At former Japanese Prime Minister Shinzo Abe's funeral in July, the streets were lined with people carrying flowers. His state funeral -- expected to be attended by world leaders -- will be held this Sept 27 in Tokyo.
Even now, the shock of Abe's assassination is still fresh. Whereas the United States loses thousands of lives every year to gun violence (owing to an absence of gun-safety laws), Japan's annual toll of gun deaths tends to be in the single digits.
Many of those present to mourn Abe would have been young workers who got their first jobs because of his economic programme, dubbed Abenomics. During Abe's long second term -- from the end of 2012 to September 2020, during the Covid-19 pandemic -- Japan added approximately five million new jobs.
When I first met Abe in 2001, he was serving as deputy chief cabinet secretary under Prime Minister Junichiro Koizumi, who was planning to visit North Korea. Among Mr Koizumi's staff and advisers, Abe stood out for his defiant stance against that country, which had been responsible for several abductions of Japanese young people. Abe's anger was palpable, and I could tell that it was born of sincere humanitarian concerns.
With his strong political and diplomatic stances, Abe was generally considered to belong to the cabinet's hawkish wing of the Liberal Democratic Party. He was particularly determined to resist China's claim to Taiwan. In a widely read Project Syndicate commentary this past April, he challenged the merit of Henry Kissinger's concept of "strategic ambiguity", warning that China could soon act on its temptation to invade Taiwan.
Abe argued that the United States should straightforwardly declare that it would defend Taiwan, rather than relying on "strategic ambiguity". US Speaker of the House Nancy Pelosi's recent visit to the island could be seen as a step in this direction.
Abe was rightly regarded as a conservative politician. When I was asked to serve as one of his advisers, I could not help but point out, "I may be more liberal than you." He smiled and went ahead. It worked out, and I eventually came to consider him more liberal than I had thought on economic issues -- perhaps even more liberal than me. After all, just before his second premiership, he told me that, "In my earlier government days, I studied social security" -- a topic that tends to appeal more to liberal-minded students.
Abe's economic liberalism then became more apparent to me in our conversations during his second premiership. Throughout my time advising him, we had many policy discussions, and we disagreed only a few times. On one occasion, when we were talking about the role of government intervention in the "spring offensive" (annual wage negotiations), I presented the conventional CEO view: because employers incur losses under capitalism, they should be given the right to determine wages. But Abe immediately interrupted me: "Koichi, you are wrong!"
I have come to realise that he was right. I was adhering to traditional economic thought and had under-emphasised the issue of technological change, which has permitted employers to replace more workers with machines. Government initiatives are needed not only to create public infrastructure and shape incentives, but also to prevent worker dissatisfaction. Abe was fully ahead of the "New Capitalism" that the present prime minister, Fumio Kishida, is promoting.
True, even as they recognise Abenomics' contributions to employment, critics claim that the average real (inflation-adjusted) wage did not increase during Abe's tenure. But Abe pushed back on this view in a recent post-retirement interview with me, noting that total annual compensation increased by more than ¥35.2 trillion (8.9 billion baht) per year.
He went on to explain: "In the hypothetical example of the Abe family, suppose I was earning monthly wages of $6,000. The success of Abenomics enabled my wife to have an opportunity to work as a part-timer for $1,000. My wages do not change, but the average per capita wage will be reduced from $6,000 to $3,500. Is that something to worry about?"
In other words, Abenomics helped to democratise the Japanese labour market. The total income of the economy was substantially increased by adding new workers, and particularly by increasing the number of non-regular workers, many of whom are female.
Again, Abe's argument ultimately sounded like that of a liberal economist. But, of course, labels like "liberal" or "conservative" don't mean much in the end. What mattered was that Abe was genuinely concerned for the welfare of Japanese workers and the security of his country. Though he was no longer prime minister when his life was cut short, he was still a major political force. Both Japan and the world lost an outstanding leader. ©2022 Project Syndicate
Koichi Hamada, Professor Emeritus at Yale University, was a special adviser to former Japanese Prime Minister Shinzo Abe.
