One of the few remaining elegant wooden buildings in central Tokyo that survived allied bombing in the second world war is the Mitsubishi lodge. The Kaitokaku, set back from the main thoroughfares, its gardens overshadowed by skyscrapers, is a web of beautifully carved wood rooms where executives, bankers and clients who are part of the Mitsubishi keiretsu, or conglomerate network, socialise, with top officials from the phenomenally influential ministry of international trade and industry (MITI), and discuss business privately – drinking sake until three or four in the morning. Deals are done, new technologies discussed and consensus reached on what is happening geopolitically to Japan’s markets and how it should react.
The closeness of the relationship between business, finance and state is a universe apart from anything we know in Britain. Critics argue that the keiretsu represents a destructive corporatism and an obstacle to the operation of free and open markets; admirers that it allows member companies to share risks, find synergies, lower financing costs and encourage long-termism – so informing Japan’s agile industrial policy and directly leading to Japan having dozens of world-beating companies and brands. By contrast, Britain is not at the races.