Japan's Tourist Capital


Justin Aukema

In recent decades Japanese tourism has been booming. The number of tourists to Japan has steadily increased, reaching astounding numbers. The Covid era saw a slump in tourism, but this has basically rebounded now to pre-Covid days. Meanwhile, average Japanese have taken this stoically. Some mass media has pointed out how there is a love-hate relationship with tourism among average people in Japan. Hate for the massive overcrowding and overconcentration of tourist destinations, often to the point that they impede residents' regular day-to-day business. And love for the tourist dollars. Or, the supposed tourist dollars anyway. Because, after all, does tourism really help the economy? The common assumption in Japan anyway is obviously yes. But this is a highly superficial understanding. In this essay I argue A. tourism is a terrible organizing principle for an economy and society and B. tourism doesn’t help the “economy” as much as people think.

Now, it should be mentioned that there are legitimate reasons for why many Japanese have positive views of tourism. The main reason is the decay and aging of Japanese rural society. With crumbling infrastructure and rapidly dwindling population, many Japanese rural areas have naturally turned to what seems like the only remaining avenue available to them: attracting foreign tourist dollars. On top of this there is nothing inherently wrong with tourism as an activity in my view. Everyone is a tourist at some point. Tourism can be downright fun. But what I’m arguing is that it’s not wise to make tourism your top attraction and revenue source. Let’s examine why.

Tourism indices

First, here’s a list of the top ten countries with the highest percentage of GDP coming from tourism. I’ve also added overall GDP size, GDP per capita, GNI per capita, and Gini coefficient for each country. For reference, data from the US and Japan are at the bottom.

What stands out from this chart? Perhaps the most noticeable thing is that countries relying most on tourism generally have overall small economy sizes in GDP terms. Similarly, aside from Macau, tourism-reliant countries also tend to have lower per capita GDP and GNI as well. In stark contrast to this, the United States, which has the largest GDP and GNI in all indicators, also receives only 2% of its overall GDP from tourism. Japan, with the third (now fourth) largest GDP, takes 6.2% from tourism, which is lower than the top ten, but three times that of the US. But what about inequality? Is there a relation to tourism? The numbers here are somewhat inconclusive. If we take the median from the seven available data sets of the top ten tourist-reliant countries we get about 40%. This is still slightly lower than the US which is a rich but unequal country. But it’s much higher than Japan, Sweden, and France, for example. So, tentatively then, we can say that more tourist-reliant countries, especially those that are not naturally rich or have high GDP in the first place, tend to be more unequal.

Based on this data alone then, which by the way is all publicly available and easily apparent even to a layperson like myself, we can already partly confirm parts of my overall argument. Namely, tourism is not a great way to strengthen an economy (GDP); it doesn’t lead to overall riches (GNI); and it may even exacerbate inequality (Gini). Next, let’s turn to some other reasons why tourism is not a good organizing principle for society. This relates partly to the nature of “economy.”

What is economy?

“Economy” comes from the Greek “oikonomia” meaning roughly “household management.” The key point is that we can think of the economic “unit” be it a nation or a region etc roughly as a single household with its distinct production and consumption needs. Incidentally, similar concepts exist in other cultures. In Japanese, the origin of keizai (economy) is kei se sai min 経世済民 meaning roughly “rule the realm and assist the people.” This is a bit more of a top-down notion of a “household” but nevertheless there is still the contained unit of “realm” with the ruler, like the head of a household, managing issues of production and consumption.

The point I want to simply emphasize is that production and consumption (economy) not only takes place within a contained “family” unit but also serves as one of the actual material basis for the very construction and reproduction of this unit itself. That is to say, production and consumption take place within this contained unit, not outside of it; and that it is precisely because of this that it is a “family” in the first place. To rephrase, the idea of a “family” is only tenable because of the unit’s shared production and consumption needs, which are met entirely within that contained sphere.

Tourist capital

But what happens within modern capitalist nations based on wage labor, production for profit, and a global system of nation-states? I will highlight simply two main things. First, there is a breakdown between production for actual need and production simply for profit and capital accumulation. In other words, production occurs for profit and not based on real need per se. Second, wage labor causes a breakdown in the metabolic composition, or the cohesive bonds, that once held society (man-man) together. This is the basic reason for the loss of traditional communal bonds, and so-called social anomie or alienation in society.

Where does tourism (as a capitalist commodity) fit into this? Well, it partly relates to A. trade and B. what tourism is. Firstly, international capitalist trade, like capitalist production, is not designed to meet the actual needs of producers but rather only their vicarious needs through the payment of wages. The actual purpose of production is capitalist profit and accumulation. The fact that export goods are never intended for local consumption thus illustrates the social alienation inherent in capitalist production. But on a deeper level and in the context of the above discussion, it furthers the breakdown of the fundamental material and cohesive bonds of the very national or family unit itself.

This is important because tourism itself is an intangible export. It is based on the service work and material resources or in situ places and practices of the host country. But the entire product is bought and consumed “abroad” in return for foreign currency. The question then becomes whether the value of this foreign currency is reflective of the actual value of the goods and services produced. This is a complex issue because of geopolitics and other factors. But put simply it is fair to assume that, logically speaking, no trade can ever be a win-win situation, but that there is always one side which profits more. And in capitalist economy, the direct producers are always robbed of a large portion of the actual value.

Furthermore, we must not simply see capitalist tourism as a movement from local producers to foreign consumers. This is because while capitalism allows free flows of capital, it does not allow free flows of labor. Instead, capital is used to purchase labor where it is cheapest, and then this labor is geographically bound through the nation-state and its laws. Put simply and in the context of tourism, this means, for instance, that most hotel chains and tourist operators, i.e. the capitalist owners of the means of production, are themselves foreign capital which exploits domestic labor and resources. In this sense, there is no equal exchange of goods since there is no basis for it in the first place. Instead, it is a one-way flow of labor and goods out of the host nation and toward international capital. Thus tourism, from this perspective too, is often a boon and not a boost to the strength of a domestic economy.

Now, what about the societal effects? I said that tourism is a poor organizing principle for society. And I contextualized this in the meaning of “economy” as household or familial management. So, putting these ideas together, we can say that tourism drastically changes, and ultimately destroys, the bonds of the very economic unit itself. Why is this the case? Put simply, it relates to the aforementioned fundamental contradiction of capitalism, which is that it produces for profit and not actual need. It is not possible for local residents to live simply from the production of trinkets or on neatly-made hotel bed sheets. This is because A. they meet no actual local need and B. the method for the vicarious meeting of needs in capitalist economy, i.e. money i.e. wages, is, owing to the aforementioned unequal structure, not enough to fully compensate for those needs. The solution of capitalist tourism to this dilemma therefore is to replace or to relocate the original inhabitants of a locality either spatially or temporally. This means that mom and pop shops producing originally domestically consumed goods or services will be pushed out, and those catering to the foreign market, will take over. Moreover, owing to fierce competition, the latter usually tends to be dominated by large corporations in the long run. In terms of societal makeup, this means that generational continuity of residents and their very own reproduction tends to suffer and decay.

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