Special Issue
September 2022

Special
Dialogue“Toward a Sustainable Capitalism”
A Series of Dialogues between Business andPhilosophy
KEIDANREN The 21st Century Public Policy Institute analyzes the impact that changes
in the international situation, technological innovation, and the spread of infectious diseases arehaving on capitalism and democracy. As part of these efforts, we are carrying out exchanges of
opinions on these issues between project leader and philosopher Takahiro Nakajima
and Keidanren executives and representatives of member companies. For this edition, we feature awide-ranging conversation focused on “how to build the capitalism of the future” between Project
Leader Professor Nakajima and Tetsuji Ohashi, Vice Chair of KEIDANREN and Chair of the Committee
on Management and Labor Policy (Chairman of the Board, Komatsu, Ltd.).

Date of Conversation: May 24, 2022

Vice Chair,, Keidanren and
Chairman of the Board,
Komatsu, Ltd..

Tetsuji Ohashi

Project
jleader,, Thee 21st Centuryy
Public Policyy Institute,, and Professor,,
Institute of Advanced Studies on Asia
and Director,, East Asian Academyy for New
Liberal Arts, The University of Tokyoyo

Takahiro Nakajima

1 Moderator Makoto Ota, Acting Director, The 21stCentury Public Policy InstituteToday, our focus is on how to build the capitalism of the
future. I’d like our guest speakers to talk about the direction
Japan should aim for in the future, and some of thechallenges that need to be addressed to make that a reality,
bearing in mind the sustainable capitalism endorsed by
Keidanren and Professor Nakajima’s ideas for a model ofcapitalism that can help to enrich people’s lives. Today, I
want to focus particularly on the development of scienceand technology and the impact that this has on humanbeings and human societies, and also to consider working
styles and efforts at regional vitalization.
But let me start by asking you how you see the state ofthings in Japan today.

 Takahiro Nakajima, Project Leader, The 21stCentury Public Policy Institute
I found myself nodding in agreement just now ateverything that Mr. Ohashi was saying. This issue of
institutional fatigue is a major problem in Japan at the
moment. I think that at least part of the reason why wehaven’t been able to introduce measures to respond to thepandemic in a timely manner is because our systems are
past their sell-by date. The reality is that serious questions
are being asked about our imaginative ability to come up
with new systems, but this is something that is rarely
discussed. I think that lack of energy and drive has perhaps
worsened the feeling of stagnation during the pandemic.

The state of Japan today Tetsuji Ohashi
All the issues that were there already before the pandemic
have risen to the surface. Before the pandemic, we already
faced problems with the environment and social inequalities,
in the context of a declining population. People were alreadyaware that we needed to do something to address these issues.
And then the pandemic hit and made these problems a lot
more prominent than they had been before.
In particular, I think there’s no question that we are seeing
institutional fatigue in many of the systems that were put
in place after World War II. The slowness with which
we’re moving to digitalization is just one example of this.
Another thing I feel is a real sense of stagnation in Japan. Our
company carries out a survey on employee engagement levels
around the world, and the country with the lowest scores isJapan. I sometimes feel as though the various problems wehave in the country are somehow sapping the energy andengagement of the people who live in this society. Even
young people aren’t energetic or optimistic. I think we needmore energy and vitality, not only in the economy, but in thesense of encouraging people to live their lives to the full. I
want my children’s and grandchildren’s generation to work
hard and do their best for the future. I sometimes ask myself
what we can do to contribute to that.

I feel there is a kind of mechanism within Japanese societythat works to stifle changes that might otherwise behappening in society. Normally you’d want systems inplace to recognize and reward attempts to change, even if
those efforts don’t succeed. But our society has become
absolutely permeated with a way of thinking that believes
that failure must be avoided at all costs, that we must
always aim to achieve the average score. I think this is thetrue nature of that sense of suffocation and stagnation.
I wonder if Mr. Ohashi has any concrete ideas forattempting to break out of this?
 Ohashi
One thing of course would be to encourage people to study
the liberal arts. But even more fundamental, I think, is theway that people think about nature and the planet andliving things and the sense of distance between thesethings and us. If people could encounter nature more
directly, if they could touch it and feel for themselves thatsomething is changing, I think they would start to ask
themselves: “What is happening? We’re doing something
wrong.” This isn’t quite what Kohei Saito discusses in his
book Hito Shinsei no Shihonron [Capital in the
Anthropocene] (Shueisha Shinsho), but I think there is akind of boundary there. This may be a problem with theeducation system or a problem in society, though, I feelthat at the moment people aren’t really given the time toexperience and feel this for themselves.

 Nakajima

 Ohashi

There’s a certain kind of physical knowledge that has
become impoverished, I think. Physical contact with theearth, with insects, plants, and animals, in a sense forms
the foundation of all human experience. It’s become moredifficult for people to develop a sense that there are certain
spheres that human beings simply shouldn’t enter.

Generally speaking, science and technology are extremely
effective not only in terms of convenience but forovercoming all kinds of problems. In industries likeconstruction and mining, for example, where work on thefrontlines is quite dangerous even today, I think it isimportant to use science and technology to improve safety
and productivity. However, this also has drawbacks. We
don’t want to see a situation where mechanization makes
development so easy that people go in digging in areas
where human beings have no right to intrude.

Systems exist to support this kind of physical knowledge
and the experiences based in it, but institutional fatigue ishampering these systems, including education, and making
it impossible for this sense of physical knowledge to
blossom and develop. Improving our systems can help us
to make human lives richer. I think it’s important tocommunicate this message to young people.
 Moderator Ota
The remarks you have both made strike me as being
closely related to the question of how to live in a society
where science and technology have developed to a highlevel. Perhaps I could get you to explore your ideas on this
topic, starting with the relationship between human beingsand development in that sense, and the impact that scienceand technology have on society.
The development of science and technology andits impact on society Nakajima
I think behind the development of science and technology
is a desire to look for our own convenience, and areadiness to sacrifice things for that convenience. If you
look at the way information technology is developing
today, you can see a situation in which people apparently
don’t care how their data is used. They want informationeven if it means paying for it with their own time, anddon’t particularly care if they end up being used byinformation. All for the sake of convenience.
I think this means that at some stage the technology has
overtaken us and has started to imprison people. Of
course, clearly technology also has made people’s lives
richer. There is that side to it as well. But I think we needto step back and ask ourselves to what extent thistechnology is effective. To what extent is it really helping
to enrich human lives? If at least a part of the feeling ofclaustrophobia and stagnation that young people in Japanare feeling stems from technology, then I think older
generations need to work to bring move that in a positive
direction.

I think maybe we should try to differentiate between thescience and technology as it relates to safety and human
lives, and science and technology that just makes things
more convenient. We should try to keep these twocategories apart if we can. In our company, in making
decisions we act according to an order of priorities
summed up in the acronym SLQDC: Safety, Law, Quality,
Delivery, and Cost. First, we look at aspects that might
affect life or health. That’s our number one priority. Next,
we make sure that we are abiding by all laws andregulations, and then finally we try to do what we can tomaximize our profit.
We also think of SLQDC from the customer’s point ofview in practical applications of our own technology. All
our clients are different, of course, but our philosophy isalways to produce reliable and high-quality products thattake into consideration the health and safety of thecustomer, as well as respect for the environment andvarious regulations. And we want to make that a reality not
in 10 years’ time, but right now.
 Nakajima
I think you’re quite right: we need to dissect and break
down technology itself. Personally, I’m interested in theidea of Hito no shihonshugi (Capitalism for Human Cobecoming), as I call it in my book. My hope is to see
capitalism move in a direction that will help to enrichpeople’s lives. I think of technology in the same kind ofway. I think the kind of technology that is desirable istechnology that makes people’s lives richer and more
prosperous—that’s the kind of technology we want to see.
It is certainly true that medicines that cure diseases andother things like that relate directly to human life. Things
like this cannot be properly evaluated by the logic of themarketplace alone.
I was impressed as I listened to what you were saying justnow, and think the philosophy followed by your company
is praiseworthy. But there are other companies, I think,that prioritize costs over safety.
 Ohashi
I’m sure there are some companies like that. And I think it’s atemptation that exists for all organizations and all companies.
In that sense, it’s certainly true that not everyone is perfect.
But on the other hand, if everyone was merely out to put
profits first, society wouldn’t be able to function at all. I thinkthat way of thinking I mentioned earlier is important. It’s
important to make a difference in the areas where you cantake actions yourself, and our aim is to increase the number ofcolleagues who think the same way.
3 Nakajima Nakajima

There need to be guarantees within the system that ensurethat safety comes first, ahead of competing priorities.
Looking from the outside, however, I get the impressionthat in some areas this kind of guarantee is not yet
properly in place within systems. Individual companies areworking hard and doing their best, and companies likeyours are working to increase the number of like-mindedpeople in the industry. I think this kind of effort is what
will help make capitalism better. I only wish there weresomething more systematic in place that could do more to
support and promote these efforts on the part of individualcompanies.

In that way, you are building up a kind of memory of theland.
 OhashiRight. And in fact, four companies including us havejoined together to start a new platform called LANDLOG,
with the idea that we should do more to increase the public
usefulness of this data. Even in the case of small data, if
you eventually get land data on a global level, it will behuge. The question then becomes, how should we handle
this information? Our principle is that it shouldn’t bemonopolized by an individual company.

 Ohashi
I think you’re quite right. If a company is serious about
implementing the SLQDC system properly, it inevitably
involves costs. I think we need a framework that evaluates
organizations that take the appropriate measures to follow
this system even if it involves increased costs.
Sustainable capitalism and making information
visible to all Ohashi
We need to get away from the tendency to want to simply
increase profits on the balance sheets, or to chase aftermarket capitalization. This is something that Keidanren
has been saying for the past year and a half, as part of The
NEW Growth Strategy, which advocates sustainable
capitalism as a new form of capitalism. I also think weneed to change the criteria by which we evaluate
companies and their businesses. We won’t achieve
anything unless we can change where money goes.
Ultimately, this will boil down to how much can be done
to limit speculation. One of the possible things that might
be used to achieve this is information technology. For
example, Smart Construction, which we started six years
ago. Construction machinery is equipped with auto-control
functions and GPS, allowing construction work to be
carried out automatically or semi-automatically. Anotherbenefit is that you obtain a complete read-out of all thedata relating to a construction project. The constructionindustry in Japan is made up mostly of small companies.
Management succession is often a problem, a lot of thework is quite dangerous, accidents are not uncommon.
That’s the current reality facing the industry. We started
Smart Construction as part of an attempt to do something
to improve current conditions in the industry. That
accumulation of data on the construction work process isvery important. At the end of a project or phase of a
project, we might have data showing how many
centimeters of ground were backfilled, using what type ofmachinery, in the course of three months, for example.
This kind of data can be extremely useful when the workneeds to be done again in ten or twenty years’ time.

4

21PPI NEWS LETTER SEP. 2022

 Nakajima
I think you raise a very important subject. In a somewhat
different and large context, when Edo became Tokyo after
the Meiji Restoration, the new government worked to
obliterate the memory of the old city Edo had been. But if
you go to Kyoto, all these different memories fromdifferent stages of history are preserved there, piled up on
top of one another like different geological strata. And if
you ask yourself which of those two cities makes it easierfor us to look back on and relate to history, the answer isclearly Kyoto. I spoke just now about building up amemory of the land. The term just popped into my head.
But in fact, if you think about it, by gathering such data
you can build up a kind of curriculum vitae of the land andthe uses to which it has been put. And that record can help
you to see and understand the actions taken by people in acertain period. It makes visible the engagement ofdifferent people at different times in history.
That kind of thing should not be monopolized by a single
company. It should be shared as a public asset. That
memory of the land should be part of the commons sharedby society as a whole. And by making this data available
to everyone, we are helping to open up the possibility of
new ways of using the land, new ways of shaping thefuture. There are all kinds of potential in there if we makethe data free for everyone to use. I felt that strongly.
 OhashiWho should own the data on a construction project carriedout on a particular piece of land? The land owner? The
person who carried out the work? Once you start to look at
the question “Who does this belong to?” there are potential
business opportunities in all kinds of things. But I thinkit’s important that this kind of data should not bemonopolized by a single individual company.
 Nakajima
I think by making this memory of the land public in thisway, you make it possible for people to use the land betterin the future, or to evaluate the uses made of the land in
the past. And I think this might help to bring majorchanges to the kind of relationship we have with the land.
It might allow us to develop a freer relationship with theland, that is less bound by land ownership rights.

 Moderator Ota

 Nakajima

I’m sure revitalization of the regions and the role ofcompanies will be extremely important in terms ofbringing new vitality to Japanese society. I wonder if I
could get you to talk a little first, Mr. Ohashi, about thefounding spirit of your company, and your thoughts onregional revitalization.

During the Edo Period, for example, Japan was divided up
into numerous different domains, and each domain had its
own richly distinctive culture. These domains were notisolated from one another. People would travel back andforth from one domain to another, and this led to a crosspollination and communication between the cultures ofdifferent domains. Take the haiku poet Matsuo Basho, forexample. His famous journey that led to the book Oku no
hosomichi (The Narrow Road to the Deep North) was atrip in which he visited haikai poetry circles in various
parts of Honshu. And that kind of culture existed in every
domain—a culture that was at once distinctive and sharedwith other domains at the same time.

Revitalizing Japanese society Ohashi
We recently marked 101 years since our company wasestablished. At the time, our founder laid out four priorities
for the new company: 1. Global expansion, 2. Quality first,
3. Technological innovation, and 4. Employee
development. These four principles are still followed by
all our employees today.
Another thing is that at our company we define corporate
value in our own distinctive way, as the sum of the trust
placed in us by all our stakeholders. We have always
operated according to this way of thinking, and we value
our relationships with the region and the local community.
These are extremely important to us. They represent boththe source of our workforce and are also the people who
evaluate us. Of course, as a company we want to increase
our profit and return that to our stakeholders. And one of
the ways we do that is the contributions we make to theregion and the community. In particular, I think it’s
important that we do as much as we possibly can in
Ishikawa Prefecture and the wider Hokuriku region, as away of giving back to the community that has supported us
throughout the 101 years of our existence. We make sureto get involved in a wide range of activities as a way ofgiving something back to the community.
According to the Vital Statistics survey compiled by the
Ministry of Health, Labour and Welfare, the difference
between the number of births and deaths in Japan in 2020
was around 530,000 people. That means that the
population of Japan as a whole is decreasing by theequivalent of the population of Tottori Prefecture every
year. Looked at more closely, although during the
pandemic there was a slight weakening in the tendency forthe population to concentrate in the big cities, neverthelessthe population in the regions is falling, and particularly inthe age groups from 18 to around 30. The population of
women is falling particularly fast in many areas. This issomething that every prefecture is experiencing. Ishikawa
is no exception.

I believe that culture is one of the keys to regional
revitalization. Unless we can create a situation where there
is a rich sense of culture even in the regions, or perhaps
even particularly in the regions, I think it is unlikely thatyoung people will want to settle down and make their lives
in areas of the country away from the big cities.
Recently, I’ve noticed that increasing numbers of writers
and other creative workers are basing themselves in rural
areas or regional towns and cities to do their work. I think
we could do more to support this trend, and regional
universities have a terrifically important role to play.
Unless they have the opportunity to experience cuttingedge developments in their own regions, young people
will go off to Tokyo. We need to do more to young people
understand that they can experience similar things in theregions too.
I also feel that as interpersonal relationships have become
impoverished in recent years, the sense of isolation thatmany people feel has become worse in the regions,precisely because you feel isolated away from the big
cities. I think that’s one aspect of it. When you’re trying torevitalize the regions, it’s also important to enrich that kindof social capital that links people together. That means
investing in culture, and that will require investment that is
not simply market-driven. I think this is the kind of thing
we need to do to enrich culture in the regions.

If you listen to what people are saying, it’s clear that it’s
not just a lack of places of work. Culture, and the naturalenvironment are also important. A lot of regional areas
don’t offer much in terms of these things either. We’retrying to create places where people can try all kinds ofdifferent activities, rather than only offering a place of
employment. At the moment, we are collaborating with
Waseda University and Ishikawa Prefecture to help
provide training for highly skilled human resources in
artificial intelligence (AI) and the Internet of Things (IoT)
and other cutting-edge technology fields.

5 Ohashi
Kanazawa, the biggest city in Ishikawa, is obviously
somewhere that is extremely rich in terms of culture. Evenso, people still want to go to Osaka or Kyoto, or to Tokyo.
One approach would be to say it doesn’t matter if people
move to the big cities when they’re young, as long as theycome back later. But if you look at recent demographic
trends, people who grow up in the regions and move to the
big cities tend to stay on in Tokyo or Osaka and don’t
return to their hometowns even after they reach retirementage. We see the same thing in our company. If they raise afamily in the big city, their children grow up thinking ofTokyo or Osaka as home, and they lose their connection to
the place they originally came from.
I think it’s important to do everything we can to make theregions more welcoming for families—starting from theage when people are getting married and raising a family.
If people experience for themselves what is truly importantin life—including culture, the natural environment,
watching the clouds drift by, watching the river flow, thesea . . . that kind of experience of what’s important canhelp people grow into more rounded, grounded
individuals.
 Nakajima
In a way, it’s sad that people can’t return to theirhometowns even after reaching retirement age.
Presumably part of the reason is that they don’t, or can’t,
maintain dual residences between the two places during
their careers. That makes it more difficult to return. In mybook Hito no shihonshugi (Capitalism for Human Cobecoming), a lot of people discussed the importance of
maintaining dual residences or multiple residences. I thinkit’s important to divide your time between a local region
and Tokyo from an early stage. Of course, this isn’t easy. It
involves additional costs and transportation time. But itwould be no bad thing if more people could get a taste of
the positive aspects of life both in Tokyo and in theregions.
 Ohashi
I agree that dividing your time between two bases is agood system. It strengthens your ongoing commitment to aplace you have a connection to and a feeling for. It also
allows you to experience the differences between Tokyoand Ishikawa, the different values, and to interact indiverse ways with different kinds of people. And theseexperiences can help you develop into a stronger, morerounded person.
 Nakajima
In terms of dual residence, I think more could be done not
only in terms of tax breaks but also in terms of voting inelections. I think democracy is coming to a turning point.
As things like dual residency become more common,
there’s room to do more in terms of tweaking the ways inwhich people can communicate their views to the region
where they live, and makes their wishes known for thekind of local communities they want to live in, and so on.

6

21PPI NEWS LETTER SEP. 2022

If there is more support in terms of systems for things likedual residence, I feel that the framework in place now,which pits the regions against Tokyo and the other big
cities, will probably fall apart. If we can use our powers ofimagination to come up with the right kinds of systems,
we might be able to do something to improve thesomewhat deadlocked frameworks we have at the moment.
 Moderator Ota
Starting from the question of regional revitalization andhow to bring new energy to Japan, you have both spoken
about the fundamental issues of working styles
themselves, including where to live while pursuing careers
and what working styles to adopt. Perhaps I could use thisopportunity to ask you for your ideas on how we should
think about the reforming the way we work.
Work style reforms
 OhashiWork style reforms is one of the issues I’m working on
within Keidanren. We have made progress in the past 10 or
15 years in terms of reducing working hours. But as I saidat the outset, the economy is stagnant and isn’t reallygrowing at all. Wages are also quite low compared to
global levels, and value added per worker is also low. We
believe that output is a large part of this. Therefore,
engagement is important, and we are working on various
aspects, including making better use of IT, diversity,
opportunity gaps between companies, regional issues,
start-ups, succession problems, AI and IoT education
training, and reviewing the Japanese model of employment
still common in large companies.
One question that particularly interests me is the sense thatyour work is rewarding and worthwhile. Where does thatcome from? Even with employees performing the sameroutine work every day, some of them will feel satisfied
and fulfilled doing that work, and others won’t. The
purpose of the company also makes a difference. Is thecompany working for people’s safety and happiness, forexample, or is it merely doing everything it can to make aprofit? These things can have a major impact on the extent
to which employees find satisfaction and meaning in theirwork.
To achieve work styles that maximize output, we will needto gradually change laws and other regulations. The
legislation and rules to do with labor and working is quite
rigid, and a lot of the patterns of behavior we see are theresult of these rules. I think it will be important,particularly in Japan, to create alternative models for
acceptable approaches to work: prioritizing job
satisfaction, perhaps, or ensuring that people can take amore relaxed and freer approach to work, for example.

 Ohashi
I think output is likely to be greater with a discretionary
labor system. In the immediate term we should look at
broadening the professional fields in which the system isused. In jobs where an employee is using specialist
knowledge and creativity, it is impossible to evaluate thework done on the metric of working hours.

 Nakajima
In my own job, I’m on a discretionary labor system, sothat my salary doesn’t change even if I do overtime. In asense, I am free to work as I see fit. I think if people arefree to work as they like, people will divide into twogroups. On the one hand, you may have some people who
are overwhelmed or crushed by that freedom. But on theother hand, you have people who throw themselves intocreativity, who have the experience being in a kind of“zone.” I sometimes have that experience myself when
I’m doing research or writing papers. And that can resultin a good paper or a good book. But it doesn’t feel likesomething I’m doing alone. It feels as though I’m in aworkshop or atelier with several other people. It’s as if theknowledge and understanding of many people is coming
together and blossoming into something new.
Isn’t this what meaningful work and job satisfaction
mean? If more people could experience this, it would
result in a totally different kind of engagement from theone we see now. And if you start to think about what lies at
the heart of this, I think it comes down to “meaning.” How
can we give everyone the sense that they are doing
something that has meaning? How can we put theconditions in place that would make that possible? I think
those are the questions we need to answer.
Teaching in a university, I often think that the knowledge
and expertise a person gains from four years of study for
an undergraduate degree stays current for perhaps two or
three years. Even the knowledge a person gains fromgoing on to graduate studies and earning a PhD might notlast ten years before it becomes old and out of date. It isvital to think in terms of studying throughout our lives andcareers, in the form of recurrent education. The knowledge
and experiences you’ve built up to date will become
obsolete. They will no longer serve a purpose. And whenthat happens, there should be no problem, no shame inmoving onto something else, in making a fresh start andtrying something new. You can reset and try something
new. I think we need to put the conditions in place thatwill make that kind of approach feasible in the future.

There is also the issue of obsolescence in science andtechnology. That’s unavoidable. People will inevitably
need to move jobs as the structure of industry changes inthe years to come. In that sense, in Japan a lot of that job
movement at the moment happens within companies, but I
think we need to do more to create systems andframeworks that will allow more movement between
companies and across professional fields in the future. For
that, it will be important for people to learn new skills
through recurrent education or reskilling, and then go on
into their next job, perhaps in a new field or new company.
 Nakajima
I often say, half-jokingly, that the private sector should
consider introducing a system like the academic sabbaticalthat exists in academia. You could let employees take anextended period off once every few years, with a guaranteethat their jobs would be there for them when they cameback. People could use that time not just to relax and havea holiday, but to improve their skills, or perhaps go into
schools to share their experiences mainly in the workplacewith the younger generation. I think that would bringabout a big change in the form of education in our middle
and high schools today. There are various steps we could
take with regard to the way in which people work, andtake time off from work, but the environment or culture
for moving that conversation forward perhaps isn’t yet inplace, which seems a shame.
 Ohashi
We are in an age where it is not uncommon for people tolive to a hundred. That means that people can continue todivide their time between the big city and one of theregions even after retirement, and help out with activities
in the local area that they have a personal attachment to, an
area they have a feel for and where they know people inthe community. Even if they do it just once a week, there
are lots of things you can do by using your years of healthand fitness until 80 or so. And the potential is even greater
if you start while you are still young, or perhaps take thetime to try something during a mid-career sabbatical.
 Moderator Ota
What you’ve been saying touches on the question of being
able to discover the issues and challenges that need to beaddressed. This is a subject you have often talked about,
Mr. Ohashi. It also relates to the ability to define
problems—something that you have often spoken of as apriority, Professor Nakajima. What are your thoughts onhuman resources training in the years to come?

7

Human resources training in the coming decades OhashiIn manufacturing, we believe that if we can grasp the
specific relationship between cause and effect, we will be atleast halfway to finding a solution to the problem. This iswhat I mean by the ability to identify challenges. Although
in some cases it may be possible to identify issues that need
to be addressed by relying on your own logic or supply-sideideas, in manufacturing at least, we generally look to ourcustomers, or society in general. We look carefully at theissues that are causing problems for society or customers,
and that is how we identify the areas we need to address.
Take these flowers here on the table in front of me, forexample. You might look at those flowers closely. Youmight notice, “This part is sticking to this part here, becauseof the way this other part is arranged over here.” You would
examine everything closely and see if there are things thatcan be improved. You can look at everything like that, onvarious levels. The forest, the trees, down to the leaves on
the trees. You look at things from various angles. Just lookfirst, and try to notice problems or issues that can beaddressed. It’s the same in a factory. We encourage people
to develop the habit of looking carefully. Go beyond thesurface. Dig into things a bit and think about what you areseeing. Are the proper safety procedures being taken? Takea closer look. What are the potential problems? What areas
might be causing problems? Once that habit is in place, we
can work on breaking down the specific individual issues
raised by customers and the wider society. Once you can see
a problem, I think you’re at least halfway to visualizing amethod to resolve it.
 Nakajima
Many people tend to ask questions by thinking of the
future as an extension of the possibilities that have existed
in the past. But that can only ever be one form of theanswer. It is not a question. Sometimes I think new issues
and challenges can be brought out into the open by adesire for something, by wanting something new. This isalso a kind of reasoning or inference, I suppose.
I think perhaps we need the same kind of thing in training
human resources too—a different kind of approach from
simply thinking of the future as an extension of present
potential. A different approach that produces newquestions and new challenges through the power ofwanting something.

For that to be feasible, physical understanding andknowledge will be vital. That’s why I think there is no
future in any approach to trying to train and educate
people for the workplace that does not incorporate thingsand people from the wider world. It’s vital to bring people
into contact with nature and art.
 Moderator Ota
Mr. Ohashi, you’ve spoken today about the importance ofcontact with nature, about the importance of being able towatch the clouds. And I understand that you, Professor
Nakajima, have been pressing for a long time the idea ofan arts college within the University of Tokyo. As things
move in this direction, refining people’s sensibilities will
become increasingly important in the future. I wonder if I
could get you to talk a little more about that aspect ofthings.
The importance of incorporating the liberal arts
into education
 Nakajima
I’ve been saying for a long time that we should aim to
move beyond the division between humanities and thesciences, but it’s not easy. My idea is that the arts canserve to join the two, and perhaps help us to scale the wall
between the humanities and sciences. I’ve suggested
putting a system in place within the university that would
make it possible to study all three areas: the humanities,
the sciences, and the arts.
In terms of why I think that’s important, it is sometimes
said that reason is the foundation of all logical thought andinference. But I have come to believe that sensibility isalso part of it—and in fact might have a decisive influenceon steering our thinking and inference. This question of
the emotions and feelings is receiving a lot of attention
around the world right now.
Switching tack slightly, if you look at the East Asian
tradition, for example, in China you have the idea of “rites
and music” (li yuan), the two things going hand-in-hand as
certain norms of behavior and as a kind of crystallizationof a certain kind of music, both built on the same kind ofrefined sensibility. Of course, there are aspects of oursensibility that are extremely uncertain and unstable. But if
we accept that this is part of our human condition as
beings who inhabit a physical body, training andcultivating that sensibility and making our emotional lives
richer is essential. And I think the classics, at least in East
Asia, have always sought to do that.
I think we could do more in education and workplace
training to cultivate that kind of sensibility again, in amore modern way. Particularly in higher education, it’s
essential, and that’s why I’m involved in various
endeavors along those lines at the moment.

8

21PPI NEWS LETTER SEP. 2022

 Ohashi
I totally agree. Even in universities in other countries,
these things haven’t always been there. When I was astudent at Stanford from 1982 to 1984, for example, there
was hardly any mention of business ethics in any of theclasses I took. But later, when I was at Harvard, in 1998 or
1999, subjects like art and business ethics had been
introduced to the curriculum and accounted for around
10% of classroom time.
Ultimately, I think people need to make judgements.
Should I step forward, do I go to the right or to the left,should I step back, or stay where I am? If we have refinedsensibility, if we’re in touch with our feelings, this cangive us a sense of what we should do when we areconfronted with these decisions. But if these feelings are
not as sharp as they should be, we’re at risk of making bad
decisions and doing something that’s not in our bestinterests. I feel that part of the reason why capitalism hasgone too far is connected with this kind of thing, and I
agree with Professor Nakajima that the further spread of
East Asian thought and philosophy would be no bad
thing—the Chinese ideas about rites and music you
mention would be an example of that, I think.
 Moderator Ota
For this final round of questions and comments, I’d like to
get you to talk about sustainable capitalism. How should
we look to make capitalism more sustainable? Perhaps I
could get you to describe your vision for the future ofcapitalism. What form would a more sustainable form ofcapitalism take?
The future of capitalism
 Nakajima
Young people today are extremely skeptical about whether
capitalism is something that is sustainable or not. That’s
one reason why books on Marxism have been selling sowell recently.
I understand their feelings of worry and irritation only too
well, at least in some aspects. But that doesn’t mean you
can just suddenly give up on capitalism. I think we’regoing to have to work to “domesticate” or “tame”
capitalism in some form, or try to make it into something a
bit wiser and more intelligent.
The original idea of capitalism as I understand is that you
invest in something, and that investment is used to develop
products, services, and people. Profits go up, and these are
returned to investors and other stakeholders. That’s theframework as I understand it. But I wonder if that kind of
proper investment is actually taking place in today’s
capitalism?
What we need to encourage is not speculation but
investment that will contribute to ethical consumption andproduction. That’s how we can link capitalism with ethicalbehavior.

I think if we leave capitalism as it is today, there is the risk
not only of speculative investment, but that capitalism
might move in the direction of little or no investment at
all. One of the tasks confronting us is to use ourknowledge and expertise to develop a framework that willencourage the right kind of investment that will help tomove things in a positive direction.
 OhashiIt’s a difficult question. I said earlier that our company
orders priorities using the SLQDC abbreviation, and I
think the situation is similar for the national government.
For the government, S is the lives of the people andnational security, L represents the legal system. As part ofthat, you try to take steps to protect the environment. For
Q, the government must think about how to improve
people’s quality of life—and that includes culture. Then
there’s D, which involves executing policies in a timely
manner. And while following this order of priorities, wemust pursue C, even though keeping the economy runningis perhaps the most fundamental thing of all in terms of
running the state or governing society.
In terms of capitalism, then, of course it encompasses the
economy. But I think really it includes all of these things,
and that starts with the administrative systems of thenational government. In that sense, it’s very important to“invest in people,” as Professor Nakajima says. Today,
though, however much you invest in training youremployees and improving your workforce, it will betreated as an expense in the profit and loss columns on
your balance sheets for a single fiscal year, and that comesunder cost-cutting. I think we need to develop aframework that would make it easier for companies to beproperly evaluated and rewarded for the investments they
make in people. That would help us to invest whileremaining mindful of safety.
 Moderator Ota
On that optimistic note, perhaps to wrap things up I could
ask you for your message to the next generation. Whatwould you say to the young generation that will shape thefuture for Japan and the world?
Message for the next generation: Now is the timefor young people to open up new horizons Nakajima
I have nothing but hopes and expectations for the young
generation. If anything, my hope is that they won’t be
crushed and overwhelmed by too much expectation. I wantthem to enjoy the freedom to come up with their own
ideas. People should be allowed to think about things
freely. There are no forbidden questions. You should befree to ask anything you like. You can think whatever you
want. I hope that young people will have experiences thatwill open up new horizons. If they do, they will come tounderstand that each of them has responsibilities to otherpeople, too. And in time I think that realization will makethem happy.

9That’s why I’d like them to experience these things at as
early a stage as possible. I think as the older generation,
we need to think about how we will support this, or how
we will put in place the necessary conditions to make itpossible.
 Ohashi
I’m the same. I have great hopes for young people.
Looking back in history, in 1945 Japan was defeated in thewar, and it was relatively young people who came up withthe design for new systems of governance for running thecountry. That was when wonderful companies like Sonyand Honda got their start, and young people worked hardto turn them into successful companies.
But the systems that were put in place then are starting toshow signs of institutional fatigue. That is also a fact, I
think. People sometimes say that Japan is susceptible topressure from the outside world—that the Japanese only
get serious about things when a moment of crisis comesfrom the outside, as when Perry’s Black Ships arrived andforced people to address the country’s weaknesses in thenineteenth century. Today, we face a moment in theaftermath of the pandemic—of course, this is not the same
as losing a war, but it’s a moment of crisis and potentiallya moment for change. I think this is another of thosemoments where young people need to stand up and realizethat this is their moment. And for that to be possible, theyneed to be in touch with nature, first of all. They should
develop their sensibility and study history and philosophy
well, and then stand up and speak with their own voices onenvironmental issues and politics, and step up to takeaction in society. Start-ups are part of this, and an
important way for young people to gradually build up theirexperiences of success.
We mustn’t get in young people’s way. We tend to starttelling people, “No, that’s not right,” based on our own
successes in the past. But I think we must resist this
temptation. We mustn’t get in the way. In that sense,
perhaps our job will be to get rid of aspects of the oldsystem that have clearly become antiquated and obsolete.

Edited and published by:
The 21st Century Public Policy Institute, Keidanren-3-2Otemachi, Chiyoda-ku, Tokyo 100-8188
10

 Moderator Ota
As well as discussing the systemic aspects of thechallenges we face, you’ve both touched today on theimportance of education and training that incorporates thearts as well as the humanities and sciences. Thank you
both very much for a very rich and thought-provoking
discussion.