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Overview

As Asian markets and

economies experienced a drastic slide beginning in the summer of 1997,

threatening the stability of other world markets and potentially dampening

the technology boom that had been driving world development, the editors

began a look at the effects of cultures and economic systems on social

and technological change. Following is a Q&A interview with James

Fallows. Beginning in 1999, Fallows was media columnist for The Industry

Standard. He also is the former editor of U.S. News and World Report,

was a senior editor and correspondent in Asia, and Washington editor,

for The Atlantic Monthly and is the author of two books on Asia, Looking

at the Sun and More Like Us. The interview was conducted June 30, 1998.

Entrepreneurship

and Asian Resilience

In the decade since

you wrote More Like Us, we have seen a progressive ? and now, suddenly,

radically different ? Asian economic picture unfold, from riches to declining

markets and default. How do you see the differences between Americans

and Japanese in terms of the way they handle economic damage control and

recovery, and any changes in their self-perceptions? Are the Asians any

more contrite, and are Americans any more detached in their self-assessments?

Fallows: I feel

abashed in offering generalizations about “Asian” attitudes to stresses

of this sort, since so many different cultures have so many different

traits. Traditional Malays describe themselves as being fatalistic about

adversity, while seeing the ethnic Chinese in their midst as more resilient,

for example.But I think between America and Japan, one contrast is fair

to note. On the whole, Japanese culture prides itself on stoicism ? an

ability to withstand real hardship and sacrifice. Thus it takes pride

in its recovery from the horrors of defeat and the indignity of post-war

occupation. American culture, I would say, features instead an optimistic

“things will get better” spirit.

After a bankruptcy,

after a divorce, after being laid off, people are encouraged to think

that the next venture they start will turn out well. In practice, both

of these ethics can equip people to bounce back from difficulties, but

they do so in different ways.

More Like Us comments

on what you call “creative destruction” in regard to both U.S. and China

societies, and gives us reason to believe that the seeds of entrepreneurship

can originate in a racially homogenous totalitarian country (China) or

in a multi-cultural democratic system (U.S.). Is China’s future role to

become the “Superman” of innovation and enterprise, the center of new

entrepreneurship and the spawning ground for new ideas and inventions,

replacing the American tradition in that role? From a 1998 view, will

China perhaps become the most capitalistic of all?

Fallows: First,

about the premise of the question: while China as a whole has a sense

of racial specialness and separateness from the West, I would not think

of it as a racially homogenous country. There are huge differences north

to south, east to west. Nonetheless, it?s clearly true that this culture

does reward many “American” style productive traits, from a practical

problem-solving orientation to a desire for each person to have his own

(or family?s) enterprise. The market tradition seemed not to be extinguished

even during the Mao years. Whether in the long run this is destined to

be the most capitalistic society, I couldn?t say, nor could anyone, I

think, since so many historic, military, and other factors are involved.

But their prospects are good.

Regarding the Japanese

perspective of “common good of the people first” that you mention in both

your books, do you sense any stress fractures in this outlook, especially

among younger Japanese who have come of age in the past 5-7 years and

have to deal with the economic problems caused by their predecessors and

elders? Are they perhaps becoming more independent and entrepreneurial

in spirit as a result?

Fallows: I am

sure that changes in both directions are underway; the question is the

rate of change, compared to how robust the traits are. It is possible

that today?s economic strains really will erode them. On the other hand,

it?s worth remembering that outsiders have consistently overestimated

the rate of change on these fronts. We?ll just have to watch and see.

Why does the entrepreneurial

spirit you describe in Looking at the Sun survive and thrive so strongly

in China, but seems not to have made the narrow leap to Japan?

Fallows: Here

is one guess: China has been so large and populous for so long that an

“every man for himself,” or really “every family for itself” spirit has

been necessary. Japan has thought of itself as small and contained enough

to be run with a more group-conscious spirit. Also, as a number of cultural

historians point out (most recently Sheldon Garon, in Molding Japanese

Minds), there have been concerted efforts by Japanese public officials

for a century or more to promote the collective spirit. This emphasis

may have dampened the entrepreneurial potential of the country.

Can the tradition of

high personal savings rates in most Asian cultures help mitigate the current

financial crisis? Is this a factor, or did it drop by the wayside over

the past decade in countries such as South Korea, Thailand and Indonesia?

Fallows: Yes,

this will make a huge difference ? and does help explain the different

predicaments of different Asian countries. Taiwan, Japan, and Singapore

have VERY high savings rates ? and they are the three in least urgent

distress during the financial crisis. (Japan has tremendous stagnation,

but not Indonesia-style collapse). Indonesia and Malaysia and Thailand

are much less frugal in this sense, and are walking on thinner ice.

Will the Asian economic

recovery likely include more or less government regulation of economic

policies in the respective countries, or are we likely to see yet another

set of economic models that are still quite different from the Western

free market philosophy?

Fallows: My

guess is: A quite significant long-term difference in Asian and Western

models. It is possible that the two approaches really will converge. But

the cultures, histories, and social preferences of many Asian societies

differ enough from America?s to make long-term difference possible, too.


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