As the summer of racial unrest forced America to confront its racist past and present yet again, a book by Heather McGhee, The Sum of Us: What Racism Costs Everyone and How We Can Prosper Together, which documents how racial division prevents Americans from uniting to lift everyone's lot, has attracted a good deal of attention.
From welfare to education to policing, Americans have generally supported policies that lifted the white middle class. But as the middle class has become more racially diverse, politics has become a divisive zero-sum game, with many whites seeing government spending as shifting money away from them toward minorities, even if whites also benefit.
This politics of racial division forecloses a social consensus that could boost the U.S. as a whole, leading to flagging social infrastructure, sputtering criminal justice system reform and challenges in offering broad economic support even to counter the pandemic.
This is not a problem unique to the United States. Social scientists have studied the relationship between racial division and low levels of public goods provision in multiple countries and established that ethno-racially heterogeneous societies tend to provide less in the way of public services.
Plagued by suspicions that some groups might benefit more than others, diverse societies tend to have greater difficulty in reaching consensus and working together on a strategy for economic and social development that would improve everyone's lives.
On this count, Japan is at the other end of the spectrum. More ethno-racially homogenous than most other advanced democracies, Japan has fared well when it comes to providing public goods such as efficient public transportation systems, low crime rates and universal health care.
Japan is often quick to reach a broad consensus about government spending on public services, since people generally feel that everyone benefits if they all support each other. Strong social cohesion, facilitated by the relative homogeneity of the population, enables this social consensus that supports spending on public goods.
The flip side of this coin is Japanese society's persistent resistance to diversity and disruption. Used to the comfort of living and working with similar people, Japan has been criticized for its reluctance to accept immigrants.
In response, the Japanese government has rather clumsily allowed immigrant workers in recent decades, first encouraging the migration of Japanese-Brazilians on the basis of shared ethnic roots that were supposed to make it easy for them to assimilate.
Learning that the reality of Japanese-Brazilians' life in Japan did not support this idea, Japan then adopted trainee programs to bring in foreign workers on a temporary basis. With the emphasis squarely on the temporary nature of their stay, those who came to Japan under this scheme could not contribute toward the country's long-term diversity.
Faced with a declining population, Japan needs immigrant labor, and its business leaders have consistently supported accepting more migrant workers. In addition to addressing the labor shortage, a more diverse workforce would likely stimulate innovation and facilitate adaptation to changing economic environments. Much social science research has demonstrated positive relationships between diversity and innovation.
Yet Japan's leaders are having a hard time pressing ahead. While it is easy for the public to come to a consensus for policies that boost all Japanese, it has proved difficult for them to support any policy that would undermine Japan's homogeneity.
Aside from ethnic diversity, Japan's consensus-oriented society is generally resistant to change. Valuing the protection of all members, companies have been slow to streamline and transform their operations to adapt to the changing economic environment, resulting in the prolonged economic decline since the 1990s.
While Brazil is home to the world's largest overseas Japanese population, many Japanese-Brazilians who moved to Japan discovered it was not easy for them to assimilate.
Urged on by American consultants, Japan imported America's neoliberal economic model to revitalize its economy through this period, and the lifetime employment and seniority-based salary system has given way to a rise in temp workers and various attempts to introduce a merit-based salary system. These efforts have not met with much success, leaving behind a questionable legacy, including the suppression of wages after the labor shortage of recent years.
In the U.S., racial division undermines the provision of public goods that would reduce economic inequality. But its acceptance of diversity contributes to innovation and economic revitalization that keeps the U.S. at the vanguard of a new economy.
In Japan, ethno-racial harmony facilitates public goods provision that prevents economic inequality from spiraling out of control. But aversion to diversity and dissent makes it difficult to accept much-needed immigrant labor and to adapt to changes in the economic environment.
In both countries, these characteristics are ingrained into their social fabric and resistant to change. However, the two largest economies with a democratic polity have much to learn from each other, and they should work together to find solutions for their problems.
Otherwise, China's nondemocratic model could become the dominant model for economic success, with its top-down forced consensus and suppression of diversity.
Democracies have long proven better at correcting their mistakes and adjusting to changes in their environment. As the two largest democratic economies in the world, the U.S. and Japan should be able to overcome the cost of racial division and the cost of homogeneity respectively even if it takes decades to achieve that.