Back to Contents of Issue: February 2000

Whatever became of the Japanese trading company?

by Steven Herman

February 1, 2000

The fifth grade class of the American School in Japan disembarks from their electric bus in front of the MMM Museum in Tokyo's once-bustling Marunouchi district. The 48 students chat noisily as their teacher, Ms. Sakata, leads the way through the polished brass doors, which part automatically.

"Make sure your Walkmans are turned on for all media," shouts Ms. Sakata, reminding the students to switch on the devices to record video and audio, and the infrared data that streams from exhibits in all museums.

"Well, it beats sitting at desks punching up edu-vids all day," says Johan to his classmate, Satoru. Satoru nods and then freezes as a hush envelopes the group. "Look at him," Satoru whispers to Johan. "He must be 100 years old." The elderly man they are regarding may look frail, but his hearing is keen, thanks to an inner-ear transplant.

"Actually 107," he says in the heavily accented English of those who learned the international language in the days before the abolition of the Education Ministry. Ms. Sakata walks up beside the man and gently takes his arm. "Class, this is Mr. Sato, he is the curator of this museum and the last and only employee of MMM."

Mr. Sato nods, brushes imaginary dust from his decades-out-of-fashion wool business suit and clears his throat. "That is correct, class," he says. "This museum is something I conceived after the final merger of Japan's three greatest trading companies -- Mitsui, Mitsubishi, and Marubeni -- when I retired as president of one of those companies." Mr. Sato and Ms. Sakata guide the class past the hologram exhibits tracing the lineage and proudest moments of the trading companies, from silk exporting to the creation of the now defunct J. League baseball league.

At the end of the tour the students file into an auditorium and Ms. Sakata asks students to beam their questions to Mr. Sato via the room's wireless LAN. Mr. Sato taps a button on a console and the questions are displayed on a 90-inch flat plasma screen behind him:

"Why did the trading companies disappear?"

"The turning point actually came in the very last year of the 20th century, the year 2000. That's when we in Japan finally decided to invest heavily in the Internet and e-commerce. I should explain that back then we still made a distinction between traditional commerce and electronic commerce. Well, we made a fatal mistake. We created separate divisions for our online businesses. We didn't reinvent our core businesses to be devoted to online. Within a few years, upstarts and traditional companies not directly tied to the fates of the trading companies, such as Sony, Citibank-DKB, and Toyota, had taken over all of our core businesses and services. So we merged until there was only one trading company left -- MMM."

The students write furiously (in either Japanese or English) on their pads and a new top question emerges on the screen. "Yes, that's true," says Mr. Sato, looking back at the screen to grab the next question. "We did have tremendous funds and political clout. Yes, that's a good question -- How come we couldn't use our immense reserves and influence to survive by buying out our competitors?" Ms. Sakata takes a place next to Mr. Sato again and addresses the class.

"I must say, students, that Mr. Sato, according to his biography which you can read on the bus when we head back to campus, tried valiantly to morph the trading companies, but the traditional forces conspired against him."

Mr. Sato lowers his head and speaks a bit softer. "Students, money and power didn't mean as much by then. Society had changed and we didn't realize it. Companies refused our buy-out offers. Of course politicians and bureaucrats did anything we told them, because they needed us for jobs after they left government. But we didn't know what was best for us, really. Most of my peers were isolationists. We thought Japan was an island that had to be protected from the alien free-trade system. It was, frankly, overly corrupt and incestuous for a late-20th- century industrialized nation."

Satoru nudges Johan and says, "Do you believe the kind of idiots that ran this country before Joi Ito became prime minister?" Johan rolls his eyes. "Nope. My dad says it wasn't until the yen climbed to 300 to the dollar before they really realized something was wrong."

The Q&A session ends. Mr. Sato escorts them to the brass doors and waves as they board their bus. He takes a silk hanky from his breast pocket and polishes away a speck of dirt from the entrance plaque which reads, "MMM Museum -- An Educational Foundation of Hikari Tsushin."

Steve Herman is a veteran broadcast journalist in Asia and chairman of the Foreign Press in Japan.

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