Published in Japan Forward  9/9/2022

It’s still hard to process the horrific assassination of Japan’s most consequential politician of the last sixty years.

Shinzo Abe is literally irreplaceable. At the age of 68, relatively young for a seasoned politician, he would have been expected to cast a giant shadow on Japanese politics for at least another ten years. The killer has done immense damage to Japan as there is no other politician with equivalent experience, credibility and vision.

Supposedly, the alleged perpetrator held a grudge against the Unification Church, his “Moonie” mother having donated all her wealth to the cult and then gone bankrupt. Abe, like several other politicians in Japan and America, maintained cordial relations with the UC (Unification Church) and its associated concerns.

Whether there was anything really substantial to the relationship in the twentieth first century is uncertain, but it was enough for Abe to be targeted by a cowardly murderer.

Abe’s project was to make Japan a “normal country”. Several other politicians have come up with more grandiose plans – one thinks of Ichiro Ozawa’s Blueprint for a New Japan, published in 1993 – but none chalked up any achievements worthy of the name.

Abe with President Obama at Jiro’s sushi restaurant

Abe hit the ground running when he won an electoral landslide at the end of 2012 and initiated far-reaching change in institutions, economic policy, geopolitical settings and, not least, the relationship of political leaders to Japan’s powerful bureaucracy.

Thankfully, his initiatives are unlikely to be reversed. Japan will not go back to the state of paralysis which reigned in 2010-12, when the Nikkei Index sat below 10,000, corporate Japan was largely unprofitable and the number of suicides was 50% higher than now.

By the bitterest of historical ironies, one such transformative reform relates indirectly to the circumstances of Abe’s death. During the Cold War, part of Japan’s “abnormality” was that, being nominally a pacifist nation that had outsourced its own security to the United States, it had no need of a functioning secret service.

Even after the Cold War was over, the political and economic fragility of the “lost decades” prevented any progress being made. Rightly, Abe made reform a priority of his premiership, even at the cost of declining approval ratings and noisy demonstrations around the Diet.

Abe showed political courage in facing down the taunts of angry pacifists

In his fascinating book Special Duty: A History of the Japanese Intelligence Community Professor Richard Samuels of the Massachusetts Institute of Technology puts it like this –

“For decades after the war, Japan had no centralized intelligence capacity… It was not until Prime Minister Abe’s reengineering project – including creation of a centralized NSC (National Security Council) in 2013 and its intelligence co-ordinating unit, the National Security Secretariat – that the government acted on its oft-stated determination to upgrade Japan’s intelligence capacity”

Samuels recounts how then-Prime Minister Yasuhiro Nakasone tried to do something similar in the early 1980s but failed to gather enough support. It is highly likely that the United States would have disapproved of Japan, which was essentially an American dependency at that time, developing an independent capability.

“Ron and Yasu” at Camp David in 1986

If no professionals are available, gifted or not so gifted amateurs take the stage. What might be broadly termed intelligence work was carried out by a variety of actors, including trading house personnel, think tankers, journalists and less respectable characters from the dark side of Japanese society, such as the kuromaku, the black curtain men.

These behind the scenes power-brokers and fixers take their name from the unseen manipulators of the kabuki theatre. American intelligence appears to have condoned or at least tolerated their activities. Indeed, some of the key actors had been freed from detention in the Occupation period because of their influence and ability to get things done.

It is notable that several major players had strong connections to Korea. In his book Yakuza to Kisen ga Tsukutta Daikankoku (“How Yakuza and Courtesans Created Korea”) former public security official Mitsuhiro Suganuma credits famed fixer Yoshio Kodama for facilitating the Korea-Japan Treaty of 1965 that established diplomatic relations.

Suganuma goes on to claim that the relationship between the two countries has deteriorated today because there are no longer any kuromaku on either side to cut the necessary deals.

Such was Japan’s destiny. It could never have been a non-aligned or neutral actor, despite the sympathies of its left-wing intelligentsia. It was fated to be a passive, but crucial participant on the American side of a Cold War in which there were no rules.

Another unofficial participant in the Cold War was the Reverend Moon’s Unification Church. Media accounts tend to concentrate on its mass weddings and ruthless money-making practices. In reality, it has always been a highly political organization as well, being a willing instrument of the KCIA (Korean Central Intelligence Agency), which itself was linked to the American CIA.

Moon with Mikhail and Raisa Gorbachev

The KCIA and the UC were as ‘close as lips and teeth’, as the saying goes, with several “former” KCIA and military personnel occupying important positions in Moon’s organization. Writing in 1991, UC expert Dr. Jeffrey Bale described how in the 1960s, when President Park Chung-hee’s regime regarded many churches with suspicion, Moon was given tax-free charitable status and his first business venture was awarded contracts to produce parts for anti-aircraft guns, grenade launchers and other military hardware at favourable prices.

Clear confirmation of the relationship came later with the U.S. Congressional investigation into the “Koreagate” influence-peddling scandal which snared ten Democratic congressmen in 1977. The Fraser Report on the issue stated that there was ‘a great deal of independent corroboration for the suggestion in [U.S.] intelligence reports that Kim Jong-Pil  (founder of the KCIA) and the Moon organization carried on a mutually supportive relationship, as well as for the statement that Kim used the UC for political purposes… [Moon is] the key figure in an international network of [front] organizations engaged in economic and political as well as religious activities.’

From the point of view of the KCIA, Moon’s fervent anticommunism – inherent to his bizarre eschatological ideas –  made the cult a perfect fit and a convenient front for political organizations and activities.

It was for the same reason that in the late 1960s Shinzo Abe’s grandfather, former prime minister Nobusuke Kishi, supported the growth of the UC’s Japan branch from a tiny sect to a powerful operation, seeing it as a fitting counterbalance to Japan’s increasingly militant left of the time.

In a sense, this was quite perceptive as political and religious cultists have much in common. Several observers of the UC have noted the parallels with techniques utilized by authoritarian Marxist-Leninist parties, to the extent that the Moon’s followers have been called “heavenly communists.”

After discussions with politicians and kuromaku, Moon established the International Front for Victory over Communism in both South Korea and Japan, where it was known as the Kokusai Shokyo Rengo and attracted many tens of thousands of conservatives worried about their country’s loss of agency in a dangerous region of a dangerous world.

At the jam-packed inaugural event at the Budokan, a congratulatory bouquet was sent by Prime Minister Eisaku Sato, recipient of the Nobel Peace Prize and brother of Nobusuke Kishi.

Gathering at the Budokan in 1970

Indeed, there was much to trouble the Japanese right, from the violent escapades of home-grown revolutionaries to America’s defeat in Vietnam and opening to communist China. What could be done about it? Officially, nothing.

Samuels writes as follows – “The Asia-Pacific War not only destroyed much of Japan physically but also cast a shroud on the legitimacy of its national security enterprise… Repeated leaks to Soviet, Chinese and North Korean agents went largely unpunished and led the United States to withhold information from its Japanese ally.”

After the Abe reforms, that is no longer the case.

The past, as they say, is a different country. Today the Cold War is material for history books. Although the UC and its media outlets remain influential on the right of the political spectrum, Moon himself junked his anticommunism before he died in 2012, setting up businesses in North Korea, where he was born, and receiving a posthumous honour from Kim Jong-Un.

Moon with North Korean leader Kim Il-Sun in 1991

Whether UC still works hand in glove with South Korean intelligence is unknown – but given the cult’s North Korean connection, it would come as no surprise. Indeed, the existence of this “unofficial” direct channel to the Pyongyang regime could well have been the key reason why important Japanese politicians maintained cordial relations with UC into the new century.

Over time, the Unification Church has become a Frankenstein’s monster, attracting adherents from the ever-increasing number of lonely, disconnected people yearning to be told what to do with their lives.

Moon’s theology is far from sympathetic to Japan, which is considered the “Eve” country that copulated with Lucifer. As a result, it must make financial restitution to the pure, upstanding “Adam” country of Korea, a process that UC facilitates by guilt-tripping wealthy Japanese members and sending the proceeds to home-base in Seoul.

China has brutally suppressed the Falun Gong which it considers a threat to Communist Party control, validating Kishi’s intuition that cults and communism are natural rivals. Even some Western countries, such as Germany, have taken a tough anti-cult stance, but such measures are hard to reconcile with constitutional protections of freedom of worship. Likewise, people have the right to donate as much of their money as they want to whoever they want.

Toleration of cults, as long as their actions are legal, is part of the price of living in a society that values personal responsibility. And cults that survive long enough are no longer called cults but religions.

Abe with Indian Prime Minister Narendra Modi in 2015

Meanwhile, Japan’s journey to “normality” – which includes agency in foreign policy, pride in cultural heritage and possession of similar intelligence resources to other large democracies –  continues. Shinzo Abe was killed when he had so much more to contribute, but it is to be hoped that his legacy will be honoured and extended.

Published in Nikkei Asia 13/ 7/2022

The first thing I see on disembarking from the ferry is a giant polka-dotted pumpkin sitting on the dockside.

“That’s an iconic artwork,” says my companion, browsing the guidebook. “People come from all over the world to see it.”

“It looks more like a piece of scenery from Sesame Street.”

“At least it makes you think. That’s the whole idea.”

“Where’s Cookie Monster?” Yayoi Kusama’s red pumpkin (photo: NW)

All it makes me think is that contemporary art is full of hype and blather. Yet, I’m willing to accept that the fault lies with me. I’ve come all the way to Naoshima, Japan’s art-island, to have my prejudices confirmed or disproved by concentrated exposure to the subject.

Naoshima is the brainchild of the late Tetsuhiko Fukutake, founder of Benesse Holdings, an education and publishing company.  A man ahead of his time, Fukutake came up with the word “benesse” to signify the well-being that he wanted to promote through his business and cultural activities.

Set in the Inland Sea, the island is a twenty minute boat journey from the mainland of Okayama Prefecture. The northern part is dominated by a copper-smelter operated by Mitsubishi Materials. Turning the southern part into an art site was an extraordinarily ambitious, multi-decade project.

Once a dentist’s clinic…

A bus takes us up the winding road to the isolated, super-luxury Benesse House Hotel which contains the Benesse House Museum. On its walls, I spy a Hockney and a Warhol which are pleasant, but unmemorable. More puzzling is a series of almost identical black-and-white photos of shorelines by Hiroshi Sugimoto.

Hiroshi Sugimoto’s shoreline photos (photo by NW)

“He’s interrogating the meaning of the sea,” says my companion, reading from the explanation on the wall.

“The guy went to beaches all over the world to take these photos, and they all look the same?”

“The sea is the sea.”

Unable to argue with that, I move on to the next artwork, which is “Three Chattering Men” by Jonathon Borofsky*. It consists of three tall metallic figures with jaws that go up and down while they utter the words “chatter, chatter, chatter.” From time to time, they burst into brief snatches of song.

“How annoying is that! It must drive the people who work here around the bend. No, don’t tell me. It’s supposed to be annoying, right?”

A smug nod from my companion. The next chamber is where my resistance starts to crumble.  The piece, by Bruce Nauman, is a tower of neon signs that flash out an apparently random sequence of three word messages, all ending with “and live” or “and die”.

LAUGH AND DIE / SCREAM AND LIVE / EAT AND DIE / FAIL AND LIVE / PAY AND DIE

I sit in front of the display for some fifteen minutes, semi-mesmerized. The effect is like a high-speed fortune-telling device. Except these are not potential futures, but certainties. All will happen to everybody, one way or the other.

We walk along the beach towards the Lee Ufan Museum which, we are assured, is a kilometre further along the coast. Except that after walking back and forth for a considerable time we see nothing resembling a museum. What we do see is a large field with a couple of huge boulders in it.

“Are those works of art?” I muse. “Or are they just random rocks?”

“They could be both,” says my companion, unconvincingly. “Maybe it’s an open-air museum.”

We approach the rocks and study them carefully, but end up none the wiser. We are on the point of giving up when a group of art-lovers emerges from the side of a large green hillock. The hillock, it turns out, is a vegetation-covered bank behind and below which hides the bunker-like Lee Ufan Museum.

Like many of the art-related buildings on Naoshima, it was designed by the brutalist architect Tadao Ando, who was part of the art island project right from the start. Lee Ufan’s stone and steel objects do nothing for me, but the museum itself is a remarkable structure, using natural light to illuminate the exhibits.

A ten minute walk away is the Chichu Museum. Again, Ando’s building is largely underground, yet quite literally casts new light on the artworks. I found Walter de Maria’s cathedral-like installation pompous and unpleasant, but the setting of five of Monet’s waterlily paintings is the highlight of the whole Naoshima experience. There is no question that ex-boxer Ando’s creativity has significantly heightened the impact of Monet’s genius.

Inside Tadao Ando’s self-designed museum on Naoshima (photo: NW)

Next morning we take a ferry to Teshima, a larger island which suffered for decades from illegal dumping of industrial waste. Teshima Art Museum, twenty minutes from the port by electric bike, houses a single artwork –  “Matrix” by artist Rei Naito and architect Ryue Nishizawa, winner of the Pritzker prize in 2010.

Or perhaps it would be more accurate to say that the artwork is the museum itself, including its backdrop of terraced paddies – restored for the project – drowsing in the sunshine.

We take a looping path past the flying saucer-like café and through a grove ringing with birdsong. Then it’s shoes off to enter a giant egg-shaped structure with two large oval apertures open to the elements. Inside, there are no pillars or walls, just curved surfaces.

The view from inside the Teshima Museum

It takes a while to figure out what’s going on. Dribbles of water emerge from holes in the ground, scoot across the super-smooth floor, make strange shapes, merge with other dribbles to form streams and pools. It’s a slow, engrossing process

“I get it,” I whisper to my companion. “This is the primeval soup from which all life emerges.”

“Maybe so, but watch where you’re putting those big feet!”

“Damn!” It’s too late. Before I know it, I’m hopping around in a mini-lake and my socks are sodden.

“Looks like you just delayed life on earth by fifty trillion years,” my companion smirks.

What can I say but “sorry”.

We whizz down the mountain to the Yokoo House, a venerable residence of stone and charred cypress blocks that has been repurposed as a gallery.  On display is the distinctive iconography of Pop Artist Tadanori Yokoo, featuring the seven gods of good luck, Yukio Mishima, pyramids, erotic woodblock prints, and pastiches of movie scenes and famous paintings.

There is also a mysterious circular tower to explore, and a bright red rock garden containing a golden stork and real carp swimming in a psychedelic pond. The effect is like wandering through one of Yokoo’s dreams.

Tadanori Yokoo’s psychedelic garden (photo: NW)

The pamphlet praises the two toilets that Yokoo has designed for the house. Having been too busy examining artworks to attend to the usual necessities, I decide to pay a visit to a Yokoo toilet and kill two birds with one stone.

The interior is indeed glorious with lavish fittings and a throne-like seat, but no matter how hard I try, I can’t get the flush to work. Much to my mortification, I’m forced to leave behind a sizeable memento of my visit.

“You took a long time,” said my companion.

“I was interrogating the distinction between art and function.”

“At least it made you think.”

Probably the next visitor too, I reckon.

There was much else to intrigue and delight on the art island tour. To name a few favourites, there was the Tadao Ando museum, the Art House experiments in Naoshima’s Honmura district and Hiroshi Senju’s waterfall paintings at Ishibashi.

At the ferry terminal (photo: NW)

Have I been converted to the cause of contemporary art? Not entirely. I’m never going to be reconciled to that polka-dotted pumpkin, and there were other works that struck me as empty and pretentious. But I plan to be back some time for a second helping. The setting is so magical that even getting annoyed is enjoyable

Weeks later, I still hear the chattering men* going “chatter, chatter” in elevators and cafés. Sometimes I close my eyes and see neon signs flashing.

TOUCH AND LIVE / EAT AND DIE / PLAY AND LIVE / RAGE AND DIE / KISS AND LIVE

*it seems that the “Three Chattering Men” exhibit has been removed since my visit.

Published in Japan Forward 21/01/ 2022

It was thanks to Covid that I recently managed to view the Yayoi Kusama exhibition at the Tate Modern in London.

The event, which opened in the summer of 2021, had been fully booked until the closing date in March 2022.  With the Omicron variant ripping through the British population, persistent telephoning was finally rewarded. There had been a cancellation and a mid-afternoon slot was available.

A lucky break!

I’m neither knowledgeable about contemporary art nor particularly enthusiastic. What fascinates me is the Kusama phenomenon itself. How did a ninety two year old woman who has been a virtual recluse in a Tokyo mental hospital since 1975 become “the world’s most popular artist”.

That accolade was bestowed on her by The Art Newspaper in 2014 – and rightly so. Her Infinite Obsession retrospective in South and Central America attracted an exhibition attendance of over two million people.

If anything, her stock has risen even higher since. In 2016, Time Magazine chose her as one of the 100 most influential people in the world, alongside Barack Obama, Usain Bolt and Caitlin Jenner.

On a freezing cold day in November 2017, five thousand New Yorkers lined up for several hours to enter two of her “Infinity Rooms” (mirrored spaces illuminated with various light sources). The time given each person to experience each box was thirty seconds. Likewise, the wait time was several hours for All the Eternal Love I Have For The Pumpkins, her 2016 exhibition in London.

At the Tate this January, probably thanks to Covid again, reservations have taken the place of queuing around the block. That is not to say I didn’t have to wait in line. About three quarters of my allotted one hour was spent waiting to be admitted to the glittery darkness of the Infinity Rooms, which are just about large enough to accommodate four people at a time.

Londoners did get a better deal than New Yorkers, though. We were allowed a full two minutes inside the rooms, which were titled Chandelier of Grief and Infinity Mirrored Room – Filled with the Brilliance of Life.

According to the Tate, these were “exemplary of Kusama’s practice as a persistent enquiry into the phenomenological potential of art.”

To my inexpert eye, the Infinity Mirrored Room looked more like a 1970s disco, while the other room was similar to a “hall of mirrors” attraction at a funfair. Indeed, some of my fellow viewers had  brought their young children who seemed to be having a great time. Literally everyone was taking selfies, including the kids.

Where’s John Travolta?

In some exhibitions, snapping pictures is not allowed. Here it was encouraged. In fact, you could say it was the main point. Thinking deep metaphysical thoughts was out of the question, despite the cosmic message from Kusama inscribed on a gallery wall.

Our earth is only one polka dot among a million stars …when we obliterate nature and our bodies with polka dots, we become part of the unity of our environment.

I wasn’t the only one to be underwhelmed by the experience. Adrian Searle, art critic of The Guardian, wrote that the installation reminded him of his “cheapo garden fairy lights”.  Another critic from The Guardian, Jonathan Jones, described her work in harsher terms: “as fun as a fizzy drink and about as nourishing”.

And yet Kusama was a formidable presence in her New York heyday of the late fifties and sixties. That much was apparent from the photos and film footage also on display in the exhibition.

In those days, her main theme was sexuality. Multiple male organs constructed from clay or cloth adorned the various installations and objets she created.

Kusama smiling

Like Yoko Ono, who appeared in New York avant garde circles at roughly the same time, she was a natural-born provocateur with an endless supply of chutzpah. She staged orgies and a gay wedding in her studio, stripped naked in anti-war demonstrations and painted the bodies of her friends with polka dots.

In an open letter to President Richard Nixon, she promised to “lovingly, soothingly adorn your hard masculine body” if he would only agree to “make this world a new Garden of Eden”.

Some of the conventional works were impressive too, particularly the large scale “Infinity Net” series of abstract paintings which she started in 1959.

Kusama the transgressional outsider was a lot more interesting than Kusama the global brand. Her outrageous “happenings” were more entertaining than her pretentiously titled Infinity Rooms; her phallus-encrusted boat from 1963 more memorable than the enormous polka-dotted pumpkins that have rolled off her production line in recent years.

Phallus boat “aggregation”

At some stage, the art of the deal took over from the art of the heart.

Perhaps that was inevitable. Like Andy Warhol, Kusama never saw artworks as holy creations separate from ordinary reality. At the Venice Biennale in 1966, she exhibited an installation of mirror balls without being invited and then sold them off for two dollars a pop. “Why can’t I sell art like hotdogs or ice cream,” she declared. Now she sells packs of two souvenir mugs for £52 at the Tate and signs up to a collaboration with Louis Vuitton.

In the early years of this century, Kusama’s work was handled overseas by the Gagosian Gallery whose proprietor, Larry Gagosian, was described by Forbes magazine as “the P.T. Barnum of the art world.”  In 2013, she switched to the rival mega-gallery of David Zwirner. Between them, they have powered Kusama to extraordinary commercial success. In 2009, her works grossed $ 9.3 million at auction. In 2019, they grossed $98 million.

No amount of  “eternal love” could save this pumpkin from a 2021 typhoon

It is no coincidence that 2009 also marked the start of the era of unconventional monetary policy, by which central banks drove down interest rates to unprecedentedly low and even negative levels. Elevating asset prices was an explicit policy goal, successfully achieved as prime real estate, tech stocks, crypto currencies and collectables such as art took off for the stratosphere.

Put together the additional wealth that has accrued to the super-rich and the selfie-friendly appeal of Kusama’s recent productions and you have the background to her rise to superstar status. But you need something else too, an ability to satisfy a widespread yearning as transmitted by the herd mind of the internet.

Adrian Searle of The Guardian explains it like this – “Many people are hungry, I suppose, for some kind of transformative, mystical or even transcendental experience, and one that requires neither fasting nor drugs, let alone months or years of mental and physical preparation.”

In other words, it is secular religion. All you need to join the congregation is a cell phone and the willingness to stand in line for a few hours. The Deity of course never appears in person, as is usually the case with deities.

Kusama remains extremely prolific. “I want to paint 1,000 and 2,000 paintings,” she says. “I want to keep painting even after I die.” That is quite possible since her team of Japanese fabricators can create new product from her ideas and her dealers will certainly be happy to sell it.

Polka dotted tentacles…

On the day of my visit, the other galleries in the Tate were as silent as a morgue. On the way out, I asked one of the staff why Kusama was so uniquely popular. He answered with a laconic shrug and a single word. “Instagram.”

Meanwhile, the Infinity Mirror Rooms exhibition at the Tate Modern has been extended until June 12th 2022. For hardcore fans, there is an evening viewing that includes a £75 dinner.

Pumpkin pie is not on the menu.

Published in Japan Forward 1/1/2022

Making predictions is a mug’s game. Who in 2019 would have forecast the state of the world as it is today?   Rather than try to guess what is most likely to happen next, we might benefit more from imagining possible futures that would have a significant impact on the world.

Here are five that that might be lying in wait for us, ready to pounce with a blood-curdling roar. They cover energy, finance, the pandemic, economics and geopolitics. Some are quite plausible. One is highly unlikely, but has the potential to turn our world upside down.

Tail risks should never be dismissed, especially when the tail concerned belongs to a tiger.

Tokyo Stock Market Bargain Sale:  Tesla Eats Honda, Apple Eats Sony

Back in the late 1980s, the Japanese stock market accounted for half of global market capitalization, while Japan’s share of global GDP was a mere 13%. Japanese companies went on a massive shopping spree which included the purchase of the Rockefeller Centre by Mitsubishi Real Estate and Columbia Pictures by Sony, the latter being the subject of a notorious cover picture on Newsweek magazine.

Now the positions are reversed. The US stock market accounts for 56% of world stock market capitalization, but only 21% of world GDP. So far mega takeovers of non-US companies have been few and far between, but there is little doubt that the Godzilla-scale market capitalization of the major US tech companies gives them every opportunity.

No doubt, the Japanese government would be disturbed by the prospect of one of its most prestigious companies being gobbled up by an America giant. However, given the geopolitical realities, which are that Japan needs the U.S. much more than the U.S. needs Japan, it would be hard to refuse.

What could Japan do before Godzilla stomps into in Tokyo Bay? There is one obvious solution – to take companies off the stock market altogether. In fact, this is likely to become an increasingly popular manoeuvre in many countries as managements seek to avoid the ever more stringent demands of ESG (Ethical, Social, Governance) oriented-investors.

If Japanese blue chip companies are bargains in the eyes of foreign managements, why don’t Japanese managements and financiers buy them up first?

Taiwan Emergency: Xi Gambles Big

Geopolitical risk has risen sharply with the rise of a much more assertive and technologically advanced China in the last decade. So far the leadership’s strategy has been to use deception and incremental moves to achieve its goals, as in the brilliantly executed appropriation of the South China Sea and the crackdown on Hong Kong. But in the case of Taiwan, a more drastic and confrontational approach would be necessary.

There are two reasons why the leadership might opt to move sooner rather than later. First, the United States is currently a bitterly divided nation and President Biden is preoccupied by domestic issues. Yet by the middle of the decade there could well be an anti-China alliance and trade bloc stretching from India to Japan, with the Japanese and Taiwanese economies increasingly integrated in the high-tech area.

The second reason is that the Chinese economy’s best days could well be behind it. There might even be Japan-style “lost decade” as real estate prices slump, the finances of regional governments crumble and the working population starts to shrink. History tells that authoritarian governments have sought to overcome economic doldrums by whipping up nationalist sentiments and engaging in aggression.

An invasion of Taiwan would be the largest seaborne operation since D-day. There would be many casualties, but China would certainly prevail without Western military intervention. No doubt, there would be boycotts, sanctions, condemnations in the United Nations, and probably a deep worldwide recession as supply chains collapsed.

The shock value would be equivalent to 9/11, indeed greater in its overall impact on the global balance of power. China would have succeeded in ousting the United States as a dominant actor in East Asia, just as the United States ended Japan’s supremacy by force of arms 75 years ago.

So the key question is what would the West do in the case of a move on Taiwan. Or, rather, what does the Chinese leadership believe the West would do.

The End of Japanification:  Double Digit Inflation

Japanification, shorthand for “becoming more like Japan”, is a concept that originated in the world of finance and economics. After Japan’s asset bubble burst in the early 1990s, economic growth slowed dramatically, deflation set in and interest rates slumped to levels far below what was considered normal elsewhere.

Domestic and foreign media latched onto social problems seemingly related to economic stagnation– young hikikomori recluses, parasite singles who stayed in the parental nest into their late twenties, a fertility rate far below what was needed for replacement. The nadir of such commentary was a 2013 BBC documentary, “No Sex, Please, We’re Japanese”, which claimed that the low birth rate was caused by lack of libido.

As time passed, it became clear that super low interest rates, weak growth and the related social pathologies were far from being exclusively Japanese. The same phenomena could be seen across the developed world.  As of 2019, many believed that worldwide “Japanification” was inevitable; that deflation was our destiny, thanks to structural forces such as demographics, the price transparency of internet shopping and the weak bargaining power of organized labour.

Then along came Covid and the conventional wisdom was turned upside down as inflation suddenly took off, reaching levels not seen since the 1970s in some countries. US consumer price inflation reached 6.8% in November 2021, with the UK equivalent at 5.1% and even inflation-phobic Germany at 5.2%.

Even in disinflationary Japan, there have been price hikes for theme park tickets, “gyudon” beef bowls, mayonnaise and materials like cement and steel. According to the Bank of Japan’s Tankan survey, the number of companies expecting to hike prices is at its highest level in 30 years.

A transient phenomenon, as Chairman of the Federal Reserve Jay Powell stated, or the shape of things to come? We don’t have a gold standard these days. We have a political standard. If inflation is perceived as a huge problem by the public, governments will tackle it. If other problems are perceived as much more serious – such as inequality, social fracture and climate change – they will leave inflation on the backburner.

And in the case of any future economic crisis – whether caused by an epidemic or a natural or manmade disaster – cash transfers of money created by the central bank to individuals and companies will be expected. The Covid era precedent cannot be undone.

If an inflation cycle is starting, it will last for years and only when the pain is widely felt will policymakers seek to crush it. In some countries, double digit price rises will have been registered by then.

For Japan, the good news would be that the Bank of Japan might finally hit its 2% inflation target!

Energy Crunch: Triple Digit Oil Price

The COP-26 climate conference in November was, predictably, a failure. The Paramount Leader of China, the world’s largest polluter, did not show up at all, being busy at home greenlighting record levels of coal production to cope with freezing conditions in northern areas. Prime Minister Narendra Modi of India, the world’s third largest polluter, did attend and made sure that in the final agreement the words “phasing out” of coal were changed to “phasing down”.

How could it be otherwise? As we reach the point when actions are expected, not just fine sentiments, the more likely that poorer countries in particular will back away from the rich country consensus. Even in the richer countries, some governments may get the jitters as the true cost of the green energy transition becomes increasingly clear to their electorates.

In his book “The New Map”, energy expert Daniel Yergin concludes that “oil will maintain its pre-eminent position as a global commodity, still the primary fuel that makes the world around.”  That is now a minority view, but what if he is right? America shale companies are producing much less than before due to bankruptcies and ESG restrictions on capital availability. For the Western oil majors, years of ESG-driven underinvestment in global capacity makes supply less responsive to price signals.

These are the factors that have driven the oil price up from the absurd “inverse bubble” of minus $37 dollars for a barrel in April 2020 to its current level. But what would happen in the eventuality of a full opening of the world economy, with planes packed with tourists criss-crossing the world and offices and factories buzzing with activity?

We could be heading for the outrageous “Peak Oil” price levels of 2008 in no time at all.

In Praise of Reality: The Tiger Roars in ‘22

We are living in an era of unprecedented change, or so we are told. Personally, I have my doubts. Trains represented dizzying change; for the first time in human history, people were able to travel faster than on the back of a horse. Planes were change. Travelling to the moon was change.

Electric cars, by contrast, have been around for half a century. The Facebook business model of free product in exchange for advertisements is not that different from how commercial TV works. Zoom calls are just a cheaper version of videoconferencing.

Hyping up present day phenomena in comparison to the past is so common that we hardly notice. Such is the case with Covid-19 too.

With the dominant variants declining in virulence, it is possible that 2022 is the year in which we finally learn to live with the disease and restrictions can be lifted. If so, to what extent will our world have changed permanently and to what extent will the “old normal” reassert itself?

Working from home is more convenient and saves commuting costs, but misses out the industry gossip, mentorship and camaraderie that binds an organization together. Remote learning takes away the tension and focus of being stuck in a classroom with your peers and a bad-tempered teacher. Remote conferences lack the one thing that makes conferences worthwhile: networking over drinks in the hotel bar. Remote tourism leaves out the crazed taxi-drivers, smell of the streets and failed attempts to speak the language that make the experience so memorable.

The Covid era has made all of us part-time versions of Japan’s “hikikomori” social recluses. No doubt, some people will have got used to a virtual existence and may choose to move into Mark Zuckerberg’s “metaverse” permanently. Others will want to make up for lost time and party louder and longer than ever before, newly conscious of the unprogrammable pleasure of interacting with real people in the way it has always been done.

That seems to be what happened 100 years ago when the Spanish Flu, a far worse plague on humanity than Covid finally fizzled out. Next up was the Roaring Twenties, a byword for hedonism, technological innovation, free-spirited women and artistic experimentation.

There’s no reason why it shouldn’t happen again. Let’s hope the Year of the Tiger can echo some of that that Jazz Age roar.