Happening Again?

History is replete with examples of countries, beaten in war and/or mired in economic stagnation, ultimately seeking resurrection through radical nationalism. Germany after World War I is perhaps the most obvious example from recent history. The Treaty of Versailles in 1919, ending that war, leveled stringent treaty obligations upon the defeated Germany. Not only were massive, and completely unaffordable, reparation payments imposed, but, under Article 231 of the Treaty, Germany was forced to accept the entire responsibility for initiating the conflict - the so-called "guilt clause". Germans were humiliated; the economy entered a period of hyper inflation, then depression; and the rest of the tragic story, with the rise of Nazism, is only too well-known.

Japan, with quite different timing and circumstances, is - startlingly - exhibiting early signs of a similar kind of extreme nationalism.  First, a bit more history: with its defeat in World War II, Japan was occupied by the United States (1945-52) under General MacArthur, who, rather than simply imposing reparations, initiated a sweeping range of military, economic, political and social reforms. Punishment was exacted through the convening of war-crimes trials in Tokyo. A new constitution was implemented, committing Japan to pacifism. But the Americans regarded the economic rehabilitation of Japan as crucial, especially as a counter to the emerging threat of communism in China, and this focus helped set the stage for what would become the Japanese economic "miracle" over the subsequent four decades. Fast forward to the 1980's and Japan was the second largest economy in the world, and as an economic force seemed unstoppable.

But the story has changed completely since then. With the bursting of a massive property bubble in 1991, Japan has been stuck in an economic bog, unable to spark  growth on anything approaching a sustainable basis - even with repeated rounds of fiscal (and monetary) stimuli so large and frequent that the outstanding national debt is now equivalent to over 200% of GDP. In the context of its third recession in only the past five years, Japanese voters have just re-elected Shinzo Abe as their next Prime Minister (he was last Prime Minister in 2006-07), and his Liberal Democratic Party won two-thirds of the seats in the lower house of the parliament. Mr. Abe's new Cabinet, introduced late last month, is, if nothing else, a study in something approaching extreme nationalism. As one example, the new Education Minister has announced his intention to re-align the teaching of history in schools in a way that would gloss over Japan's militarist era, and he wants to annul both the 1995 "Murayama statement", which formally extended an apology to Asia for Japan's war-time atrocities, and even the verdicts of the Tokyo war-crimes trials of 1946-48. The Minister is strongly supported by nearly all his new Cabinet colleagues. For his part, Mr Abe has already managed to alarm both the Chinese and South Koreans, escalating the territorial disputes over the Senkakus and Takeshima islands, and promising to strengthen relations with America as his "first step in turning Japan's foreign and security policy around".

Immediately after his re-election in November, President Obama visited three Asian countries - Cambodia, Myanmar, and Thailand. The trip was a clear demonstration of a new focus on Asia in his second term. Such a focus now appears prescient in light of, among other things, these disturbing political developments in Japan.