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Comment by andrewmutz | Hacker News Reader

Japanese and American companies have different purposes.

In Japan the corporation primarily provides stable income and employment for society, and secondarily returns on capital invested. In America, corporations primarily provide returns on capital invested and secondarily provide stable income and employment.

This shows up in the data too. Japanese corporations are less likely to go out of business but provide worse investment returns. American corporations provide better investment returns, but the citizens have to deal with layoffs.

Most citizens would prefer stability to growth, but I think the tradeoff has a lot of downstream consequences.

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>Japanese and American companies have different purposes. In Japan the corporation primarily provides stable income and employment for society,

Are you Japanese? Because this doesn't match what I know about Japanese companies, like Sony for example, who operate in a very American way.

Your image on Japanese vs American companies feels like the copy and pasted idealistic impression of what American redditors imagine Japanese companies would be like, rather than reality.

The idea that Japanese companies provide more stability and lower returns on capital isn't a hypothesis, it's backed up by data

https://www.nber.org/papers/w1762

https://ideas.repec.org/p/iza/izadps/dp6183.html

Failed businesses also tend to provide lower returns on capital, and that’s totally backed up by data. Doesn’t mean the “purpose” of those companies was to provide lower returns on capital.

The purpose of a system is what it does.

This is mostly a meaningless statement that can be used in any situation

It's a very meaningful statement when people claim that thing X's purpose is Y which is good, and therefore thing X is good, even though the actual outcome Z is not Y and in fact may be diametrically opposed to Y. Happens quite often.

I don't know if it really applies to the current thread, but I just wanted to point out that POSIWID is certainly not a vapid, empty concept.

> Most citizens would prefer stability to growth, but I think the tradeoff has a lot of downstream consequences.

People want personal stability, which in our current society means a stable job.

That doesn't have to be the case, though.

Overall, economic growth is good for society as a whole, so it makes sense that a state should encourage it as much as it can.

This means that what is good for an individual is not the same as what is good for society.

I think the ideal solution would be to keep the risk-taking in business that you need for good growth, and instead provide stability through strong social support services, like healthy unemployment insurance or UBI. That way, everyone can take risks to try to drive the economy forward, but not starve if things go poorly.

> Overall, economic growth is good for society as a whole, so it makes sense that a state should encourage it as much as it can.

The problem with basing the language in the aggregate, is implies that distribution doesn’t matter, and all modern economic models agree. This is a big problem for the reality of people living in ever increasing inequality. Money is a competitive resource, we use it to bid for real resources. If constant economic growth disproportionately goes to the already wealthy, it worsens inequality when resources to exploit become more scarce. It’s one thing to have massive swaths of untouched natural world to exploit for human benefits, but those days are long gone IMO.

Inequality is not "ever increasing". You should resist the urge to say everything is constantly getting worse just because that makes you look more sympathetic to the poor.

(A worse issue is that inequality decreasing can mean things are getting worse for everyone.)

> If constant economic growth disproportionately goes to the already wealthy, it worsens inequality when resources to exploit become more scarce.

Economic growth means resources get more plentiful.

I think that was the point I was trying to make, that both total economic output and distribution matter. Both matter in terms of overall citizen satisfaction.

If you have a very fair distribution of a very small productive output, everyone will be miserable because they don’t have enough to live. At the same time, producing a ton that only goes to a select few will also leave most people miserable.

We don’t want to go to either extreme. We want to find the best way to foster productivity while making sure everyone benefits from that productivity.

My suggestion is that you get the best of both by letting competition and innovation be rewarded, while also taking care of the ‘losers’ in that competition.

If you see how Japanese CEOs live, they live a far more deprived life on the backs of their employees than any billionary CEO in the USA. Japanese companies are centered around treating most employees like indentured servants in a sweatshop so the few bosses can have giant expense accounts, vacation houses, company cars, etc.

> they live a far more deprived life

It took me a minute to figure out the typo ("depraved" instead of "deprived")

Japan compares much better to the US in terms of how much wealth the top 1% control. 24.6% vs 34.8% according to https://wid.world

Graph here: https://imgur.com/a/UwWvaHW

That is true, but at this point in time, looking at wealth inequality in the US for comparison feels pointless, as the US can't be seen as a humanoid society anymore. By that I mean the riches of the Top 1%, and the "soon" attitude of the bottom 80% in the US feel alien, surreal, and perverted to an extent it stopped being useful as a measure for humans.

If you look at the graph I linked, you can see that the world average for that statistic has consistently been higher compared to the US, though the two series have been converging lately. So according to that data the US has not been uniquely unfair, but it has been getting worse.

I do think there will have to be large changes soon.

Depends what you mean by "control". If you don't own a nice house, car, driver etc. but your company just happens to provide it as a perk, then you still have it.

That's a fair point. Is it actually common for CEOs to live on a company property? I can see how transport would be company controlled.

Yu Suzuki ("creator of Virtual Fighter") had 3 company ferraris. He played while his employees worked 14+ hours days. It's extremely common in Japan for bosses to get tons of perks and have their employees overworked and underpaid. Programming job in Japan start at $20k a year and except for a few western companies, peak at ~$50k a year. Be careful what you wish for

What’s the difference exactly? I don’t think the pickers at Amazon would believe they’re living the high life thanks to the sacrifices Jeff is making.

Japanese CEOs have a Toyota Crown in their garage and spend each Friday night at a kyabakura/hostess bar with a few employees. They take a trip to Hawaii twice a year.

American CEOs are on the board of 8 companies but spend 5 minutes a year combined at the offices of those companies. They spend their weekends at private islands off the coast of the US Virgin Islands with other billionaires. They fire employees who ask for health care benefits or a day off. They actively endorse political candidates who went to the same private island with them and who will lengthen working hours, reduce benefits, and make it easier to fire employees. They want global surveillance to track anyone who's ever even considered saying anything bad about them. When it's possible to inject ads directly into our brains, those CEOs will force their employees to do it.

As an American who's been in Japan for a very long time and worked at Japanese companies, Japanese companies don't pay big bucks, but there are fewer deranged ultra rich people within them.

Depends on the scale of the company;

At the biggest ones you start to see branches of the organisation dedicated to c level services... Things like a driver awake and ready to go 24/7 (for the whole family), purchasing or even building apartments.

All available in the west, but the distinction is who directly pays for these things.

Stability is preferred to growth in the moment, but in retrospect and in comparison to others most people don’t want to give up what they have and go back in time.

And arguably growth could lead to better overall stability in the long run, as people find employment in new companies at higher wages over time with lower overall unemployment.

> but in retrospect and in comparison to others most people don’t want to give up what they have and go back in time.

And in the long-term, people start fleeing the "stable" countries for already-grown ones.

Stable income and employment feels like a distant 4th nowadays. Nothing feels stable.

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