view them as the foreigners who'd come to town.

Also, when Sunday morning came, the whole community dresses up and goes to
church. At that time, however, the Japanese are all walking in the opposite
direction to the country club.  When they are asked why they are not going to
church, they are likely to respond that "I'm a Buddhist," or a similar reply.
I'm not saying that they should necessarily go to church, but it is natural for
the people in the community to think that some really strange foreigners are in
their midst when they see them all trotting off to the golf course on Sunday
morning.

I golf in America too.  But I always do it with foreigners.  When Saturday
night comes, I take my wife to the country club, have dinner and talk with the
other members.  However, golf for Japanese is usually a business-related event;
there are usually guests from Japan and a group solely composed of Japanese
people plays the course.  This is another way in which a strange image is
transmitted to the local community.

Another example is that American wives often volunteer their spare time for
community service activities, such as preparing Braille for the visually
handicapped.  Japanese housewives normally do not participate in such
activities.

There are also public fund-raising dinner parties for local community centers,
which do not involve mere contributions, it is a major social event where funds
are raised.  Tickets for the party are $30, $50, $100 and $200 which represent
contributions to the fund-raising event. They view participation in these
events as a contribution to their local society.  While this is a little
different than the golf example above, it is another area where Japanese
isolate themselves as strange foreigners.

It is vital that we participate in the local society in order to resolve any
racial problems.  When Japanese build factories in the United States, these
usually go to the regional or rural areas due to the large amount of space they
require.  In such a small community context, if Japanese avoid contributing to
the local community, they will be disliked in the area, and then the people of
that area will cast their votes for Japan-bashing politicians.

One Japanese company that had established in the U.S. had its headquarters in
Japan make a very substantial contribution to build a community center, in an
effort to counter any adverse prejudice, even though the local company had not
yet become profitable.  The local community was delighted and named the hall
after the company that had contributed.  When the plant manager was reassigned
back to Japan, the whole community threw a "sayonara" party for him.

I am not saying that all Japanese companies coming to the United States are
bad, but just a little kindness and consideration can turn around attitudes
about Japanese people.  The Council for Better Investment in the United States
is trying very hard to get this information out in an effort to have the
Japanese company weave itself into the fabric of the local community in which
it is locating.

At the current time, two hundred and forty or fifty companies who have invested
in the US are members of the Council, but it aims to attract even more members.

Information about these efforts is gradually becoming known in the U.S., and
this has already done much to change perceptions there.  I think Japanese
people in the U.S. are also making better efforts.

4.3 Let's Build an American Society Where Japan Bashing Causes Votes to
 Decline
Therefore, I think that the only way to erase the perception Mr.  Ishihara
points to where Japanese are disliked just for being Japanese is to make the
above types of efforts.  This is because they [Americans] are stubborn and not
likely to be induced by saying "you guys change."

I have so many American friends myself that I have been accused of being an
American.  Since I have lived in America and have been counted as a friend by
many Americans, I am not overly sensitive to what is said about me.  As
Ishihara has said, to Americans, they feel that because their hair color is
different, it is difficult for them to know what Japanese are thinking.  I
think there is another important point.  The structure of the Japanese language
and English is different, and this affects our discussions together.

I have written this elsewhere in a book, but when Japanese read Chinese, they
put in arrows and symbols to change word order, but Chinese read it directly
and understand the meaning of the sentence immediately.  English is the same
kind of language, which is read one word after another.  In sum, this means
that Americans have a different sequential order in thought processes.
Therefore, no matter if you use interpreters, it is impossible to interpret in
the same sequential order as the thought processes that generated the words in
Japanese.  Thus, when a message is to be delivered, it is regrettable but true,
that the sequential thought process of Japanese is in the minority in the
world.  When communicating with occidentals, who are in the majority, if things
are not communicated in an order they can comprehend, they do not understand
what we are saying.  It is necessary that we be cognizant of this disadvantage
that Japan has in this area.

While the color of our hair will never be identical to Americans, from the
point of view of practical businessmen, I think we must recognize that if the
current trade imbalance with the U.S. is not rectified, America will always say
Japan is at fault.  If Japanese business does not go to the U.S. with
manufacturing and sales to bring down the imbalance, there is no way the
problem will be rectified.  We must bring our factories to foreign shores, and
invest in these areas where our goods are sold.

At this point, if there are any racial problems, it would be the fault of the
Americans, but that does nothing to resolve them.  Through the success of
Japanese-American citizens' groups, racial problems are not so prominent
anymore.  When the Second World War began, all Japanese-Americans were placed
in detention camps.

In the United States, people having different colored skin have realized great
successes.  An example is the Wang company which was founded by a Chinese.  In
our quest to find out why it is only Japan that is bashed, it would be a bit
strange to say it is because Japan is not internationalized, but it is really
because we have been lax in not following the "when in Rome, do as the Romans
do" in incorporating ourselves in the local community.  I think this is why we
remain foreign.  That is exactly why I am saying we need to make such efforts.
I am not saying that everything they do is alright, but I am saying there is a
need for internationalization by both parties, and we have the need to do
business.

The internment of Japanese-Americans during the war was a prime example of the
emotionalism that the U.S. displayed with respect to Japan.  After the passage
of 40 years, the President has finally publicly recognized that this was wrong.
It would be nice if emotionalism with respect to Japan ended right there, but
that is not the case.  An example is the Toshiba clause included in the Omnibus
Trade and Competitiveness Bill -- no buying of Toshiba products -- Toshiba
Machine is bad.

I said in a speech that this was a violation of the U.S. Constitution.  This
was due to the provision in the Constitution that proscribes the enactment of
laws which would deal retroactively with crimes.  It also allows anyone accused
of a crime the opportunity to defend himself. In the process of compiling this
bill, sanctions were put on Toshiba for its crime.  Toshiba had already been
punished for its crime under Japanese law; but by adopting these sanctions
restricting Toshiba's business activities, the Bill would impose retroactive
punishment.

When I recently spoke in Seattle, I suggested that this Bill was
unconstitutional, that it was an emotional response, and that it should be
treated as an emotional international issue, which was similar in substance to
the internment of Japanese-Americans during the war.

When something can become this emotional, perhaps Mr. Ishihara is right in his
contention that racial problems lie at the root of the problem.  During the
occupation era, the Americans built fences and stayed inside and didn't mingle
too much with the Japanese people. This created an unpleasant atmosphere.  Now,
however, there are no occupation zones and we are at peace, we must behave
appropriately and associate with each other.

If we do make efforts in this direction I have indicated to establish a
framework where Japan-bashing politicians are rewarded by fewer votes for their
efforts, there is no doubt that political pressure will be exerted to the point
where there can be no reduction in frictions between the countries.

Thus, it is my way of thinking that Japan must take the kind of action this
situation calls for.

5.0 THE CRITICISM OF JAPAN AS AN IMITATOR IS OFF THE MARK (Ishihara)

5.1 The America Which Closes Its Eyes to Its Own Unfairness, and Criticizes
 Japan
The more I hear Americans bellowing complaints that Japan is unfair, the more I
would like them to calm down and think.  An example is a harsh exchange between
myself and the U.S. Secretary of Commerce.  It was a coincidence, but at the
time when Commerce Secretary Verity visited Japan, there had been an agreement
for an American company to participate in the second phase construction at
Haneda International Airport.  Verity was in Japan, and his mission included
offering his thanks for this deal.  However, I threw some cold water on him by
saying that this would be the only time I would permit such a big commotion
over such an issue.

The U.S. Congress had been criticizing Japan for having a "closed" market in
large construction projects.  In fact, however, there was only one U.S.
construction firm that had been licensed to work in Japan - two, if you count
pending applications.  They say that the barriers are too thick, but I think
that anyone wishing to do business in a foreign country has to make some
adjustments to correspond to the local conditions.

After we went back and forth along that line, I commented that Japan's design
for the Airport Building and the Shinkansen [bullet train] station, including
the interior was poor -- not refined enough and too idiosyncratic. I went on to
say that this might well be something which could be consigned to a foreign
country.

This was true of Narita International Airport too.  I noticed the other day
that the pillars were painted with rust-proofing primer coat.  When I suggested
to the person in charge that he get busy and have them painted, he said, "Mr.
Minister, did you just notice this? They have been that way since the airport
was completed."  When I asked why, he replied that it was OK this way because
of the contrast between the red, white and black.  When I asked whose design
that was, he calmly replied that the painting contractor had made the
determination.

Actually, there is not even a bar in the whole airport.  One might like to have
a drink to ease one's tension about flying before the flight, or one after to
relax.  Foreign airports always have a place where you can get a drink.  Day or
night, there is a place where the customer can get a drink.  This is an
integral part of air travel.

When I relayed these stories, Secretary Verity nodded his head, indicating that
he understood my point.  You could tell he was the Commerce Secretary, because
when we went on to discuss the Kansai Airport, he said it would be a great idea
if American companies could do the design.

Just that would be nice, he went on, but after it is completed, he said that
the same number of U.S. aircraft should be permitted to fly from the airport as
was permitted by Japanese carriers.  I replied sharply, "No, that won't do."
He turned colors and asked back, "Why not?"

There is an aviation treaty between the U.S. and Japan.  It is a relic of the
occupation era.  Not only is it not balanced, it is outright unfair.

Among the mutually agreed upon rights in this treaty is the right for air
transport to points in the signatory country, and for rights from those
airports to points beyond in third countries.  These rights are all rights held
unilaterally by the U.S. side.  American can fly into whatever Japanese airport
it pleases and then fly to anywhere else. In other words, it has unlimited
rights to fly through Japan to destinations beyond.

Japan, however, only has the right to navigate through limited airports, the
economically unprofitable routes from San Francisco->New York->Europe.
Actually, these routes are not even being used.  During the U.S.-Japan Summit
in 1982, we were allowed two flights per week from Los Angeles to Rio and San
Paulo, Brazil.  One of the concerns on the Japan side is that Nippon Cargo
Airlines (NCA) was finally obtaining 9 flights weekly in 1985 on the Tokyo->San
Francisco->New York route.

However, in exchange for this, America got the right to land jumbo jets in
Japan, and then fly from there further in small cargo aircraft to Manila,
Taiwan, and Korea.  The most profitable rights went to the U.S. in this
agreement too.  In the midst of all this, Japan cannot get the right to fly a
cargo aircraft in and out of Chicago.

While points of origin are limited by land space, Japan is restricted to just
three points, Tokyo, Nagoya, and Osaka.  America can fly to Japan from 19
airports.  Looking at the number of flights, according to a study made in
November of 1988, Japan had 204.5 and the U.S. 371 passenger flights, and 60
cargo flights for Japan versus 170 for the U.S.  This is really unfair of the
U.S. to be party to the U.S.-Japan Aviation Treaty which gives it so
overwhelming of an advantage.

American specialists are well aware of this situation, so they do not want to
engage in further negotiations.  This type of situation continues while the U.S
makes selfish assertions.

I explained to the Secretary that since the U.S. maintained that attitude, it
was at fault.  The Secretary said he knew nothing of these matters.  I pointed
out to him that we couldn't even begin talking about getting negotiations
started if he knew nothing about these matters.

An official from the State Department was accompanying the Secretary on his
visit.  He was an honest guy, and told the Secretary that the Treaty was indeed
unfair.  Secretary Verity became troubled.  It was a very strange atmosphere
between the Commerce Secretary and the official from the State Department,
standing there in front of me, a Japanese.  America is not the solid rock we
thought it to be.

For example, relations are extremely poor between the Department of Commerce
and the U.S. Trade Representative.  Yeutter and Verity quarreled like dogs and
monkeys, they never got along and were always bad mouthing each other.  While
none of these references about these two went on in front of me, there was an
official from the U.S.T.R in the delegation who was there to keep an eye on
things.

Anyway, once the potential for a scene between the Secretary and me had quieted
down, the "spy" from the U.S.T.R. caught my eye and said "Hang in there."  I
laughed, thinking what an interesting country the U.S. was.

5.2 Japan, A Country Where Each Person Is Highly Creative
America closes its eyes to its own unfairness and criticizes others. I think
that it should not be forgotten what such a shifty country has done.

As Mr. Morita has pointed out, it is off the mark to say that Japan has relied
on the U.S. for the creativity to develop technology, and then has just
cleverly developed and marketed it.  Americans and Europeans say that Japan can
do nothing but imitate, but it is not right for Japanese themselves to begin to
agree with such a statement. The Japanese people have been possessed of
creativity for ages.

There has been a gradual increase in the number of Americans and Europeans who
recognize creativity in the Japanese.  The same can be said for cultural
creativity.

Take the field of literature.  Some while ago, the French did not recognize
Japanese literature at all.  They did not think it had any value. More
recently, however, the French have grown to appreciate Japanese literature more
and more.  The reason for this is quite interesting; it came about because of
Japan's high technology.  That is, foreigners who were interested in Japan's
high technology began studying the Japanese language and started reading modern
Japanese novels.

They recognized that modern Japanese literature was indeed quite interesting.
It was not their masters of literature or translators who pointed this out, but
the intelligentsia who were coming from scientific backgrounds.

In any case, I do not think we should stand still and agree that outside of
literature, we are still nothing but imitators as the Americans say.  It is
time that Japanese take pride in their own spontaneous creativity and march
forward.

Sony developed the transistor [possible ambiguity in translation -- as Morita
notes in essay 4, Sony licensed the transistor from Bell Laboratories in 1953]
and took it to the U.S. market and changed the way Americans thought. In other
words, they ripped apart the immutable principle of one radio per each family.
The concept of making radios a personal appliance was nothing other than an
exhibition of creativity on the order of that shown by Columbus.

The bountiful creativity of the Japanese is not something which can only be
seen in a few of the elite, but something which can be broadly witnessed across
the board in the general citizenry.

Japanese technology has found its way to the very heart of the world's military
forces.  I think this the product of the integration of our creativity.

Even if you have one creative genius, unless you can produce the product of his
creativity in a factory, it will not come to anything. It takes a large number
of excellent general technicians and excellent employees or one will not begin
to see the light of day.

5.3 The Excellence of Japanese Products Relates to the Educational High
 Level of the Employees
One can partially grasp the superiority of Japan's technological ability in the
low rate of breakdown in Japanese products.  The vital element in the
excellence of technology and in tackling the problem of product breakdowns is
possible because of the excellence in abilities of the general employees.

The U.S. Boeing Corporation which was scrutinized due to an aircraft crash was
found to have problems with its employees' work methods, and they quickly set
about making improvements.  Certainly the re-education of the management could
be undertaken quickly to the satisfaction of Japan and other countries, but
since the level of the general employees was so low, concern remains in that
area.  When the president of Boeing's Seattle plant was asked: "How long will
it take after re-education has begun before the technological strength [of your
company] will begin bearing fruit?"  His answer was seven years.  Seven years!
How can we ride around in jumbo jets for seven years not knowing what types of
defects they might have?

As we learned from the tragic Boeing crash in Japan, all of those responsible
got off, bearing no criminal responsibility.  The legal systems in Japan and
the U.S. are different: in Japan, a national inspector is sent out, but in
America, aircraft manufacturers are not held responsible.  The Boeing company
did not even name the responsible persons.  They say that it is better to
prevent a recurrence than to spend all of their energies in finding fault, but
the thinking that exemption from prosecution is the only way the truth can be
told is something that is very hard to take for the families of those killed in
the accident.  According to an investigation by the Japanese police, there were
four Boeing employees who should have been further pursued to assess their
responsibility.  The U.S. side acknowledges this.

The Boeing accident was nothing more than a worker's mistake -- it happened
well before the crash.  There was no follow up after the crash except to say
that the maintenance operations were sloppily done.  While the specifications
had called for three thick divider walls to be tightly bolted on, it just was
not done.

Bolts had been placed on the left and right, but they did not reach through the
three sheets, just to the second one.  This caused a serious weakening of the
aircraft strength.  This tells the story of the low level of the people who are
performing maintenance.

Despite the fact that they are employees of the Boeing Corporation, a
world-class manufacturer of aircraft, it would still take 7 years to re-educate
them.  This is a story which could not be comprehended in Japan's industrial
circles.

The United States wants everyone to buy American-made semiconductors, and these
are even being used in Japan, but the number of defective ones is amazingly
high.  When we complain, the answer is: Japan is the only country that is
complaining, nobody else has any complaints.  It leads me to think that there
is no hope for the U.S.

The manufacturing defect rate in the United States has improved somewhat
recently, but it is still 5 to 6 times higher than that in Japan - it used to
be 10 times higher.  The report by the task team in the Pentagon also admits
this.

To contrast this with Japan, I would like to insert the following episode.

This is an episode illustrating the exceptional knowledge and decision making
capability of one female employee of the Kumamoto plant of Nippon Electric
Corporation(NEC).  For one reason or the other, the rate of rejects at the
Kumamoto plant had been higher than it was at other NEC plants.  No matter how
hard they tried, they could not get the reject rate down.  If it could be done
in other plants, why couldn't it be done in Kumamoto?  There were all-hands
meetings with the plant supervisor daily on this problem.

One day, a female shift worker at the plant stopped at a crossing for the
Kagoshima Line which ran in front of the factory.  This was on her way to work.
It was a rare event, but this day, she had to wait while a long freight train
passed.  Rumbling vibrations were sent through her legs as the train passed.
The thought crossed her mind that these vibrations might have some sort of
adverse effect on the products made at the plant.  While she was working, she
paid attention to the time and stopped when a train was scheduled to pass by.
In the factory, however, she couldn't feel anything unusual.  She still
wondered, however, if the machines were not being affected.  She reported her
concerns to the foreman, suggesting that the precision machinery in the plant
might be so affected.

The plant supervisor said, "That's it."  He reacted immediately by digging a
large ditch between the plant and the railroad tracks and filling it with
water.  The result was a drastic decline in the number of rejects.

That woman was 18 years old.  This woman took pride in the products made by her
company and identified with it.  It is my feeling that this type of result is
due to the vast differences in our formal education system.

In any case, when it comes to economics among the free world countries, the
basis for existence is economic warfare, or, if that is too harsh of [a] word,
in economic competition.  It is probably natural, therefore, that various
cheerleading groups of the other party will rough you up by calling you unfair,
but we cannot stand still and be defeated just because our adversary is making
a lot of noise.  This is exactly the position Japan is in today.

6.0 IS AMERICA A COUNTRY WHICH PROTECTS HUMAN RIGHTS? (Morita)

6.1 Workers' Rights Are Ignored by American Companies
American demands of Japan may increase in the future but America has a great
many defects of its own, to which we must continuously direct its attention.

My long observation of American corporations leaves me puzzled about American
human rights legitimacy.  Human rights are held to be such high moral values in
America and it preaches on the subject continuously all over the world.
America has been criticizing and condemning nations such as South Africa and
Afghanistan on human rights issues; however, I must ask Americans if they are
applying these same standards to their own workers.

American corporations hire workers right and left and build new plants all over
whenever the market is bullish, in an attempt to maximize their profits.  Yet
once the tide shifts, they lay off workers simply to protect company profits.
These laid-off workers have nothing to do with poor market conditions.

American corporate executives are of the opinion that it is a corporate right
to pursue maximum profits and that fired workers should be able to live on
their savings.  However, people do not work for wages alone.  Work has more
meaning to most people than just as a means of subsistence.  A Japanese worker
has a sense of mission in holding his job for his lifetime as well as
supporting the corporation which provides him with meaning to his life.  This
may well not be the case in America.  American workers may only expect a
comfortable wage for their work.  However, this attitude could change.  People
can easily develop loyalty to a group or to a company to which they belong,
depending upon conditions and guidance provided.  This sense of loyalty to the
company is a formidable asset.  Repetitive hiring and firing denies any
possibility of cultivating a sense of loyalty.

I must ask American executives if they regard workers as mere tools which they
can use to assure profits and then dump whenever the market sags.  It seems
that workers are treated simply as resources or tools rather than as human
beings with inalienable rights.  I would like to suggest that they should first
do something to protect the human rights of workers in America before they
start asking other nations to protect and enhance the human rights of their
citizens.  There are good reasons why American labor unions must be
confrontational in protecting their members and attempting to assure maximum
wages during periods of employment since they have no assurance that the jobs
will continue.  Attitudes of executives are not actually much different than
those of the union to the extent that they grab whatever they can - as much as
half the company's annual profits in the form of huge bonuses, claiming that
this is just since they were responsible for the profits.

A corporate chairman with whom I am acquainted, complained that he has no use
for all the money he receives.  His company is doing well and his income is in
the multi-million dollar a year range.  His children are all grown and he and
his wife already have vacation villas, a yacht and a private airplane; he said
they just have no way to spend any more money on themselves.

Japanese executives work morning to night to improve the position of their
companies, and yet the majority of their salaries are wiped out by taxes.  The
income gap between American and Japanese business executives is astounding. In
Japan, even if one works very hard to increase his income to assure himself of
some of the amenities of life, there is no way that he could expect to equal
the luxuries enjoyed by American executives.  Mr. Matsushita, probably the
wealthiest man in Japan, when traveling abroad with his secretary, uses regular
commercial flights.  Having a private plane is simply out of his realm of
consideration.

There is some talk in Japan concerning levying taxes on profits generated by
the founder of a corporation.  I am opposed to this proposal as I believe the
spirit of free enterprise must be protected. While an unbridled pursuit of
personal gain is not ideal, those who have created new business through
extraordinary effort and who have made this contribution to society, should be
rewarded financially to a certain extent as this will provide encouragement to
young people, motivating them to follow their dreams and create new industries.
The current popular idea that everyone belongs in the middle class and the
wealthy are suspect may undermine the very basis of a free economy.  The
Liberal Democratic Party, however, tends to accept this premise, as put forth
by the opposition for the sole purpose of parliamentary manipulation, which is
a shame since they have a 300-seat majority.

Japan has been a practicing free economy and a good majority of the people do
in fact belong to the so-called middle class, which I think is marvelous. We
have no real social classes and everyone is free to choose whatever profession
or occupation they wish.

Today in Japan, nearly all company executives dine out on company accounts and
ride in corporate-owned cars.  As a child, I never saw this kind of lavish
living by corporate executives such as my father. He had a car and a chauffeur,
but they were financed directly by him, out of his own pocket.  It would be
beyond his comprehension to use a company car and driver for his personal use.
I am not particularly opposed to such benefits enjoyed by today's executives,
as they can be correct rewards and incentives.

American corporate practices, from my personal observations, are extreme. An
example is the so-called "golden parachute," which is the ultimate executive
privilege.  When one's reputation as an executive is well established, and he
is hired by another company, his contract may well contain these "golden
parachutes."  The executive may demand a certain percentage of corporate
profits as his bonus, or perhaps some stock options.  Upon retirement, he may
still receive his salary for a number of years.  Should he pass away during
this period, his wife may be entitled to receive all or a percentage of these
benefits. Should he be fired, for whatever reason, he may still collect his
salary under his contract.  A contract is a contract and "golden parachutes"
are a part of the system.

So even though the corporation may stall or crash, the executive is equipped
with his "golden parachute" and is thereby guaranteed to land safely and
comfortably.  He may go to Florida and elsewhere to enjoy a rich retirement
life.  Who suffers?  Who suffers is America: the American economy suffers from
this outrageous system.

6.2 American Executives Prefer Immediate Rewards
Poverty is very visible all over America, particularly among blacks and
Hispanics.  The minority issue is a crucial one in America.  The gap between
rich and poor is enormous.  Only one percent of the population controls 36% of
the national wealth, an outrageous condition that should somehow be corrected.

A free economy basically should assure profit to anyone who works. Yet if an
individual's gains go to the extreme, he becomes a celebrity and an egotist.
This is what I have seen to be the case in many corporations today.

Such individuals regard their employees as their own tools to enhance their
personal performance for which they collect all the rewards. Should one fail
and be fired, he will land comfortable on his feet, thanks to his golden
parachute.  As an example of an extreme case of such, a friend of mine
mismanaged his company while he was its chairman.  The company failed, but he
and his wife are leading a luxurious life, something that would never happen in
Japan.  This man simply played the American game.  He had no real intention of
remaining with that company in any case; he was only working to maximize his
personal income during that time.

I have been involved in a number of joint venture projects in America. I make
every effort to improve my joint venture situations.  I want to close the deal
as quickly as possible whenever we are involved in substantial capital
investment.  When we spend capital on facilities investment, we are entitled to
tax benefits.  I like to utilize the extra profits generated by these tax
benefits to get rid of debt service.  Whenever I suggest that, my partners ask
"why do we have to sacrifice our profits for people in the future?"

For me, the most crucial objective is to make the company healthy and free of
debt service, hoping that our successors will do the same for their successors
by availing whatever profits we get from repaying the debt, while my joint
venture partners feel that their personal gains should not be so sacrificed.
They have no intention of remaining with these companies for very long and so
they want to increase their personal income by maximizing disposable company
profits in the short run.

For example, they moved production facilities to Singapore or Japan when the
U.S. dollar was high because they could not expect to maintain high profits
when production costs were high.

This is the case in the semiconductor industry as well.  Production has been
moved out of the U.S., leaving production primarily with Japan.  This has
deprived America of the capacity for anything other than 256K bit chips.  It is
cheaper and easier to buy them from Japan rather than dealing with expensive,
unionized workers in America. These very same business executives have been
blaming the trade imbalance and the Japanese trade surplus for their
difficulties while at the same time choosing to import these products from
Japan.  Japan has not forced them to buy its products, but it cannot begin to
catch up on orders placed by American firms.

6.3 A Japanese Corporation is a Community Bound Together by a Common
 Destiny
The fundamental principles which govern a Japanese corporation are basically
different from those of an American corporation, from the viewpoint of both
executives and workers.

The structure of pre-war Japanese corporations bear some resemblance to
American corporations today to the extent that the president could fire anyone
at his discretion.  A variety of labor activities were implemented to meet such
situations.  Taxes were low and executives were leading comfortable lives, able
to have company stock allocated, assuring themselves of a comfortable
retirement.  A top executive was able to buy a house with just one bonus.  By
the time he retired, he could have several houses for rental, which alone would
have ensured a luxurious life.

After the war, General MacArthur changed Japanese labor laws as well as tax
laws, among other things, which put Japanese business executives in a different
situation.  First, they were now unable to fire employees at their discretion,
not even to reduce the size of their labor force.  At times a company must
reduce the size of the work force if it cannot afford to keep them or if they
are unproductive.

When I first found that American companies can hire and fire and rehire at
will, I wondered perhaps if Japanese companies were more charitable
organizations than profit making institutions.  However, Japanese managers have
developed a concept which, in essence binds the company, workers, and
management, into a community with a common fate or destiny.  I have explained
to American corporate managers that in Japan, once an individual is hired, he
has been hired for life and unless he commits some serious offense, the company
cannot fire him. Americans want to know how in the world we are capable of
operating profitably.  I say that since a Japanese company is a community bound
together by a common destiny, like the relationship between a married couple,
all must work together to solve common problems.

This concept of a fate-sharing community might sound particular to Japan.
However, recently, it appears to have had some impact on American corporations,
which are showing interest in the Japanese corporate management system.  They
seem anxious to absorb some of the positive elements of the Japanese system.

When I find an employee who turns out to be wrong for a job, I feel it is my
fault because I made the decision to hire him.  Generally, I would invest in
additional training, education, or change of duty, even perhaps sending him
overseas for additional experience.  As a result, he will usually turn out to
be an asset in the long run.  Even if the positive return is only one out of
every five, that one individual's productivity will cover the losses incurred
by the other four.  It is a greater loss to lose that one productive person
than to maintain the presence of the four incompetents.

In a fate-sharing corporation, one capable individual can easily carry a number
of other not-so-capable individuals.  The confidence of Japanese employees in
their company, knowing that he is employed for life, means that he will develop
a strong sense of dedication to that company.  For these reasons, Japanese
corporate executives are anxious to train their employees well, as they will be
their successors.

As the chief executive officer, it is my responsibility not only to pursue
profit, but also to create a community where those I have employed can complete
their careers 20-30 years from now with the feeling that he had truly made a
good life with the company.

Japanese company employees know that they are members of a community bound
together by a mutual fate for which they bear the hardships of today in
anticipation of a better future.  There are many company presidents today in
Japan who at one time or another served as union leaders.  This fact makes
present union leaders feel that they too may, sometime in the future, move into
management positions within their company, and therefore their long term
interests are closely tied to the company.  They do not pursue short term,
myopic profits for the immediate future.  When the company proposes a plan to
save a certain portion of profits for facility investment or to pool to the
following year, unions may well be willing to make compromises, because they
know that the future of the workers is tied to the future of the corporation.
I would like to ask presidents of American corporations if they ever heard of
any American union leaders who have become heads of corporations.  Japanese
executives have a categorically different corporate philosophy than do American
executives, who are more anxious to demonstrate profitability to please
stockholders.  I have asked Americans what, in their minds, is the meaning of
"company."  In my mind, it is a group of people conforming where interests are
shared.  I must point out that in the American interpretation of company, this
concept does not exist.  It is my firm conviction that man is created equal,
irrespective of color of skin or nationality and it is natural that my concept
of company includes the employees of my overseas Sony operations.  My
California plant opened in 1972, initially with 250 employees.  Soon after the
plant opened, we were hit with the worldwide oil crisis, which caused a
recession.  The California plant was not immune to this development and the
facility lost business and was unable to support its 250 employees.

The president of Sony America was, of course, an American and he came to me
saying that there was no other choice but to lay off some of the employees. I
refused his proposal, telling him that I would take the responsibility for
possible losses in order to retain the employees. We sent capital from the
Japanese headquarters to sustain the 250 person work force for some time.
During this period, there was not enough work to keep everyone busy, so we
developed educational programs, out of which grew not only a sense of
appreciation, but also a real emotional involvement with the company.  They
began to feel that the plant was their home, and began to clean and polish the
facilities, and take care of their work sites on their own.  These people
became the central core of the California plant, which now employs 1500 people.
They don't even talk about unionizing themselves.  American unions are
basically industrial, which means that there is always active union leaders
from outside who attempt to unionize our plant.  Our workers had T-shirts made,
with their own money, saying "WE DON'T NEED THE UNION."

The United Kingdom has a unique law which unionizes every company. Sony U.K.
is no exception.  Yet our women union members insisted, in an interview on the
BBC, that their union is different than other, ordinary ones.  This is a
positive demonstration of the feeling that we all share the same fate, no
matter where we are in the world.

In the U.S. and the U.K., most employees never have even seen their top
executives.  When I go to one of our plants, I normally mingle with the
employees and eat together with them in the company cafeteria.  This helps in
developing communication and trust.  It may be a bit difficult to expect the
same response from foreign employees, but it is still the best approach.  The
Japanese system is not completely applicable to the American system, of course.
Yet patient demonstration to show that the company truly wishes to protect
their interests, even when business is at its worst, will show results. People
tend to develop trust under these circumstances.  The best thing a company can
do is to treat its employees as dignified human beings.

6.4 The Japanese Approach Can Be Used Worldwide
European corporations appear to be treating their employees more humanely than
their American counterparts, although they are still far from the concept of
lifetime employment.  Large corporations do not hesitate to lay off employees
whenever business is down; they even close operations without notice or sell
out, treating employees as if they were tools or equipment.

There is also obvious class discrimination within companies. Engineers, for
example, wear white collars, stay in their offices, and seldom show up in the
factories.  They want to tell workers what to do, rather than donning blues and
showing them.  In my company, all workers wear the same uniforms.  I also wear
the same uniform, not only in the plants, but also at company headquarters.
All our plant managers do the same.  Those who are in training have been
instructed to walk through the plant frequently, establishing personal contacts
with the workers.  Those who become foremen or section managers are encouraged
to hold brief meetings each morning with their subordinates to read their mood
and detect problems in advance.  They are instructed to talk with those who
seem ill or depressed, to find out if they need medical care or if they are
having family or personal problems.  Should this be the case, they should be
allowed to take time off and deal with these problems first, while the other
workers cover for them.  This also helps the sense of togetherness among
workers.

On the occasion of 20th and 25th anniversaries of Sony America, my wife and I
visited all our American plants, gave talks, had dinner with our employees and
shook the hands of all our workers.  Since at some plants we had three shifts,
we had dinner three times in one day, with the night shift taking their turn at
4:00a.m.  I told everyone that we greatly appreciated their contributions which
helped make the 25th anniversary a celebration and shook everyone's hand.  I
was able to feel their response even physically. These employees told me that
this experience was something they never would have had in an American company.
I felt our Japanese approach was not foreign to them at all!

One episode made me particularly happy.  I visited one of our rather small
laboratories, and said that I wanted to meet all of its members, [when] the
head of the lab asked if he could take my picture.  He took his camera from his
desk drawer and took me to each member of his staff, introducing me to him or
her and taking our picture as we shook hands.  There were almost 80 people at
this facility and he promised to make a print for each person.  I was surprised
that this typically Japanese activity was taking place in a facility where
there were no Japanese!  There again, I felt that we are all basically the
same, irrespective of national and cultural differences.

Our style and our efforts have a ripple effect and make other members of our
company feel the Sony spirit.  I am not saying that whatever style and customs
we have developed are automatically good and acceptable everywhere. What I am
emphasizing here is that the basic attitude of a corporation and its philosophy
can be understood worldwide, and certain aspects of Japanese tradition and
style can be rooted overseas.

On the other hand, I recognize fully that certain aspects of American business
administration, such as numerical and analytical operations, are excellent as
we have sent many individuals from our company to American business schools to
learn such matters.  Combining good traditions and practices of both the
Japanese and American systems will, I believe, make for a very strong
corporation.

7.0 LET'S BECOME A JAPAN THAT CAN SAY NO (Morita)

7.1 Saying "No" Actually Represents a Deepening of Mutual Understanding
It is inevitable that Japanese companies have been establishing American
operations.  America after the era of Reaganomics is now responding to that
trend with new Bush Administration policies.  In response, Japan should now
begin to make it a habit to say no when its position is clearly negative.  It
[is] the rule in the West to say "no" whenever one's position is clearly
negative.  We are in a business environment where "well" or "probably" have no
place in normal business conduct.  I have been saying "no" to foreigners for
the last thirty years.  Clearly, the Japanese Government has missed many, many
opportunities to say "no."

Take the auto trade issue, for example.  America forced Japan to limit its auto
exports to two million units per year under the guise of voluntary
restrictions.  When the American market became more lucrative, and the number
of imported cars could have been increased, American auto manufacturers
demanded that the quota be tripled.  MITI and the Prime Minister gave in to
American demands.

In my opinion, this was a great mistake.  Both the MITI minister and the prime
minister at that time should have taken the position that the American demands
were unfair.  The Big Three had already increased their profits enormously and
individuals such as Lee Iacocca and Roger Smith were receiving more than a
million dollars each in bonuses. They simply demanded special treatment in
order to increase profits from the Japanese imports which they sold under their
company brands when they requested that the quotas be tripled.  That was the
time for Japan to have said "you are being hypocritical, criticizing others as
unfair when in fact what you are demanding is what is really unfair." The
timing was crucial; unless one registers opposition or negative reaction at
precisely the right time, Americans take the situation for granted and later
insist that they were right as no opposition was registered at the time of the
demand.  This has always been the case in the past.

The trade imbalance is another case which should be scrutinized as to whether
or not American demands are based on fact and reality.  I once asked Americans
to investigate what Americans had been importing from Japan.

American imports from Japan are mostly products which require a high tech
capacity to produce.  Many of these products fall into the area of military
procurement, but it is true that even the private sector is buying Japanese
products which are technologically indispensable. Even some of the inexpensive
home electrical appliances may be obtained from Japanese manufacturers within a
short time frame if they require high technological skills in the production
process.

America has left the production responsibility with Japan, resulting in a heavy
dependency upon Japan.  American politicians only talk about the results of
this situation, blaming Japan for the trade deficit to get votes.  Yet it seems
that these same politicians don't even know specifically what it is that
America buys from Japan.  If they took the time and the effort to seriously
investigate the matter, they could not condemn Japan so out of hand.

Japan should tell America that it may buy these quality products irrespective
of the exchange rates, even when the U.S. dollar falls to the 100 [presumably
yen] to 1 ratio.  Artificial manipulation of the exchange rate does not benefit
the American economy.  Such products as transistors, which Sony originally
marketed, may today be purchased anywhere outside Japan, and so are not a
matter of friction between the U.S. and Japan.  Products recently developed in
Japan are not as easily obtained elsewhere.  There are some things that can
only be found in Japan and Japan cannot be blamed for over-exporting.  Those
who say otherwise simply do not know the facts.

Computer terminals are in short supply and are being rapidly developed in
Japan.  Japan should let America know what the situation is and make the U.S.
realize that the relationship between the two nations is increasingly mutually
dependent.

My purpose in advocating saying "no" is to promote that awareness. "No" is not
the beginning of a disagreement or a serious argument.  On the contrary, "no"
is the beginning of a new collaboration.  If Japan truly says "no" when it
means "no" it will serve as a means of improving the U.S.-Japan relationship.

7.2 National Characteristics Which Make It Difficult for the Japanese to
 Say "No"
The question arises as to who should say "no?"  Japan's Confucian background
makes it very difficult for its people to say "no" within the context of normal
human relationships.  In a traditional hierarchy, subordinates dare not say
"no" to higher-ups without violating normal courtesy.  The higher-up takes a
"no" from a subordinate as insubordination. In a staff relationship, "no" is
something to be avoided in order to maintain smooth human relationships.

Living in a homogeneous society since childhood, we Japanese have grown up
without practical experience in quarreling and fighting in a heterocultural
environment.  Many of us feel that others will eventually understand our true
feelings on an issue without [our] verbalizing them.  In short, we expect a lot
when it comes to mutual understanding.  Americans may go directly to their boss
to offer an explanation when they feel they are not properly understood.
Japanese, on the other hand, even if they feel they are not properly
understood, remain hopeful that they will eventually be understood or that the
truth will reveal itself sooner or later.  They do the same with foreigners in
foreign countries.  They feel that sincerity and effort should automatically be
reciprocated.  In my mind, this can only happen in Japan, but never in foreign
countries.  Wordless communication and telepathy will just not happen.

I admit that I may be more westernized than most Japanese, since I believe that
we should be more straightforward as we become closer, and that a serious
quarrel need not destroy a friendship.  This may not be accepted in a
traditional Japanese relationship; we avoid serious confrontation by turning
away from the cold facts.  Instead, we tend to make loose compromises.  It is
quite simply not our tradition to say "no" to our friends.

We should not expect to find a similar understanding from foreigners concerning
this particular Japanese mentality.  It is too easy to expect understanding of
one's opposition without using "no."  I could say it is a Japanese defect to
expect something without using the rational verbal procedures.

If you stay silent when you have a particular demand or an opposing position to
express, the other party will take it for granted that you have no demands or
opposition.  When you close your mind to the outside, remaining in a uniquely
Japanese mental framework, you will be isolated in this modern, interdependent
world.

8.0 LET'S NOT GIVE IN TO AMERICA'S BLUSTER (Ishihara)

8.1 Statesmen Ought to Make Best Use of All Available Cards
America has renewed its bluster in the last year.  Politicians must sense that
they will win more votes bashing Japan than bashing the Soviet Union.
Criticism of Japan by U.S. politicians has taken on a rather hysterical tone
these days.  I experienced it personally when I was there and met with
politicians who told me that there was a new power shift between the U.S. and
U.S.S.R., as if this development should scare Japan somehow.  These same
politicians indicated that since both Americans and the Soviets are white, at a
final confrontation, they might gang up against a non-white Japan.

Japan should never give in to such irrational threats.  Japan also holds very
strong cards in high technology capabilities which are indispensable to
military equipment in both the U.S. and U.S.S.R.  Yet Japan has never played
this card to improve its position vis-a-vis the U.S.  Japan could well have
said "no" to making available specific technology.  Japan has substantial
national strength to deal with other nations, yet some of the powerful cards it
holds have been wasted diplomatically.

I happened to be in America at the time the U.S. Congress passed a resolution
to impose sanctions on Japan on the semiconductor issue. Congress seemed to be
very excited, almost in the same mood as was the League of Nations when it sent
the Litton Mission to Manchuria to observe Japanese activities there in
relation to the Manchukuo incident.

I talked with members of Congress in this tense atmosphere, and I did not feel
they were conducting matters on a rational basis.  Some Congressmen were
actually brandishing sledgehammers, smashing Toshiba electronic equipment, with
their sleeves rolled up.  It was just ugly to watch them behave so.

I commented at that time that the U.S. Congress is too hysterical to trust.
their faces turned red in anger and they demanded an explanation.  I told them:
"Look -- only a few decades ago you passed the Prohibition Amendment. No
sincere Congress would ever pass such irrational legislation."  They all just
grinned at me in response.

Yet I must admit, that it was Japan who aggravated the semiconductor issue to
such a low level, by not saying "no" on the appropriate occasions.

After he was elected to a second term, Mr. Nakasone promised America that Japan
would avail highly strategic technology without giving adequate thought to the
significance of that kind of commitment.  The strongest card, which he should
have played, was virtually given away free to America.  He probably wanted to
impress America, hoping for a tacit reciprocity from a thankful U.S.
Unfortunately, it was only Mr.  Nakasone who recognized the value of that card
at the time.  Both the Liberal Democrats and opposition parties overlooked the
significance of this issue.  I assume that the leaders of those parties, such
as Takeshita, Miyazawa and Abe did not know it either.  It is such a pity that
Japan's politicians are not aware of the political significance of Japan's high
technology capabilities.

In reality, Japanese technology has advanced so much that America gets
hysterical, an indication of the tremendous value of that card -- perhaps our
ace.  My frustration stems from the fact that Japan has not, so far, utilized
that powerful card in the arena of international relations.

What Mr. Nakasone got out of the free gift was Reagan's friendship, so-called.
We all know that love and friendship alone cannot solve international conflicts
and hardships.

8.2 Nakasone Bungled the Relationship
I truly regret that Japanese diplomacy has been based on a series of "yeses"
instead of skillful manipulation of strong ace cards.  Former prime minister
Nakasone has done a substantial disservice to Japan in terms of his handling of
relations with the U.S.  These are among his most unfortunate mistakes.  He
boasted of the so-called "Ron-Yasu" relationship as if he had succeeded in
bringing about a skillful policy toward the U.S.  In reality, he was simply a
lowly yes-man to Reagan.

It was actually I who introduced Mr. Nakasone to Mr. Reagan.  I asked one of
Mr. Reagan's assistants if he ever recalled a "no" from Nakasone to reagan. He
immediately replied he did not know of any, and Mr. Nakasone was a "nice guy
with a sardonic smile."

Former Prime Minister Nakasone was in a position to know that Japan's leading
edge technology was superior to that of the U.S.; so much so that Americans had
become nervous concerning the magnitude of Japan's superiority in the area.
Yet he still did not say "no."  Was he taken advantage of?  Did he have some
weak spot as did the prime minister (Tanaka) at the time of the Lockheed
scandal during the Nixon Administration?  Otherwise, Japanese leaders who hold
such high cards should be able to play them in dealing with American demands.

The FSX, the next generation of fighters, developed by Mitsubishi Heavy
Industries during the Nakasone era, has become another source of controversy in
the U.S. as it relates to defense matters.  Further development of the FSX
appears to be quashed by the U.S.  I am unaware of any deals made under the
table, but there is considerable frustration in Japan over the matter.

Mitsubishi Heavy industries is a conglomerate with a wide variety of technology
used in manufacturing advanced products.  The chief engineer there is a
contemporary of mine who developed the most advanced land-to-air missile.  He
is also the man responsible for the design of the next generation fighter and
he believes that Japan should have its own capacity to provide such equipment,
which of course astonishes Americans.

The FSX is a marvelous and formidable fighter.  No existing fighter, including
the F-15 and F-16 can match it in a dog fight.  I recall when Secretary of
Defense Weinberger became serious about quashing the FSX Japanese development
plan, simply out of fear.

Unfortunately, Japan has not yet developed a powerful enough jet engine,
although I advocated such development while I was a member of the Upper House.
Japan still must purchase jet engines, which are mounted on the F-15 and F-16.
If America gets really nasty, Japan could buy engines from France, which is
quite anxious to export military equipment (at the same time that that
country's president is advocating truces all over the world, I might add).  If
France is reluctant to sell what we need, I would not mind going to the Soviet
Union, although the quality of the Russian engines is not particularly
impressive.

New Mitsubishi-designed jet fighters equipped with Russian engines may only
have a top speed of 95% of existing F-15 and -16 class fighters, so one might
think them inferior.  On the contrary: their combat capability is far superior
in a dogfight situation.  It can make a 380 degree turn [sic] with a third of
the diameter needed by other top fighters.  The F-15 and -16 require 5000
meters; the Mitsubishi fighter only requires 1600 meters.  Just think of war as
a game of tag.  What is necessary is not maximum speed but great maneuver-
ability.  Mitsubishi's FSX fighter can get right on an enemy plane and send
heat-seeking missiles with 100% accuracy.  Incidentally, there are two types of
air-to-air missiles, heat-seeking and radar-controlled.  The radar-controlled
type may even fail to hit a jumbo jet, while the heat-tracing type can
fine-tune its direction to head for the enemy's source of heat.

The FSX was a surprise to Americans, as were to Zero fighters at the beginning
of the Second World War.  They never expected to see such an advanced fighter
as the Zero, which virtually controlled the air at the beginning of the war.
That such a formidable weapon as the FSX is in production today outside the
U.S. came as a shock to Americans. The Japanese FSX is equipped with four
vertical fins, similar to a shark's fins.  Each acts as a steering mechanism,
like the steering wheel of a four wheel drive [four-wheel steering intended,
presumably] automobile that can make a complete turn in a small area without
moving back and forth.  Such a marvelous idea probably is not the monopoly of
Japan, but it was a Japanese manufacturer who developed the idea to reality,
thanks to Japanese advanced high technology.

Russian fighters are also equipped using Japanese know-how, especially in the
areas of ceramics and carbon fibers.  Special paints on American reconnaissance
planes which assist in avoiding radar detection are also made in Japan.

Shocked by the high standards of the FSX, I guess that the U.S.  pressured Mr.
Nakasone, probably citing his earlier commitment on technology.  His submission
to American pressure eventually caused the mothballing of the FSX, to be
replaced by future products of a joint U.S.-Japan development plan.  In
November 1988, the governments signed an agreement that set the course for the
joint development of the FSX; an agreement which leaves many unsolved problems
at the industry level.

One of the manufacturers involved, General Dynamics, was very anxious to assume
the initiative on the project, dividing it up among others. It met with
resistance from Mitsubishi, and General Dynamics came up with a plan that would
separate the development of the left and right wing -- a very peculiar
approach.

In short, America wants to steal Japanese know-how.  They cannot manufacture
the most technologically advanced fighters without advanced ceramic and carbon
fiber technology from Japan.  That is why America is applying so much pressure,
attempting to force Japan to come to American terms.  Some of Japan's industry
representatives appear willing to deal with the Americans under the table,
probably with the good intentions of smoothing U.S.-Japan relations on the
issue.  I happen to disagree with such an approach. We just cannot give in on
this issue.  We must be persistent -- to the maximum degree.  If America does
not appreciate a rational division of labor on the project, we should
discontinue the project and start all over from scratch.

The joint development idea is a legacy of the Reagan-Nakasone era. Both men are
now out of power and we can retract the whole thing and tell the U.S. that we
have decided to develop our own project without its participation.  It is our
choice.  We must bluff to counter American bluff, otherwise we will continue to
be the loser.

I brought this subject up the other day to Mr. Nakasone.  He responded, "Well,
you had a pretty sharp interest in that issue at that time."  I said that I was
"probably the only one concerned about the issue at the time."  Mr.  Nakasone
then insisted that he made the decision to compromise in order to maintain good
U.S.-Japan relations. He also admitted that America was then already very much
afraid of further Japanese technical advances.  Well, compromise is fine, but
in reality this was not a compromise: it was a sell-out -- a simple sell-out of
Japan's interests.

I don't regret it any less when we make the silly mistake of not saying "no"
especially when we hold the strong cards.  Such freebies are now taken for
granted and America comes back with more bluff.  On the record, U.S.T.R.'s
Yeutter stated that the "application of high pressure is the best way to
manipulate Japan."

My position may draw some criticism in Japan, where it probably will be said
that I am playing with dynamite in dealing with America in this fashion. It
goes without saying that an equal partnership must be carried out without
humiliating pressure or compromise as the result of such pressure.  This is the
reason I am advocating that Japan say "no."  "No" is an important instrument in
the bargaining process.

8.3 Diplomacy Should Be Free of External Pressures
Diplomacy which lacks the "no" factor cannot be diplomacy for the benefit of
Japan.  Japan has a solid basis for saying "no" on many occasions.  All we must
do is play our cards wisely, playing our ace intelligently.  Japan is very poor
at diplomatic tactics.  It is a wonder too me that Japan has failed to
recognize that its initiatives are instrumental in the ultimate decision-making
process in the international arena.

Mr. Glen Fukushima, an American of Japanese descent in the office of the
U.S.T.R. (Deputy Assistant U.S.T.R. for Japan and China), who was acquainted
with Senator Aquino of the Philippines while both were at Harvard, is one of
the most capable Asian specialists.  His wife is an intellectual Keio
University graduate, who prefers to live in Japan, forcing Glen to commute to
Japan two or three times a month.

On one occasion, I had dinner with him and asked him what America's next
Japan-bashing scenario would entail.  He replied that the U.S.  would take up
the distribution issue since this cannot be rectified by Japanese politicians
without pressure from the U.S.  I have to use American pressure in order to
accomplish a national objective, yet, I must admit that the distribution system
is one of Japan's biggest headaches today.  There is no question that the high
prices in Japan are caused by the distribution system itself, which is made
worse by Japanese politicians.

There are domestic areas where we Japanese must say "no" also, even before we
say "no" to outsiders.  The liberalization of rice is one such issue. Opinions
on the rice issue sharply divide politicians such as I, whose constituents are
urban, from those representing farmers.

Former Minister of Agriculture Sato is a good friend of mine, but his advocacy
of food security is becoming diminished.  Inevitably, mutual dependence is
becoming more and more a reality in our world today. America was not even able
to place [a] ban on exports of grain to the Soviet Union when the Russians
invaded Afghanistan.  There would have been too much pressure from American
farmers.  If that is the case, it would probably be practically impossible to
put a ban on agricultural exports to Japan.  The rice issue has its sentimental
aspects in Japan as well as its practical aspects, which make the overall issue
more complicated.  Yet it is obvious that we must liberalize the market. Such
is also true of construction projects.  It is inevitable that we allow foreign
construction firms to participate in Japanese public construction projects.
Japanese general contractors have been maintaining prices as much as 40% higher
in comparison to foreign bidders, due to bid-rigging traditions to assure a
monopoly on business for themselves.  There is no way these practices could
ever be free of foreign criticism.

In the course of my conversation with Glen Fukushima, I asked whom among the
Japanese negotiators he considers the best.  He immediately came up with the
name of MITI's Kuroda, whom the Japanese press used to criticize for his tough
positions.  The press claimed that his participation aggravated the problems
with the U.S.  The Americans criticized him for being stubborn. Strangely, the
American negotiator named him the most effective.  He is stubborn and is able
to say "no" decisively whenever he should do so.  The Americans usually try to
overpower negotiations by increasing pressure.  But Kuroda does not feel that
he must say "yes" to American pressure.  America is a giant in many ways, and,
in many ways, Japan is a dwarf.  This obvious contrast has been exploited by
the Americans often in the past.

Mr. Kuroda kept pointing out that irrational pressure is not always the result
of reason or logic, and reinforced this position by withstanding increased
pressure.  His "no" is not a no for its own sake; he always states his reasons.
This is the proper approach and attitude in negotiations.  In the past, there
have been allegations that Japanese logic and opinions have not made any sense
to the other side.

When the opposing side points out that Japanese opinions and demands have no
logical basis, all of a sudden the illogical Japanese start saying "yes, yes,
yes..." in a panic.  But these "yeses" do not necessarily mean yes in the sense
of positive assertion.  At any rate, the other side then comes to the
conclusion that Japan will not take action unless pressure is placed on them.
This is a rather unfortunate situation for the people of Japan.  The Japanese
image of being soft in the face of pressure does not help Japan's diplomatic
efforts at all.

I have often suggested that at least half of Japan's diplomats stationed abroad
be civilians.  Those who are in business and other professions who have dealt
with foreigners are in a better position to represent the interests of Japan
than are career diplomats.  Send Mr.  Morita to America as our ambassador: a
brilliant idea!  But it should not be just an idea.  I truly believe that it
would be most beneficial to the U.S.-Japan relationship to have such an
ambassador from Japan to the U.S.

9.0 THE U.S. AND JAPAN ARE "INESCAPABLY INTERDEPENDENT" (Morita)

9.1 No Way To Avoid the Trade Frictions
Recently the expression, "inescapable interdependence" has been heard quite
often among Americans.  If we dare to explain this concept in a more extreme
way, perhaps we can say it's a "fatal attraction".  With this trend now
prevailing in the world, we have no choice but to live cooperatively. Everyone
on earth, not just the United States and Japan, is mutually dependent and this
is unavoidable.  This is the times that we are facing now.  What does
cooperation mean?

A Japanese tends to say, "Let's work together".  But I often wonder whether
they really understand its meaning.  This can be applicable to Americans as
well.  We are at home using this expression but it seems to only be used as a
convenience.  Furthermore it is out of the question to force "cooperation"
through threats.

To cooperate means to maintain harmony.  It is not harmonious to force your
adversary.  When they cope with you, you too, must cope with them.  You have to
give up some of your interests; you must abandon something.

I tell people whenever I have a chance that we know what it is to be selfish
but hardly anybody is aware when he himself is being selfish. We say that one
is selfish but actually this person probably has no idea that he is perceived
as such.  In this sense, Japan also can be thought a little bit selfish by
other countries, although we hardly have such ideas.

Looking for the reason, we are so perceived, the opening of the domestic market
can be one example.  Everyone agrees that we should open our markets to foreign
traders, but when it comes to individual, this is hard to actualize since
someone says, "no, I cannot accept this", and then someone says, "no, I cannot
accept that."  Although at summit meetings, Japanese leaders assure others that
they will do their best, and they actually do try to open the market.  In the
end, however, this is never actualized since their promise goes against
domestic interest groups and they are forced to back down.  Only lip-service
followed by no achievement might result in being called "liars" and this is
surely worse than "selfish".

The development of communication technologies means this is a shrinking world
and any country will be left alone if it does not talk frankly to its people
and friendly countries about the compromises that they must accept.

Free people in the free world ask for their freedom but at the same time they
respect the freedom of others.  And I think it is genuine freedom to think "we
should abandon some so that we can respect others."  It will simply increase
friction if we just look out for our own benefit, and put priority on winning
the race based on the premise that we simply can focus on our interests alone
since we are in the world of free economy.

We should also recognize that friction seldom occurs with those who are far
from you.  Friction occurs as we move closer.  We cannot escape from the trade
friction as long as we belong to the world of "inescapable interdependence".

9.2 Japan's Central Role is Asia
The closer we become, the harsher the friction can be.  So it would be wise for
us to prepare for problems with neighboring Asian countries.

I went to Singapore recently to attend a ceremony marking the opening of our
new plant, and had a chance to talk with President Lee Kuan Yew who has been a
friend for a long time.  He invited me to his home, we talked over dinner and I
stayed with him.

The plant our company opened this time in Singapore is operated automatically
by robots.  We use materials Singapore supplies and employ able engineers
graduated from good schools in Singapore, producing special parts in large
numbers.  The plant itself will be a foothold to supply the products all over
the world.  When I proudly held forth my new plant, he was very pleased and
said that in the past when Japanese firms opened plants in his country, they
needed a large number of employees, where they in fact have never had enough
personnel.  Because of the nature of his country, that is, Singapore is a small
island, this caused wage increases at a drastic pace.  This is what they had
wanted; a plant with sophisticated technology.

Transferring our technologies, not teaching management, I believe, is the best
way to alleviate friction between Southeast Asian countries and Japan. These
countries, NICS, then NIES, are now the Four Tigers or Five Tigers.  It might
be too much to say they developed thanks to the Japanese economy and industrial
technologies, but I believe we contributed to them in such a way that
contributed to their current prosperity.  From now on Japan will need to take a
major role in Asia. You are already able to see this is happening when you
recognize that Tokyo has taken on a major role as a finance and money center
like New York and London.

In the past, we yearned to go to New York when we were young. Similarly, the
youth of Southeast Asia yearn to visit Tokyo or Disneyland in Japan.  I should
avoid the expression, "leadership", but Japan has begun to assume that role as
a center in Asia.

To take on the role as an initiator means we must also be able to take on the
role of arbitrator.  That is, we must think carefully what constitutes a real
leadership role in this mutually dependent world.

9.3 America, You Had Better Give Up Certain Arrogance
As you (Mr. Ishihara) mentioned before, rapprochement between the United
States and the Soviet Union and Japan's involvement in their military
strategies because of its highly-sophisticated technology directly affects new
trends on the world scene.

I do not think anybody imagined a decade ago that these two superpowers would
be mutually dependent on each other in a military sense and that there would be
a strange structure in the power balance among the United States, the Soviet
Union, and Japan.  Nobody can deny that we are going to have a totally new
configuration in the balance of power in the world.

Facing this, most important to Japan in the practical sense is the relationship
between Japan and the United States.  Japan needs the United States.  I think
the United States need Japan as well.  It is a bond we can never cut, and this
might be the "fatal attraction" between us.  Since we can never separate, we
had better look for the way to develop through cooperation a healthy
relationship through cooperation.  And we want to ask you Americans, "what is
going on now in your country?  Do Americans really understand the meaning of
'freedom' and the role of Japan which is so necessary to the United States?."
When you see present conditions, it is obvious that the United States is not
strong enough in a fundamental and structural sense.  So, I think what is most
important is that we ask them frankly as equal and not as a subordinate, "Are
you really sure that you are all right?"  We will be in trouble as will the
whole world if the United States is not strong enough in the fundamentals and
this means more than talking about something that is current.  It must be
recognized by Mr. Bush as well.  In this sense, it is important for Mr.
Takeshita to deliver our message correctly at the coming summit. In my
understanding, however, these summit meetings are held according to an
itinerary prepared at the working level and they decided what was supposed to
be said by the leaders.  In negotiations among business leaders, we, top
management hold discussions face to face, saying "yes" or "no", or "if you do
that we will do this."  However, we have a tendency to prepare answers for
negotiations even in business world in Japan.  Take my case, for example.  Once
a chairman of a large Japanese firm was visiting me and I planned to talk to
him face to face.  Then, someone from that office called us and asked what I
was going to talk about when we met.  "Our chairman is going to say such and
such.  How will you respond?"  They wanted to prepare all answers beforehand.
I do not think we need to have meetings if the content is planned beforehand.
I want Mr. Takeshita to say correctly how we, Japanese, see the present
situation in the United States and tell them clearly what we want to do.  I
think we should tell them, "please do not cling to the image that you are the
superpower, but rather look for the way to get your economy on the road to
recovery." We should tell them, "we are going to back up your dollar, so face
the fact and issue yen-bonds, for example, as Carter Administration issued
pound-bonds."  Americans have to abandon the idea, such as, "our federal
obligations do not bother us since we can print more green backs."  They have
to change the way they think about their own economy.  To this end, we Japanese
must deliver the message, "if you cannot make both ends meet, we cannot
either."  We must do this even if it takes time to make them understand.

It is high time to let them know we might go bankrupt together if things are
not worked.  The United States and Japan relationship is in serious trouble.
Because of our historical discipline, Japan has adhered to the principle that
"silence is golden," but I believe Japan must insist that the United States do
what must be done.  An outspoken person like me is easily criticized from every
corner and I am sure Mr. Ishihara has had the same experience since he is also
very outspoken.  But to be silent and to put up with things do not work at all
in the West.  As Ishihara has suggested, I think we should say what we have to
say.  If not, I am afraid we will lose our own identity as Japanese in the
world.

10.0 AMERICAN ITSELF IS UNFAIR (Morita)

10.1 America Lacks Business Creativity
Americans and Europeans are always saying "We're getting ripped off by Japan.
They take the ideas we have invented, make products, and then the onslaught
comes.  We are being damaged, they're disgraceful." Japan has certainly done
better more recently, but the U.S. and Europe are very much advanced in basic
research.

Last year, I was invited to speak to about 100 researchers who worked at the
Bell Laboratories at ATT.

The Bell Laboratories have about 7 people who have won the Nobel Prize. To me,
it seemed that I would be speaking before some of the greatest men of our time.
Prior to the speech, I was shown around the Bell Laboratories, where a number
of wonderful research projects were underway.

As you must know, the transistor and the semiconductor, which are at the root
of the current revolution in industry were invented at the Bell Laboratories.
It really brought home to me how wonderful America was.

The basic message I brought that day was that this type of research was
extremely significant academically in terms of both science and culture, but to
be significant from the standpoint of business and industry, two other types of
creativity, in addition to the creativity required to make the original
invention, were absolutely necessary.

Industry requires three types of creativity.  The first, of course, is the
basic creativity necessary to make technological inventions and discoveries.
This alone, however, does not make for good business or good industry.

The second type of creativity that is necessary is that involving how to use
this new technology, and how to use it in large quantities and in a manner that
is appropriate.  In English, this would be called "product planning and
production creativity."

The third type of creativity is in marketing.  That is, selling the things you
have produced.  Even if you succeed in manufacturing something, it takes
marketing to put that article into actual use before you have a business.

The strength in Japanese industry is in finding many ways to turn basic
technology into products and using basic technology.  In basic technology, it
is true that Japan has relied on a number of foreign sources.  Turning
technology into products is where Japan is number 1 in the world.

Sony was the first company in Japan to license the transistor patent from Bell
Laboratories, back in 1953.  At that time, the transistor was only being used
in hearing aids.  We were repeatedly told to take this transistor and
manufacture hearing aids.

When we brought this new transistor back to Japan, however, Mr. Ibuka of Sony
said, "There is not much potential in hearing aids, let's make a new transistor
and build radios."  At that point, we put all of our energies each day in
developing radios which used transistors.  One of our researchers during this
development effort, Mr. Esaki, subsequently went to work for IBM where he
earned a Nobel Prize, but it was at our company where he did work worthy of the
Prize.  There are a number of Japanese who have received Nobel Prizes, but
Esaki was the only one who worked for a research laboratory of a company.  We
poured money into development of new transistors, and developed small radios
for the market, an effort that was worthy of the Nobel Prize.

It was an American company, however, who made the first transistor radio. I
became a salesman, and took my product with full confidence to the United
States to sell it.  Prior to this sales effort, the newest invention was a
vacuum tube type of amplifier which required a lot of space.  When the American
company, which was a famous radio manufacturer, was initially rebuffed by
people telling him "since we have this great sound and large speakers, who
would want to buy your little radio?", that company just quit trying to
manufacture transistor radios.

We, however, had something else in mind as a way to sell these radios.
"Currently in New York, there are 20 radio stations broadcasting 20 different
programs during the same time frame.  If everyone had their own radio, then
each person could tune in to the program he or she wanted to listen to.  Don't
be satisfied with one radio for the whole family, get your own radio.  The next
step was to do the same for televisions."  This was a new marketing concept.
One radio for one person became a kind of catch phrase in this campaign and the
result was that Sony transistor radios became famous throughout the world.

While it was true that Sony was second in developing the transistor radio, the
company who did it first lacked the marketing creativity, so without much
thought, they simply quit and pulled out of the market.

America has stopped manufacturing things, but this does not mean that they do
not have the technology.  The reason why the link between this technology and
business has not been firmly connected is because they lack the second and
third types of creativity, turning products made with the new technology into a
business.  I feel that this is a big problem for them.  This exact area happens
to be Japan's stronghold for the moment.

When I went to speak at the Bell Laboratories, I got the chance to look at a
lot of their research on advanced technology.  I felt that they may well come
up with something new that was even more important than the transistor, but
since Bell Labs is a part of ATT, they are not thinking of anything except
telecommunications applications. There is not one person there who is thinking
about how to use the new technology they are developing as a business.  I think
that this is one area where the U.S. comes up wanting.  It is my feeling that
even though times are good in American now and employment is up, the time will
never again come when America will regain its strength in industry.

There is a television network in the U.S. called CBS.  CBS has a weekly program
which airs every Sunday evening called "60 Minutes," which has a very high
viewership rating.  This is a news program which devotes segments just under 20
minutes to various stories and opinion from around the whole world.  More than
10 years ago, I was on the program.  This is a program that takes a lot of
money to produce.  A crew followed me around Europe for about 6 months to
prepare the segment.

Now they want me to do another one.  A cameraman followed me to London, and
when I went to Singapore, they followed me there too.  The other day, a famous
and beautiful interviewer in the U.S., Diane Sawyer, came to Japan to interview
me for the program.  We spent a long time in front of the TV cameras, and the
questions grew sharper. This made me mad and at the end, it was like we were in
a fight.

She asked me what I thought of Lee Iacocca.  Since this is a program he would
be sure to see, I was frank in my statements.  I said he was a disgrace, and
that he was unfair.  Iacocca comes to Japan and says Japanese are unfair.  Very
recently, he headed his sentence with, "Let me make myself very clear," and
then he went on to slander Japan.  I know he wrote that book which labeled
Japan as "unfair" but I think it is Iacocca who is unfair, and that is what I
said.

When I was asked why he was unfair, I answered clearly, in front of the camera.
The president of a Chrysler company came to Japan.  I had met this person
before.  I knew he was involved in selling Chrysler auto- mobiles, so I asked
him how sales were going.  He turned to me and said quite plainly that he had
not come to Japan to sell cars, but he had come to purchase Japanese parts and
engines.  He said he had come to Japan to buy Japanese products so they could
sell them in the U.S.

At the present time, the three big automobile manufacturers have purchased
250,000 automobiles from Japan in 1987.  How many have they sold to Japan?
Only 4,000.  They make no effort at all to sell their cars in Japan, and then
call Japan unfair because Japan sells too much in the U.S. and Japan will not
buy their products.

One of the reasons why U.S.-Japan relations are in such a mess is that Japan
has not told the U.S. the things that need to be said.

10.2 Japan Has Not Forced Its Sales on the U.S.
When I go to foreign countries, I hear that Japanese work too much. But why is
working too hard so bad?  Our society cannot continue to eat unless we keep
producing products.  People have to have products in order to live.  They use
golf clubs, and drive automobiles.  If they want these products and do not wish
to import them, they must manufacture them.  I am a businessman.  I am not
forcing my customers to buy things from me.  We expend our energies on how to
make our products most attractive to the customer.

The Americans say that there is a U.S.-Japan trade imbalance, and it is not
because Japan is not buying U.S. products or because Japan is forcibly selling
the products.  There are few things in the U.S. that Japanese want to buy, but
there are a lot of things in Japan that Americans want to buy.  This is at the
root of the trade imbalance. The problem arises in that American politicians
fail to understand this simple fact.  It could never be the case that we are
selling too much; it is not because we are exporting; the imbalance arises as a
result of commercial transactions based on preferences.

Therefore, the only thing that Americans or Europeans can do to correct this
imbalance is reassess themselves and make an effort to produce products which
are attractive to Japanese consumers.  It is in this area where I would like to
see Japanese politicians get courage enough to expound abroad to our trading
partners.

Recently, U.S. Secretary of Commerce Verity brought representatives of 25
companies to Japan who wanted to sell their company's products in Japan.  I was
the person responsible for welcoming this group, and I told them Japan would do
its best to help out.  I remarked, however, that I had been doing my best to
sell Japanese products in the United States over the past 30 years.  Yet, not
once had the Minister of International Trade and Industry accompanied me and
helped out in my efforts.  I asked the Secretary of Commerce if it was his
intention to create an "America Incorporated."  Secretary Verity smiled, but
everyone else laughed out loud.

The Government of Japan has, in both the good sense and the bad sense, passed
along various types of administrative guidance, which have been criticized by
foreign countries as being an alliance between government and business -- even
if the Minister of international Trade and Industry does not go on trade
missions.

One of the Americans in the group then asked me why the Japanese government
backed up Japanese industry.  Let's think about it.  Even though the government
does not own one share of my stock, I pay more than half of my profits to the
government in taxes.  If my business does not do well, the government does not
receive more revenues. Thus, the government, we feel, is a kind of partner.  I
asked them why American industries, which are paying taxes to the government
say, "the government is trying to control industry; don't touch us."  Your
viewing of the government as the enemy seems strange.

During this visit, Secretary Verity did voice his support for cooperation
between government and business to sell products, but it is my feeling that the
establishment of a framework for this type of cooperation is still a long way
off.

10.3 Let Us Think About the Role Japan Should Play in the World
On the other side of the question, however, there are certainly aspects of
Japan which are "unfair" when viewed from the U.S.  perspective.  When you
consider what Japan has done for the world in the course of its becoming the
second largest economy, I think this is an area where Japan is in line for some
critical reflection.

Recently, since the time of Prime Minister Takeshita, Japan has been making
enormous efforts to become the second most open country in the world for
trading.  The long-boiling problems over beef and citrus imports were gradually
resolved through efforts directed at those problems.  However, from the
perspective of Americans, Japan has still not done what it should do.  I am not
saying we should put more money in defense spending, but if we are not to
exceed 1% of GNP on defense, then the government should put more money into
Official Development Assistance (ODA) (foreign aid), which helps the other
countries of the world.

In addressing the ODA to GNP ratio, of the 18 countries in the world who
provide foreign aid, Japan is number 15.  Also, if we look at the amount of
non-loan foreign aid for which there is no remuneration, Japan is number
eighteen of eighteen.  I shrink when I am asked whether that record is
something Japan can be proud of.

Almost all U.S. corporations make donations of about 1 percent of their pre-tax
profits to the community -- using some of their money for the community is a
kind of custom with them.  In Japan too, we also make some contributions to
return money to society, and at the current time many Japanese companies are
returning more than 1 percent.

But when Japan is looked at as a state, it is perceived as unfair by the rest
of the world because it is not returning some of the benefits it reaps from the
world back into the world society.

Therefore, when I speak before Japanese groups, I emphasize what is meant when
America says Japan is acting disgracefully.  I tell them, "Shouldn't we review
what we are doing once again?"  Japan should be bold in telling the U.S. what
it needs to be told, but at the same time, Japan must establish a code of
standards for the role it should be playing in the world.

Japan should open its markets to the extent where there would be no room for
their complaints, and money that Japan has should be provided to help
developing countries where people are not being oppressed. This would be a
magnificent behavior on Japan's part, and I think that Japan needs to become
aware of its responsibilities.

Certainly the full opening of our markets and advancing large sums of money for
developing countries is very painful.  However, things will not get better in
the world until the pain is shared more equitably. How much pain do you think
was involved during the Meiji Restoration where the privileged class of samurai
gave up their power, cut their special hair styles, and tossed out their
swords?  It allowed a bloodless revolution to take place within Japan.

Mr. Ishihara has said there is a need for a reform of consciousness in Japan.
He is exactly on the mark.  If we do not reorient our consciousness from the
perspective of being international people, then I do not feel Japan will be
able to continue to walk the globe as an economic power.

11.0 JAPAN SHOULD LIVE IN HARMONY WITH ASIA (Ishihara)

11.1 Restrain America!
When the time comes when Japan does say "no" decisively on a particular issue,
there may be a dramatic reaction.  It could come as a shock to the Americans,
and a number of different reactions would be possible.  Even now, some
Americans suggest the possible physical occupation of Japan in case Japan
engages in semiconductor trade with the Soviet Union.

Yet when the time comes, we may well dare say "no."  The relationship between
Japan and the U.S., as Mr. Morita describes it, is unbreakable.  However, the
whole world does not exist for the sake of Japan and the U.S.  Japan's
relationship with the rest of the world does not exist only in relation to or
through the U.S.  Should America behave unreasonably toward Japan, Japan must
open channels to deal with the rest of the world from a different standpoint
than on the basis of the U.S.-Japan relationship and it must show that it is
doing this to the Americans.

America itself has already exhibited certain indications that it is shifting
towards a closer relationship with the Soviet Union, as Alvin Toffler stated,
insinuating that Japan will be threatened once the U.S. establishes a more
collaborative relationship with the Soviet Union similar to the case of the
U.S. movement toward China, which burst forth in December 1978, there was also
an astonishing high technology demonstration.

I for one had a chance to observe some of that demonstration.  It began with a
set of satellite photos which Dr. Kissinger brought to China.  At that time
Viet Nam was engaged in a military conflict with China, subsequent to the fall
of the Saigon government in April 1970 and the Cambodian war.  The
Sino-Vietnamese war was recklessly provoked by Deng Shoa Ping, chief of staff
in China.  In the initial encounters, China was severely defeated.  The real
power behind Viet Nam was the Soviet Union.  The Soviets provided Viet Nam with
detailed satellite photos illustrating the movements of the Chinese military,
the number of soldiers and divisions, the number of tanks unloaded at Kuang
Tong station and which direction all these troops took.  Taking advantage of
the superior information available to them, as provided by the Soviet Union,
Viet Nam was able to lure the Chinese troops deep into the mountains, then
destroy them with anti-tank missiles.  This miserable battle was all recorded
by American satellites, which Dr.  Kissinger presented to the Chinese with the
comment "what a silly war you have conducted."

Needless to say, it was a shock to the Chinese leaders to see how step by step
their military was demolished.

I assume that the Americans showed another series of satellite pictures showing
the horrible massacre of Chinese soldiers at the siege of Damansky Island (in
Russian) or Chin Pao Island (in Chinese), which is located in the middle of the
Amur (phonetic rendering) River. At first, only a small number of Russian
soldiers occupied the island and they were soon driven off by the Chinese, who
had many more troops than did the Russians.  The Russians returned in greater
numbers and recaptured the island.  Finally, the Chinese sent the equivalent of
a human wave of troops, almost flooding the island with soldiers.  As the
Chinese shouted victory, the island was surrounded by a sudden mist and
eventually it was covered by a dense fog.  The Russians exploited this
climactic assistance, surrounding the island with tanks and opening a salvo.
At dawn, there were a great many dead Chinese troops.  The Russians landed
their tanks, rolling over the dead, wounded, and living, reducing all to
nothing.

The Americans showed clear pictures of the events, illustrating what had taken
place using satellite pictures, a great demonstration of the combination of
technology and intelligence gathering.  China was shocked and disturbed that it
could not effectively counter a situation like that as they simply did not have
access to the technology required.  They listened to the Americans, and agreed
to the development of a bilateral relationship with the U.S. on American terms.
America had played its high tech card quite effectively.

The normalization of relations with China, by-passing Japan, set a precedent
and provided a basis for other such threats to Japan by the U.S. America can
bluff Japan by indicating that it can develop a similar relationship with the
Soviet Union, without consultation, so that Japan would be less needed within
the framework of U.S. global strategy.  But Japan has a similar card to play,
counter to the American bluff.

Some of Japan's business leaders have long had an interest in Siberian
development, which now appears to be a realistic possibility.  Some of them are
of the opinion that Japan could go neutral, revoking the U.S.-Japan Security
Treaty, if the Soviets will return the northern islands, granted that Japan
would be given the right to develop Siberian resources.

This may be a realistic choice from the Soviet point of view since some
critical technologies such as linear technology are available from Japan.  The
U.S. simply does not have them.  Japan had better start sending some signals of
its own to America.  My American friends comment that my behavior in the U.S.
is too provocative; I feel that more of us should speak out like this more
often.

Japan could have the Soviets formally request Japan's linear technology.  The
COCOM would claim that it is illegal for Japan to provide this technology.
Japan would then mount a public relations campaign, appealing to the rest of
the world that the use of its linear technology is simply to enhance the
efficiency of the Soviet railroad system in Siberia so that travel time is
shortened and the whole thing will be rationalized as an attempt to restrain
American intervention.  In fact, the U.K. and France are champions at this kind
of public relations game, in combination with diplomacy.  We need more skillful
players in the game to counter the formidable American challenges in the
international arena.

11.2 Japan Is Not a Free Ride on the U.S.-Japan Security Pact
It goes without saying that the U.S.-Japan relationship is a vital one. The
security treaty has certainly been helpful to Japan.  America, however, has
chosen to become involved for American interests; it did not want to see the
restoration of Japanese military power.  However, the so-called American
nuclear umbrella as a deterrent power for Japan is not as valuable as the
Americans have said.  I verified this myself twenty years ago and put it into
the official record.  The American nuclear umbrella is just an illusion as far
as the Japanese people are concerned.  Also, the so-called "free ride" on the
U.S.-Japan Security treaty is no such thing and has no earthly basis.  I have
stated this repeatedly.  The Japanese people have been forced to thank the U.S.
for an illusion.  Both the U.S. and the U.S.S.R. had to enter the INF agreement
due to the nature of a changing power shift in the world, which on the bottom
line, is inevitable in light of the high tech- nology dominance by Japan.  This
has been clearly seen by individuals such as Dr. Kissinger, who even foresaw
the situation today long ago, a position he has stated on a number of
occasions.  Poor Japanese politicians have never studied these issues
systematically and therefore can never provide a rebuttal to American
allegations. Americans, for their part, seem to have emotional and intellectual
difficulties in admitting to changes and new developments.

A Pentagon task force sent a warning on electronics, with particular emphasis
on semiconductors, those who have nothing to worry about but Japan [sic].
America is very seriously concerned about losing power of any kind to Japan.
Some Americans have been raising their voices in advocation of an increased
Japanese defense capacity.  This may be a worthwhile suggestion.  We should
overhaul our current defense system, although I am not advocating an abrupt
cutting of ties with the U.S.  We have accepted this absurd defense formal
[formula?]  consisting of three defense forces.  This system must be completely
overhauled to suit present realities, including a much greater deterrent
capacity, exploiting our high technology to the maximum.  We should develop the
most persuasive and demonstrable deterrent formula which would, without any
doubt, show our adversaries that any attack on Japan will end with unbearable
damage to the aggressor from both a strategic and a tactical viewpoint.

Production and maintenance of escort ships which can only exhaust their
missiles and ammunition in a few minutes, and then sit and wait for death is
absurd.  Participation in RIMPAC with such equipment makes no sense.  RIMPAC
has nothing to do with the concept of active defense.

In a lecture that the Defense College of Japan, the commander of the U.S. 7th
Fleet declared it 100% unlikely that Soviet forces could land on Japanese
territory.  This is [an] honest -- but stupid -- comment. Some time ago we
invited a famous Israeli tank division commander named Tam (phonetic rendering)
to Japan.  He kept annoying the Defense Agency by asking why Japan was building
tanks.  He was considered to be one of the top tank strategists in the world,
and he told us that even on Hokkaido there is no need [for] tanks for defense.
He said that Soviet attacks would have to be destroyed at sea.  He also
expressed doubt in the value of escort ships.

His points are absolutely valid.  Tanks and escort ships were built and
maintained at the direction of the Americans.  America has imposed its defense
formula for Japan on Japan, reproducing its own defense formula within Japan.
Thus, Japan has ended up with the defense system it has simply because of
one-sided, pro-American diplomacy: one in which Japan says only "yes."

I conducted my own cost analysis of Japanese defense systems and discovered
that the whole thing would be far less expensive if Japan developed its own
system in accordance with its own initiative and planning, in comparison to the
expenditures forced on us today by the U.S.  Despite the bowing under to
American will by Japan, it is still the target of American politicians such as
McClosky who charge that "Japan is protected by American bloodshed in the
Persian Gulf."

The time has come for Japan to tell the U.S. that we do not need American
protection.  Japan will protect itself with its own power and wisdom.  This
will require a strong commitment and will on our part. We can do it as long as
there is a national consensus to do so.  There may be some political
difficulties at this point in forming this consensus.  From both a financial
and technological point of view, there are no barriers to accomplishing this
goal in the near future. We can develop a more effective and efficient defense
capability at less than we are paying today.

In reality, the abrupt cancellation of the security treaty is not feasible.
But it is a diplomatic option and a powerful card. Outright refusal to consider
such an option means giving up a valuable diplomatic card. The fact remains
that we do not necessarily need the security treaty and a security system which
will meet Japanese [needs] can be built by Japan alone.

Both the right and left on this issue tend to become fanatical on the security
treaty debate.  It is most regrettable that we do not have a cool and rational
forum where the objective profit and loss aspects of the issue can be analyzed.
But the time will come when we will have to face this issue and this time is in
the near future.

The current state of the Liberal Democratic Party means that it cannot afford a
serious deliberation on this issue.  Once the opposition parties disassociate
themselves from a one-sided pro Russian and Chinese policy and demonstrate
their capacity to be able to replace the LDP as alternative political parties
fully recognized by the voters, we will be in the position to examine our
options with greater flexibility.

11.3 Japan Should Live in Harmony With Asia
Japanese popular songs are heard all over Asia these days; it reminds me of the
time when Japanese became so interested in American pop music, which, at the
time, conditioned our psycho-emotional base so that post-war Japan evolved into
a consumer-oriented society. Structurally, there must be similar powers during
such social phenomena and I wonder what it is today.

As a matter of fact, it has always been some technological breakthrough which
has moved history into the next stage, during any given era, even as far back
as the stone age or the copper epoch. Technology has always set the pace of
civilization and cultures flourish on this basis.  When we start seeing only
the pretty flowers that are the result of this flourishing, and forget about
the roots that nourish the blossoms, we soon experience the decline of the
civilization, as has been the case of nations in the past.  This is the way I
interpret history, in cool and orthodox terms.

With respect to the development of commercial uses of the semiconductor,
materialized by Japan in Asia, I must say that we can easily understand the
reason why this happened.  When the French minister of culture, Andre Malroux,
came to Japan, he pointed out the distinction between Western religious
artifacts and those of Japan. He told an audience that the Western expression
of a crucified Christ is bloody and even grotesque and might well discourage a
religious attachment to Christ.  However, he said, the Miroku Buddha at the
Horiyuji Temple emits such a sublime beauty, beyond the barriers of race and
religion, that it is raised to the level of an eternal or ultimate object to be
revered.

What he meant was that the type of beauty and the impression given in such an
artifact as the Miroku Buddha or the Horiyuji Temple attract interest and
respect from all over the world, beyond national, racial, and cultural
boundaries.  These are products of refinement from the Japanese people.  The
original image of Buddha came from India, by way of China and the Korean
peninsula.  The image of Buddha in Japan is the product of refinement of
Japanese art.  The process has been constantly refined and it becomes a product
of Japanese intellectual processes, as the Minister explained, it is clearly
Japanese.

In my judgement, Japan has acquired this ability primarily because of the
particular geographical environment surrounding the Japanese archipelago.  In
the long journey from West to East, Japan is located at a dead end; there is
nothing beyond except the Pacific Ocean. Japan is in no position to pass on to
other nations what it has received; it must live with what it receives for the
rest of history. Everything stops at Japan; the Japanese people refine what has
come their way; Japan is the last stop in cultural transition.

Among Japanese statesmen, Mr. Minoru Genda is one I truly respect.  He once
said that Western swords were basically instruments of killing, although there
are some variations, such as those used in the sport of fencing.  But these
swords are just tools and we cannot be impressed looking at Western swords.
Japanese swords make viewers feel they are looking at artifacts and that they
are being invited in the world of art and mystery.  He went on to say that the
Japanese people have converted these awful tools, made originally to butcher
other people, into art objects.

Another time, Mr Genda told me: "Mr Ishihara -- after all, in the end, Japan
will be all right.  It is able to defend itself."  When I replied, "how," he
said that "Japan's technology can be the basis of Japan's defense." What he
pointed out was that Japanese technology, which has been refined and polished
to the ultimate extent, just like the swords, would provide the basis for
Japan's future existence.

Mr. Genda also affirmed the points I made, suggesting that in certain crucial
technological areas, Japan should move at least five years ahead of other
nations and if possible, further, to at least ten years.  As long as Japan
maintains that ten year advance, it will be in a safe position for the first
twenty-five years of the 21st century.  And this can be accomplished if
politicians use their ace card wisely.

I had an argument with an American correspondent recently.  I asked him to look
at those developing nations which were under American auspices.  The
Philippines and those in Africa, Central and South America are all in hopeless
situations.  Americans once called the Philippines "a showcase for democracy."
I said that Americans are mistaken.

While the Philippines may have felt more comfortable under American
administration than under Spanish colonial rule, and while they still listen to
America, the U.S. never really imparted to them an under- standing of genuine
democracy.  The chairman of the House Subcommittee on Southeast Asia once
suggested to me that the U.S. and Japan should split the cost of financial aid
to the Philippines.  I responded "You're kidding!"  He said that money alone
cannot improve the situation in the Philippines because of the internal
situation.  The U.S. does not even know where its aid money actually ends up.
And most fundamentally, social conflict in a nation cannot be solved with an
outsider's cash.

The most crucial task in the Philippines if to face the cause of social turmoil
there.  The cause is the role of the landowners; Philippine landowners have
accumulated incredible power and wealth, siphoning everything from the ordinary
people.  These landowners will get no sympathy from me.  The Philippines must
act to redistribute the land and wealth in much the same manner as took place
in Japan after the war.  Landowners cannot remain landowners unless the country
is stabilized.  Should a military junta take power, and decide upon a socialist
economic policy, these landowners would be wiped out.

Usurpers must be removed, otherwise there is no way the seeds of democracy can
be planted.  This so-called "showcase of democracy" is empty.  And pouring
additional aid money into the hands of the landowners in the form of
compensation for losing their land is not only a utter waste of funds, but also
ruins any basis for self-help and self-motivation.

There is a chieftain in the Truk Islands, who speaks Japanese, and who said
that since the Japanese left, their children have only learned to be lazy as
the Americans give aid-money and things which spoil human beings.  If you give
people lettuce seeds, they will learn to grow lettuce, but if you give them
money they will simply import lettuce and learn nothing.

America is reluctant to recognize the importance and value of local cultures.
Christian missionaries do not permit the natives to chant their charms and they
prohibit the use of herbs as medicine -- herbs that have traditionally been
used in healing sicknesses, found in certain localities and used according to
local customs.  Local festivals are banned so that traditional songs and dances
are forgotten.  Tradition is dismantled. Americans force other cultures to give
up their traditional value and impose American culture upon them. And they do
not even recognize that this is an atrocity -- a barbaric act!

Natives who once had a traditional festival similar to Japan's ceremony of
tasting the fruits of the first harvest.  (Our ancestors may well have come
from these southern islands, by the way).  The festival was held on the night
of the full moon.  Beating drums and dancing, the people indulged in open sex
as the festival had by its nature this element of fertility.  Christian priests
prohibited these festivals and instructed the natives to bring the fruits of
the harvest to the church altar.  One hour after this was done, the priests ate
the gifts.  The chieftain, still speaking Japanese, complained "we did not grow
this to feed priests."  This kind of misunderstanding goes on and on and
Americans don't even realize it.

Those Asian nations where the economy has been a success story, such as Korea,
Taiwan, and Singapore, were all, at one time or another, under Japanese
administration.  We are aware that some negative things happened under the
Japanese administration, but it cannot be denied that many positive changes
were left behind.

Among the resource-supplying nations, the only Southeast Asian nations which
have developed stable socio-economic systems are those where Japan has
cooperated as a fellow Asian country.  I pointed this out to that correspondent
with whom I had the argument; in return he only kept silent.

In any case, these NICS are turning into NIES who are catching up to Japan,
which make Japan nervous.  However, this is fine with me. Japan should work
more positively, basing its approach on the premise that we must live in
harmony with other Asian nations, developing constructive political strategies
to assist these countries economically and politically.  Entering a new era --
the Pacific Age -- Japan cannot remain prosperous without the rest of Asia. We
need Asia more than we need America.

11.4 Japan Can Be Admitted to the World Community by Saying "No"
Japan is not quite the tiny country most Japanese think it is.  We should not
be presumptuous or arrogant, ending up hated by others, but we should have
pride and dignity as a respected member of the world community.

Our world view appears to be very peculiar, conditioned in part by our
geography and our climate.  In our mind, Japan and the rest of the world do not
exist in a concentric circle.  The rest of the world has its center and the
center of Japan is somewhere outside this.  I feel it is time to overhaul this
concept and enter into the concentric world.

We want to enter that arena not through the kind is individual performance as
given by Mr. Nakasone [sic], but rather by saying "no" decisively.  The
Japanese people will define their position in facing the consequences and
significance of their "no" and will be able to join the world community in the
concentric circle as a true "adult" member.  It is therefore imperative to
normalize our relationship with the U.S., so we can get on with becoming a true
member of the world community

I often suggested a G2 conference with the U.S.  This would help establish
Japan's status and America might welcome the suggestion. When there are only
two parties meeting, Japan will have no choice but to say "yes" or "no" without
resorting to gray areas.  Japan must be equipped with logic and reason whenever
it says "no."  Best of all, by holding a G2, Japan will only have itself and
the U.S. with which to be concerned, making it easier to stick to the "no."  No
other nation will pay attention to Japan if Japan cannot say "no" to the U.S.
A good example is China.

Japan is flattered by many nations these days for no reason than its wealth.
Money is important, but Japan has many more valuable assets, such as tradition,
culture, creativity, as well as powerful high technology; this last item is one
that even the U.S. and U.S.S.R.  cannot afford to ignore.  In order to make the
rest of the world realize that Japan has much more to offer than wealth, we
must develop the logic and reasoning to be able to say "no", explain why, and
stick to it at certain crucial moments.

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