Reckoning

by David Halberstam

  Thus as early as 1969, Amaya started working on a report recommending that Japan switch emphasis from the old economy to the new one. He found it frightening that Japan, with its vulnerable economy, was emulating the far better supplied American one. America had the luxury of making economic mistakes; it could survive if critical sections of its economy became less and less productive. Japan lacked that luxury. In the late sixties Amaya did not think that the future oil shock would hit until some time in the early 1980s, but he wanted Japan to start making the transition as soon as possible. His report was finished in 1970 and published in 1971, some two years before the Yom Kippur War. He believed as he worked on it that the United States would be immune to the vagaries of the Middle East and the Arab changes in oil pricing that could so easily bring Japan to its knees. He regarded America as rich in domestic oil, and it did not occur to him that the economy that had been the very symbol of the oil culture could be hurt. What others had called the American century he believed was the oil century, and it had begun in America.

  The nineteenth century, which Amaya thought of as the coal century, had created a highly stratified economic and social system. In the coal culture a few owners were rich, the multitudes of workers were poor, and there was little in the way of a middle class. Workers were not consumers; at best they were survivors. The goods they produced were heavy ones like steam engines, for example, that served industry, not—as in the oil culture—mass-produced goods that directly benefited and were used by consumers. What distinguished the oil age, in Amaya’s opinion, was that the worker was also the consumer. The better he was paid, the more he consumed, and he gradually became a genuine participant in the economy, both economically and politically. The coal century was British, he believed, and it was better suited to the nature of British and European cultures with their sharp class divisions than it was to America’s more meritocratic society. The oil culture was far better suited to America because it was designed for a society that considered itself free of class restraints. If Karl Marx had written his basic works after the age of Henry Ford, Amaya believed, he would have been forced to revise much of his thinking, for he had not conceived of an industrial system so rich and powerful that it generated affluence not just for the owners but for the workers as well. That was one of the things that distinguished the oil culture, the sheer richness of what that energy let loose. It simply created vastly more wealth, a wealth so great that it could be shared by ordinary people.

  The first great figure of the oil culture, Amaya felt, was the original Henry Ford. Ford had not just designed the first mass car, but he had also pioneered in mass industrial production, and he had paid workers enough to permit them to enjoy the fruits of an economy they had once only served. Suddenly, thanks to oil, there was an explosion in the means of production. Factories now had the capacity to turn out goods on a mass scale, but these goods could not be sold unless the masses had the capacity to buy them. Amaya was always amused by the way other capitalists had turned on Henry Ford when he had decided to pay his workers the unheard-of sum of $5 a day. Yet, by so doing, Henry Ford begat his own consumers. That was revolutionary. For a long time, Amaya believed, the United States was alone in the oil culture. America’s native richness had allowed it, for example, to bring the advantages of oil to agriculture while the rest of the world still plowed with draft animals. Now Americans not only had their vast and abundant plains, but they were able to mechanize the farming of those plains. The rest of the world was still working on tiny plots that could be handled by one man while America with its mechanized implements was creating larger and larger farms and greater and greater harvests. By the 1920s, 90 percent of the world’s oil production and consumption was in the United States; the United States was leaping ahead of other nations, almost unaware of its newfound sources of power.

  World War I, Amaya believed, brought a great increase in American world power because a war-ravaged Europe, still essentially mired in the coal age, had needed vast stores of American food and materiel. One reason for the Great Depression in America, Amaya decided, was that the oil culture had come so quickly that, in the beginning, production had vastly outstripped the capacity for consumption. A new middle class was gradually evolving in America, but it was still embryonic; its limited purchasing-power was unable to keep pace with the relentless surge in productivity. Part of that surge had been taken care of during the war, when the Europeans had needed American goods, but in the postwar era, when production outpaced demand, prices collapsed and the Depression took place. That led, in turn, to Keynesian economics in America and to the New Deal. To Amaya, the rise of Franklin Roosevelt was the first substantial political result of the oil culture, the first evidence that a new mass economy had created a political system to represent itself. For Franklin Roosevelt was the candidate of the new forces. Elected largely by the working class, he became the mediator between traditional, narrower, more rigid American capitalism and the Keynesian capitalism of the oil culture. He was an old-fashioned Brahmin capitalist responding to changed political and economic realities, a man of an outmoded economic class making a deft lateral movement to embrace an ascendant class.

  Until World War II, Amaya thought, no one, least of all the Americans, had truly realized the awesome extent of American mechanical and technological power, or how far it had left other nations behind. But with the war the Japanese, more than any other people, came to appreciate the full force of American might, what the oil culture unleashing its full technological fury could do. There had been those in Japan who even at the start of the war had warned their leaders against it. A group of bright young men from the aviation industry went to see Japan’s powerful new warlords and asked not that they not go to war but that they wait twenty years or so, until Japan was better prepared. The Americans were caught asleep at Pearl Harbor, but within six months, at the Battle of Midway, they were able to demonstrate their absolute superiority as an industrial society. No one could match their ability to mass-produce planes and ships. From then on the war, in Japanese eyes, was a tale of superior American technology simply crushing the individual valor of the Japanese soldier. Like almost every Japanese of his generation, Amaya had a memory of the magnitude of American power, of the sky filled with planes, of endless tanks rolling across beaches, of ships in such numbers assaulting a Japanese shore that the ocean itself was obscured to those poor men awaiting their dismal fate.

  He was a young second private at the end of the war, in his words the lowest of the low, stationed at a small city until then relatively untouched by American bombing, Hiroshima. It was a major military staging area for the South Pacific, and Amaya was among the thousands of troops preparing to defend against the American invasion of Okinawa. Though the propaganda ministries endlessly issued bulletins of brilliant Japanese victories, there was, of course, a more cynical version of the war’s progress among returning veterans, and Amaya, like other Japanese, had not only heard the more pessimistic stories but had seen the swarms of American bombers that periodically darkened the sky over Japan. By 1945 the Americans flew at their pleasure, in daylight or darkness, virtually unopposed by defending Japanese aircraft. Just as he was about to be sent to Okinawa, which was one of the bloodiest battlegrounds of the war, the island fell. With that his regiment was moved out of Hiroshima, which, he later realized, almost surely saved his life. He was in the artillery, and the cannon that his crew serviced had been made in 1905, for the Russo-Japanese War. Although it doubtless had been of great value during those hostilities, the ensuing forty years had made it entirely obsolete. For one thing, it had to be pulled by six horses.

  A few months later, when the war ended at last, the Americans finally began to land in Japan in full force, and for the Japanese, who had endured the physical hardships of the last few years, their arrival was a staggering sight. By the time the war was over there were very few cars and trucks in Japan, and those few that existed often got around by burning wood. Here now were th
e victors, a new and separate species of man with trucks and jeeps and boats as far as the eye could see. It was astonishing, young Amaya thought, that a nation could go through a war and still have so many jeeps and trucks. What, after all, about the ones that they had lost? Had Japan and Germany made no dent at all? It was not just that the Americans retained such military force, nor was it that they had so much food in a country where no one, not even the rich, had food. It was the aura about them that struck Amaya, their absolute confidence in themselves and what they were doing, even the way they walked, as if born to rule the world. In Japan the world had collapsed, not just the war effort but something critical and basic to the essence of Japanese existence, a belief in the worthiness of Japan’s purpose. The Americans seemed to have everything and to know everything; by contrast everything that the Japanese had once believed in had been proved false. The Americans therefore were like gods to the Japanese, and Amaya, like most Japanese of his generation, was eager to learn as much as possible from this superior species. He wanted to learn their secrets, for surely a nation this powerful and this rich above all else had secrets.

  That had led him to study America and to form his vision of the oil century, which others thought of as the American century. Many historians of technology, he thought, misunderstood the nature of what often happened with a given invention. The invention was important, but it had to take root in the right society, a society with an affinity for it. The automobile was a good example. The original inventions were mostly European (the early vocabulary—automobile, garage, chauffeur—was French), but America, unlike France, for example, had a seemingly unlimited source of cheap energy and a large population that needed automobiles. It was a huge land, with great distances to traverse; it had an immensely vital entrepreneurial class that was accustomed to trying to invent new machines and methods; it had ready capital to finance new inventions; and it had a labor force with a naturally egalitarian spirit that matched the more egalitarian nature of the new order. Given its size and the size of its market, America was well suited to become the first mass-production culture. Amaya privately believed that in the postwar world the new culture of oil would demand social and political systems with considerable flex. A totalitarian society like the Soviet Union would not be able to adapt as well, but America, far more pragmatic in both political and economic systems, would be able to adjust its society quite readily to the coming new riches.

  For Amaya, America in the postwar years was like a nation living out the dreams of other, poorer nations. Everyone wanted to be like America, and it was not surprising that so many countries, Japan included, modeled their economies on the American one. The fifties and sixties, he observed, now from his vantage point at MITI, were the great flowering of the oil culture. In those years there was a flood of machines and inventions for the average American home―dishwashers, washing and drying machines for clothes, air conditioners. The Americans were even electrifying, he was astonished to learn, all sorts of unlikely kitchen tools, including can openers and knives, and, for their bathrooms, toothbrushes. Middle-class American families had two or three cars when wealthy Japanese had none. America in that moment seemed to be getting richer and richer, with more people buying more things, which meant that more people were making these things. It was, he thought, like a sun from which light and heat emanated all over the world. If there was any danger in this, Amaya decided, it was that the sources of energy were certain to diminish, the price bound to go up, even for the Americans. More than that, the Americans seemed to him to have reached the outer limits of inventing devices of use to the average citizen. Machines that opened cans and machines that polished shoes were different from heavy domestic machines like washers and dryers, they were less basic, less necessary. He began to believe that the oil culture might be entering its twilight. Still, Amaya did not ponder too long. By the early seventies he was too busy trying to get Japanese firms to shift their industrial force from energy-consuming industries to newer, less energy-dependent ones. It was not an easy process and it caused great dislocation, but gradually Japan began to pull back from aluminum and petrochemicals and to deemphasize shipping.

  That America, the land inhabited by those men who had seemed like gods, might become vulnerable did not occur to him until, in the late seventies, the second oil shock hit. With that the Japanese suddenly made far more serious inroads into the American auto market than anyone had anticipated. More than anyone realized at the time, the American economy had been floating on cheap oil, and now the era of cheap oil was over. Amaya had been surprised by the collapse of the American auto industry. He knew that the Americans were exposed in the low end of the market because the Japanese had a basic price advantage. But this was something graver. He had heard from friends of his in the auto business that the once mighty American auto industry had become sloppy about quality. At first he had not believed it. Eventually he concluded that the Americans had become too successful for their own good. Almost as soon as the second oil shock struck, in 1979, the Japanese captured an incredibly large portion of the American auto market—some 25 percent. Soon after, it became the melancholy duty of Naohiro Amaya to negotiate with the Americans an agreement limiting the export of Japanese cars to America.

  During the seventies, Amaya had come to feel that if Japanese auto imports to America stayed at 10 percent, things would be all right, but that if they went to 20 percent, there would be a major political reaction in America. Now they were at 30 percent, and America was in the grip of an industrial crisis. Clearly, though restrictions might anger the triumphant barons of Japan’s auto industry, its success now threatened its cherished political relationship with its greatest trading partner and principal military protector. Amaya believed that Japan’s economic success had outstripped its foreign policy. In one of his essays he had described how Japan after World War II had chosen to be a merchant rather than a samurai society by forfeiting a national defense. This idea enraged many of his contemporaries, who still liked to think of themselves as members of a samurai society and for whom the word “merchant” was still tainted. It could, wrote Amaya, remain a merchant society, “a rabbit in the jungle,” protected completely by the United States, but in that case it had to be extremely sensitive to its defender’s political moods. The alternative was to become a samurai nation again, which would entail a huge defense bill that could threaten much of its prosperity. He acknowledged that this was a tough decision, but Japan could not have it both ways. Restrictions were necessary.

  He did not particularly look forward to the auto negotiations. He did not mind dealing with the Americans; there was a certain fascination in that kind of challenge. But if limits were to be set, persuading the leaders of Japan’s auto industry to restrain their exports at the very moment of their greatest triumph was not going to be easy or pleasant. He was right about that; before the negotiations were over, Japanese journals and Japanese auto men were regularly calling him a whore for the Americans. Preparing for the meetings, he thought again of America. It had always been a blessed society, but, he decided somewhat ruefully, there was a danger in being too blessed. The Americans had adapted brilliantly to the new possibilities of the oil culture and to their new wealth, but he was not at all confident that they would do as well as their possibilities gradually began to diminish. The oil culture, with its easy affluence, was like an addiction. Americans had been rich for some sixty years, and several generations had become accustomed to prosperity. Affluence was ingrained in them, and their expectations were very high. They were not a people, Amaya reflected, who would readily respond to calls for new levels of personal sacrifice.

  3. DETROIT’S BLEAK WINTER OF 1982

  IT WAS THE THIRD bleak winter in a row. For many years prosperity had been viewed as a kind of birthright by most Americans, particularly those who were the beneficiaries of the auto industry. But now, in the cold early months of 1982, prosperity seemed a distant memory in Detroit and the state of Michigan, somet
hing come and then gone, perhaps irretrievably. It was now nearly three years since the day when, in the words of Lee Iacocca, Detroit’s principal phrasemaker, the Shah left town.

  The rest of the country was suffering from what was usually called a recession, but Detroit and most of the old industrial heartland of the Midwest were caught in an all-out depression. More than a quarter of a million autoworkers were unemployed, and the ripple effect of that throughout the region, in steel mills and glass and rubber factories, was immense. In thousands of Midwestern towns there was only one small factory making one tiny part for an automobile company; times were now hard for those factories and thus for those towns. In countless homes, male blue-collar workers, out of a job, watched in frustration as their wives went to work—for a quarter of what they themselves had once made at the factory—at a McDonald’s or some other adjunct of the new American service economy. Steadily the grim distress spread out from Michigan, into Ohio and Illinois and Wisconsin.