Eamonn Fingleton — After the Financial Times buyout, let’s stop belittling Japan’s success

Financial Times sold to Japanese media group Nikkei for £844m

For decades the Financial Times has hardly had a good word to say about the Japanese economy. It is a special irony therefore that the paper’s longtime British owner, the Pearson group, has now agreed to sell it to the Tokyo-based Nihon Keizai Shimbun (Nikkei) group.

How come it is Nikkei that is buying the FT, not the other way around? After all, the two companies have cooperated since at least as far back as the 1980s, and during most of that time the FT people have tended to condescend to their Japanese counterparts.

The truth is that Nikkei is a much stronger enterprise than the FT. This reflects the fact that the Japanese economy has been doing much better than successive FT correspondents – and their colleagues elsewhere in the anglophone media – have noticed.

One key factor that has led foreign observers to go astray is ideology: because Japan does not believe in Adam Smith’s “invisible hand”, its economic workings are reflexively belittled by many anglophone correspondents. FT correspondents in particular have long been blind to the long-term efficacy of the Japanese higher bureaucracy’s agenda – an agenda that has focused particularly on developing the nation’s prowess in manufactured exports. They generally eschew services because services typically need to be performed close to the customer and thus are much weaker exporters.

For nearly a century and a half, Japanese officials have been highly successful in “industrial targeting”. If they want to achieve global dominance in any particular industry, they take direct aim at foreign competitors and have little compunction about systematically weakening them. Hence, for instance, the fate of such once world-beating British industries as textile equipment, shipbuilding, motorcycles and compact family cars.…

The strength of the Japanese economy is evident in many other ways. Take healthcare. …. The key driver has been improvements in Japan’s socialist medical system.…

Another telling indicator is unemployment. As newly arrived foreign companies quickly discover, there is no reserve army of the unemployed.….

As for the FT, its takeover is consistent with a long-term trend for more and more of the commanding heights of the British economy to come under foreign control. Previous examples have included Corus, Cadbury, Pilkington and Jaguar. The difference is that this time, Britain is losing part of its soul.

The Guardian
After the Financial Times buyout, let’s stop belittling Japan’s success

Eamonn Fingleton