Zero Risk Tolerance

By Ichiro Suzuki

Stubborn unwillingness to accept slightest risks of any kind is one thing that characterizes the Japanese society since the late 20th century. This might have something to do with the aging of the Japanese population since older people are more risk averse. This could also be attributed to the peaking-out of the country’s economic fortune compared to the rest of the world. People want to be assured of 100% safety though such a thing does not mathematically exist. The vast majority of the population cares little about higher costs associated with lifting probabilities of safety from, for instance, 99.5 to 100%, on top of missed opportunities that come with accepting some reasonable risks.

The majority of Japanese households sticks with bank deposits in ‘management’ of their financial assets, for fear of losing a tiny fraction of the principal. The price they pay is an utter lack of upside. Japanese banks have long been paying as close to anything as nothing as interests on deposits, and the rest of the world has caught up with on near zero interests since the global financial crisis. Despite a widely-held belief, principals of bank deposits are not 100% guaranteed. In the event of a bank failure, only up to 10 million yen ($90,000) is guaranteed by deposit insurance in Japan. Depositors can have greater amount protected by spreading large deposits among two or more banks. That can be as close to anything as 100% safety, but still is not 100%.

In the 1990s amid a wave of deregulation that hit the Japanese economy, lagging the U.S. and the U.K. by a decade, then Minister of Transportation Shizuka Kamei said “Is it safe?” to a proposal made by the airline industry to allow part time employees to assume flight attendants’ duty. Of course, the industry wanted to cut labor costs. Flight attendants used to be a cushy job with an attractive package. Once a highly prestigious and financially rewarding job, it even offered flight attendants a limo pick-up to and from the airport. Predictably, they became too much a burden on the airlines at a time of intensifying competition, especially with the advent of low cost carriers (LCCs). Part-time workers as flight attendant are not really part timers. They make full time commitments to the job but only with reduced pay and benefits as opposed to full-timers. It is impossible to imagine that  part-timers abandon passengers in the event of emergency because they are paid less.

Another deregulation at that time made it possible for drivers pump gasoline into his/ her tank by themselves at gas stations, a practice that has been long in place in the U.S. and other countries. Mr. Kamei again questioned “Is it safe?” He might have been worried that some lunatic drivers spray gasoline around the self-service station. Needless to say, no such thing has ever happened. For gas station workers to pump gasoline for customers, it takes no license or anything. A high school student can do it on his/ her day 1 on the summer job. Though it is a low skill job, a deregulation proposal met with resistance because of safety concerns.

Then there was decontamination operation in Fukushima after the nuclear power plant failure. The Democratic Party of Japan, that was in power at the time of the 2011 disaster, made a commitment to decontaminate the region to the point of total elimination of radiation risks. Such operation has substantially increased contamination costs well beyond what was necessary to reduce radiation to scientifically required levels. Worse, over the years, a number of former residents in the neighboring towns to the nuclear power plant chose to not to return to live for a variety of reasons, whether decontamination is done 100% or not. Increased costs to achieve the impossible 100% is obviously failing to deliver returns to those who were supposed to be beneficiaries.  

Japan has a decades-old tradition of anti-vaccine movements, dating back to the 1970s. Distrust of immunization grew amid a number of class action lawsuits against the government. Plaintiffs won those cases though their claims were scientifically dubious. As is always the case with anything, especially with medical treatment, risks associated with vaccination is not zero. Nonetheless, they were rewarded anyway based on probably isolated cases, and such ‘victories’ set the tone for anti-vaccine movements. Law suits drove the Ministry of Health to take extra caution on vaccination and approval of new drugs. Some lawyers take pleasure in taking on the big bad government and defending people in trouble, that are essentially worthy causes. Bar Associations in Japan are strongly anti-government. Though the majority of the lawyers are far from radical, those who take leadership positions in the bar are very progressive and hawkish. 

In more recent years, the left leaning Mainichi Shimbun ran a relentless campaign against HPV vaccines. The newspapers’ reports on a handful of cases of HPV vaccine side-effects that were said to have caused rare few deaths scared young women and their mothers. HPV vaccine is scientifically proven safe and prevents cervical cancer. Amid growing anti-HPV sentiment and a long history of legal troubles, the health ministry backed off, pulling its recommendation on HPV vaccines, driving the vaccination rate from 70% to 1%. The Mainichi’s repeated unsubstantiated claims won its misinformation war, and this made the WHO furious. Today, the left-leaning media are not openly vocal about the risks associated with COVID vaccines amid a generally positive public sentiment to it. Nonetheless, they still try to stress non risk-free nature of the vaccine, making some people to think twice about getting vaccinated. Based on past legal experiences, the Health Ministry is following a process of cautious and lengthy clinical tests of COVID vaccines, not accepting the data from the countries that went ahead of Japan. Such cautiousness has contributed to the slowest vaccination rate among the wealthy countries, so far. The ministry claims the approval process is shortened on this occasion, but few take their statement at face value.

In contrast to resistance to vaccination among Trump fans in rural America, anti-vaccination movements in Japan are led by some segment of the well-educated left, including lawyers, the media and non-profit organizations. Interests of the left sometimes converge with those of old guards on the point of holding on to the status-quo and resisting changes for fear of any extra costs and losing a grip on the issue. Transportation Minister Kamei was a case in point of conservatives who desperately tries to stick with the way it has been. By advocating zero risks, the left and some old guards keep dragging the country from moving forward onto the next stage and the future. 

About author: Mr. Suzuki is a retired banking executive based in Tokyo, Japan.