Sunday, February 5, 2012

Get Your Gaman On

The other day, I quoted Howard Davies explaining the big macroeconomic advantage of a country like Latvia over a country like Greece:
Latvia could make austerity work because they'd been in the USSR for 50 years, they were used to unpleasant and dramatic things happening. The population would accept incredible privation. 
As a sort of followup, here's a letter from one Mr. Zachary Pessin, in yesterday's FT:
I have often thought that acclimatisation to a depressed economic environment is a state of mind that the Japanese have adjusted to... I first went to Japan in 1995 to live for a semester, then lived there full-time from 1999 to 2002. I have been every year since, save the last two. So, for 15 years I have seen how a generation of Japanese lost pride in their country, lost hope of an inspiring life and came to terms with the drudgery.
"Yikes," you're probably thinking, "Lost pride, lost hope and drudgery? That sounds awful -- we'd better figure out fast how to avoid it." Well, if that is what you're thinking, then you'd better think again. Losing hope is the whole point. The Japanese, Pessin says, are
a decade ahead of us in dealing with the world we now live in. ... Perhaps you know the Japanese term gaman, which is effectively translated as “to persevere valiantly through pain or difficulty; stoic determination”. This too will be another import from Japan, because they have been living in the House of Gaman for almost 20 years now, and we Americans are just arriving. And make no mistake, the deleveraging that must continue across the US economy for at least another five to eight years at best will keep us walking the precipice of deflation for at least that long. There will be a need for gaman.
I don't know how much pain or drudgery is in store for Zac Pessin personally, given that he is President and Chief Executive of the Distributed Capital Group; you can find him here crowing about double-digit returns on his investments in sub-Saharan Africa. But it's nice of our masters to let us know about the sacrifices we will be expected to make on their behalf.

Those who take the meat from the table
Teach contentment.
Those for whom the taxes are destined
Demand sacrifice.
Those who eat their fill speak to the hungry
Of wonderful times to come.
Those who lead the country into the abyss
Call ruling too difficult
For ordinary men.


  1. Brecht was the lead quote in my dissertation.

    and another from Mother Courage

    "Who's Defeated?The defeats and victories of the fellows at the top aren't always defeats and victories for the fellows at the bottom. Not at all. There have been cases where a defeat is a victory for those at the bottom. Its only their honor that's lost"

  2. The premise of Pessin's stoic ode is false. Japan has not been suffering from economic deprivation.

    Western commentators love to bash the Japanese economy, because it's paternalistic model tempers market competition with a modicum of social obligation. But that model still stacks up well against laissez-faire rivals.

    In December, the last stats I could find, Japan's unemployment rate was 4.6 percent. That low figure is typical of the two so-called "lost decades" of the 1990s and 2000s, when Japan was allegedly mired in stagnation. The "drudgery" the Japanese have been languishing under is the drudgery of full employment.

    It's true that during that period Japan's GDP growth wasn't gangbusters. But a lot of that is because of demographic changes that saw the labor force shrink a bit. Japan's per capita GDP growth and standard of living grew steadily through that period.

    The Japanese are substantially richer and more secure than they were ten and twenty years ago, so it's no wonder that they're bearing their hardships with such exemplary resignation.

  3. I wonder about Mr. Zachary Pessin's conception of 'pride in their country' and 'an inspiring life'.

  4. Will,

    Good point. Obviously it doesn't make his suggestion that what Americans need to do is give up hope any less grotesque, but you're right, Japan is a very strange country to use to make the point. Because on almost any social indicator -- not just employment but life expectancy, health outcomes, education, crime, income distribution, etc. -- Japan looks much better than the US. Of course the one group that really has had a lost decade is owners of capital. (One wonders who Pessin was talking to.) I wonder how much the lost decade discourse in Japan parallels the way the 1970s, which was a period of rapidly rising wages and living standards for the large majority of households (and the most egalitarian income distribution in modern US history), not to mention huge cultural progress in areas like equal rights for women, the beginning of environmentalism, etc. (and the best movies), are treated as some kind of economic disaster, presumably because it was a period when owners of financial assets did so poorly.

    There are a bunch of new books out about the 1970s, would be interesting to think about.

  5. Average hourly earnings adjusted for the CPI, however, declined steadily from early 1973 till early 1982 in the US.

  6. Not exactly. There was a rise between '75 and '78, between the two big drops.

    It's interesting that earnings/CPI continued to drop until the Clinton presidency. The only notable rise was between '95 and 2000.

    Bush brought that to a screeching halt.


  7. Yes, the 70s comparison was sort of off the cuff. Not sure it makes sense on further thought...

  8. @Josh,

    What especially doesn't make sense is the part about the 70s having the best movies.

    Hollywood's Golden Age in the 30s-50s--those movies are true humanist works of art. Everything that came after is unwatchable. (Godfathers excepted.)

  9. And 2001: a Space Odyssey excepted.

    Maybe a few others.