Because of a culture that eschews confrontation, the “Gentleman’s Agreement” has always been popular tool of business in Japan, both at company and government level.
Defined as an informal understanding between two or more parties, such agreements do have some advantages, most notably a reliance on mutual goodwill rather than complex legalistic knot-tying. Also, in addition to economizing on legal bills, it has PR advantages. Adverse publicity can be easily minimized, and the agreement can be denied if need be due to an absence of official records.
Despsite this level of secrecy, over the years, many Gentlemen’s Agreements have come to light. One of the earliest was the 1894 agreement between Japan’s imperial government and foreign freemason lodges operating in Japan. Rather than banning Japanese people from becoming freemasons, an act that might have looked like the criminalization of expatriate associations, the Imperial government managed to persuade the lodges to informally promise not to recruit Japanese members. This effectively turned them into purely ex-pat clubs, without bothering to officially inform normal Japanese people.
Some years later, in 1907, the American government looked set to ban immigration from Japan. This move that would have hurt Japan’s prestige as a “pseudo-Western” country by placing it on the same level as China, a country whose citizens had been banned from settling in America in 1885. Under these circumstances, the Japanese government was quick to reach another behind-closed-doors Gentlemen’s Agreement. Instead of the US government clamping down, the Japanese government did the anti-immigration lobby’s work for it, secretly ending the issuing of passports to Japanese citizens intending to work or study in the continental United States.
While potentially confrontational issues were thus avoided, the cost was that those not in the know were penalized. We will never know how many Japanese wasted their time trying to join the freemasons after 1894 or applying for a passport to go to America after 1907. Another casualty was democracy itself. When a government operates in secrecy in this way, it effectively removes the power of the electorate to vet and vote on the actions of the leaders.
Also, because of the fuzziness surrounding such agreements, there is always room for disagreement to arise. In 2005, the Chinese ambassador Wang Yi complained that Prime Minister Junichiro Koizumi had violated yet another of the Japanese government’s Gentlemen’s Agreements, regarding the controversial Yasukuni Shrine that honors Japan’s war dead, as well as 14 top war criminals. Japan had reportedly agreed that its PMs would avoid visiting the shrine in return for an end to Chinese criticism of pilgrimages by lesser-ranking figures.
By avoiding clear statements of policy, responsibility, and obligation, Gentlemen’s Agreements ultimately weaken public trust and help fuel an international reputation for unreliability and duplicity. But how much more corrosive in areas like business and the media!
In business, Gentlemen’s Agreements normally takes the form of cartels between companies competing in the same market but secretly colluding to maintain stable market share and profit margin, with the result that the customer receives a poorer product at a higher price. There is also the phenomenon of keiretsu, a set of supposedly separate companies with interlocking business relationships, interests, and shareholdings, which act like giant corporations and use their combined economic muscle to stymie the free market and any competition.
In his 1982 book, “MITI and the Japanese Miracle,” Chalmers Johnson the founder of the Japan Policy Research Institute, called the cartel “the characteristic institution of Japanese capitalism.”
While some analysts believe that these unacknowledged structures create economic stability and prevent hostile foreign takeovers, the existence of informal, under-the-table business connections on this scale creates vast scope for political corruption and extortion by criminal sokaiya groups, yakuza-backed shareholders who threaten to cause embarrassment and raise awkward question at annual meetings.
The large areas of ambiguity created by informal business collusion and unacknowledged links, gives politicians and sokaiya all the leverage they need to blackmail companies into making “political contributions” or pay-offs. Also, because the "gentlemen" from the different firms or divisions of the keiretsu need conducive surroundings outside the formal office to make their agreements, this also feeds Japan's hostess industry with the connected twilight world of prostitution.
One reason for this continuation of deep-seated sleaze is the interpenetration of Japanese businesses, including the media, who are therefore reluctant to tackle the problem in the root and branch way necessary to make real progress.
In their 1996 book “Media and Politics in Japan,” Susan Pharr and Ellis Krauss mention the media’s response to the 1991 Sagawa Kyubin scandal. This involved executives of a major delivery company with links to yakuza groups paying billion yen bribes to politicians.
“Despite rumors and leaks, and the fact that a list of politicians who had received money had circulated among journalists for several months, there was a ‘gentleman’s agreement’ among the major media not to report anything until it could be confirmed by the prosecutor’s office,” Pharr and Kraus write.While such reticence may seem laudable to some, a pugnacious and confrontational media is the last hope in a country where the political, business, and criminal classes share common interests.
Unfortunately, more often than not, Japan’s media is just the tame adjunct of its business class. The interpenetration of business, government, and the media, along with cultural imperatives to avoid confrontation, will continue to keep sleaze, corruption, and cronyism alive in Japan. A country that is full of “gentlemen’s agreements” is a country with very few real gentlemen.
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