18/11/2017 Western freedom and Japanese culture

              For centuries Western philosophy has regarded freedom as the most important value. The majority of Europeans and Americans seem to believe that they are entirely free to do anything if they do not harm others, although whether they actually behave according to this belief is a separate question. In economics terms, they believe that an individual has freedom of choice as far as he does not inflict external diseconomies to others. The key to understanding Japanese culture lies in realizing that this belief has serious problems.
              It is worthwhile to note that economics has a paradigm called general equilibrium theory which is supposed to justify the above belief. It proposes that if all individuals act from self-interests utilizing freedom of choice, the allocation of resources of the economy will become efficient. This is called the first proposition of welfare economics. Neoliberalism, which seeks for globalization, is based on this proposition or neoclassical economics.
              This justification, however, depends on many unrealistic assumptions. One of them is that all transactions are carried out by complete contracts free of cost. Complete contracts stand for sufficiently detailed contracts that would not foment disputes. This implies that detailed contracts control all human relations including those within organizations, among teachers and students, between lovers, etc., though, strictly speaking, lovers do not appear in the theory.
The cost of making a contract is an example of what is called transaction cost in economics. Any detailed contract can be made in general equilibrium theory because transaction costs are assumed to be zero. It is obvious that such a theory is quite unrealistic. Sufficiently detailed contracts between employer and employee, for example, would incur astronomical costs.
              Existence of transaction costs in the real world generates situations of insufficiently detailed contracts or game situations, which are characterized by interdependence among individuals. In these situations, individuals' lawful behavior is likely to influence the welfare of other people. For instance, they may behave uncooperatively.
A typical and interesting game in relation to the problem of freedom is prisoners’ dilemma, in which individuals (called players) freely choose strategies to maximize their payoffs. Behaving in this way they lead to an inefficient outcome. If they could trust each other and cooperate, they would lead to an efficient one, i.e., they would both become happier. The real world is full of this type of situations involving decisions as to whether to cooperate. Cooperation cannot be achieved easily in the real world because sufficiently detailed contracts are hard to be made.
A fundamental cultural difference between Western countries and Japan lies in the difference in the degree to which contracts have been utilized in their histories. In contrast with Western countries, Japan has not used contracts very often in business. For instance, when I got employed by the university for which I worked more than thirty years, I did not sign a contract but a pledge of about two lines of words.
              A society that does not so much rely on contracts requires special ethics and human relations. Such values as trust, enryo,* sincerity, and punctuality are very important. In many cases those values become more important than freedom.
              I would like to talk about this matter again.

*I do not find any proper English word for the Japanese word enryo, which means a person's attitude of sacrificing his freedom for the benefit of the group he belongs to even though seeking for more freedom is perfectly legal. My dictionaries list translations such as reserve, mindfulness, and self-restraint, but I am not quite sure if any of them is proper.

Comments and questions are welcome.
Kazuhiro Arai’s Japanese blog:        　 https://araikazuhiro.blogspot.jp/

Kazuhiro Arai’s Japanese home page:   http://araikazuhiro.world.coocan.jp/









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