Most people living in Japan can visualise the landscapes of satoyama and satoumi when they hear these terms. Satoyama and satoumi refer to places close to mountains and sea, respectively, shaped by prolonged interaction between humans and ecosystems through practices such as agriculture, forestry and fishing.

Today, some consider satoyama and satoumi to be a new stage of capitalism. Indeed, the term “satoyama capitalism” is being used to describe a new economic model that does not entail the need for large-scale investment or an extensive workforce. It is viewed as more sustainable as it introduces innovative sources of renewable energy, such as biomass, and utilises locally available technology and infrastructure. The concept has attracted a great deal of attention in Japan, particularly in rural areas significantly impacted by the country’s declining birth rate and high life expectancy, because it is seen as a viable way to foster self-sustainable local economies.

Mr Kyosuke Inoue is a producer at NHK (Japan Broadcasting Corporation). Since  joining NHK in 1987, he has worked on many TV programmes that have reported on satoyama and satoumi and he has published two books on the topic — Satoyama Capitalism and Satoumi Capital. We asked him about “satoyama capitalism”, as an alternative concept to “financial capitalism”.

In 2007, Inoue began producing NHK news commentary programmes focusing on the economy. At the time, the US was in the midst of a subprime mortgage crisis, the 2008 global financial crisis was taking shape and NHK had started producing many programmes covering economic issues. In 2009, Mr Inoue was involved in the production of the programme NHK Special: ‘Money Capitalism’.

It was rumoured that Japanese pension funds had made investments with US hedge fund management firms, but the truth remained unknown. One of Mr Inoue’s fellow producers was able to gather key information on the California Public Employees’ Retirement System (CalPERS), the largest pension fund in the US. The producer was also promised an interview with a person concerned with a pension fund in Japan. He asked Mr Inoue to conduct the interview, which motivated Mr Inoue to cover “satoyama capitalism” when he started working at the NHK Hiroshima bureau a few years later.

Saori Tanaka: What did you learn when gathering data for the NHK programme Money Capitalism?

Kyosuke Inoue:  Any major move of CalPERS in California was so influential in the world of money that people said, “A whale moved.” A fellow producer at NHK held a series of interviews with the top executives of CalPERS. On one occasion he said to me, “In Japan, I’ve only been able to find one person who is willing to grant an interview, but I will leave the interview arrangements to you.” It was more difficult in Japan than in the US to broadcast the fact that Japanese pension funds had become deeply involved in such risky investments.

I talked with the top manager of the pension fund, but since the fund managed pensions for the staff of a vegetable and fruit market, I had to interview the head of the market union as well. I expected the union head to refuse, but he accepted my interview request saying, “The value of pension funds as a whole has been reduced by 50%, but ours has not been impacted that badly. The government will not understand the severity of this situation unless someone tells the truth.” He told me how large portions of pensions in Japan had disappeared in an instant.

Pension funds expanded as rapid economic growth continued, and the trends of that period tempted CalPERS to invest in subprime mortgages. Everybody believed that the Japanese pension fund in question was the safest of all because it was run by former staff of Japan’s Social Insurance Agency, but it was actually involved in the most dangerous form of speculation.

ST: What was the largest cause of the problem?

KI: Formerly, the US government had pumped huge amounts of money into the Los Alamos National Laboratory and the Apollo space programme, and many mathematicians worked for the laboratory and the programme. As the cold war between the US and the Soviet Union ended and the budgets were reduced gradually, those mathematicians found employment on Wall Street.

John Seo, who was born to a family of mathematicians, had invented a system of financial engineering and he had also been offered a position on Wall Street. When I recently met him at a coffee shop in New York and explained to him that I believed that the world should change through satoyama and satoumi, he quickly understood, saying that is how the world is changing now.

At first, those who worked on Wall Street, including John, had tough defenses from criticism. But people probably felt like talking the day after the system collapsed. They wanted to say that the system originally started as a good one. Subprime mortgages were a system developed by financial engineers to help enable low-income earners who crossed the Rio Grande from Mexico into the US to realise their versions of the American dream. Because of such immigrants, the US economy grew, and the country’s demographic structure was kept stable.

The financial engineers thought, “If they can live in an ordinary house and lead a stable life, they will work harder and take pride in themselves as Americans.” That was how the system began, but before they knew it, the opposite of what they intended was happening.

ST: At first, the system stemmed from altruistic ideas, didn’t it?

KI: Yes, it did. That story was also put into our programme. Things went wrong around the time when the idea that “the real economy leads finance and finance supports the real economy” was reversed to become “finance leads the real economy”. That was exactly the moment when CalPERS changed. It was also the moment when the financial economy started to go in the wrong direction, generating money for money’s sake.

Finance changed from encouraging and supporting working people to tempting them with money and then making them repay the loans. Eventually, automobile companies in Detroit told their sales personnel that they did not need to come to the office and that all they needed to do was to send loan claims to their company. Loan claims were bought by banks at Wall Street. As a result, cars ceased to sell due to the financial crisis. This was because the system that enabled sales staff to sell cars, instead gave priority to granting loans.

ST: What triggered the financial crisis?

KI: If, when the world is changing, one only makes minor adjustments and fails to devise fundamental solutions, the intended outcome will likely be reversed at some point. People all knew that they were doing something wrong, but were forced to do so because everyone else was doing so. That was how I reached the concept of “satoyama capitalism”.

Fundamentally, what should we do? Since the production of the programme Money Capitalism ended, I have often thought about what we should do. But there was a limit to what I could imagine as an alternative way of living if I did so in Tokyo. When I talked with people in Noto where Evonne [Yiu] took me, I immediately understood what we should do, but I could not have reached an answer to this question easily if I had conducted phone interviews from Tokyo. Unless I hear the voice of people in the environment where they live, I often cannot fully comprehend what they say.

Evonne Yiu: Did you think about “affluence” again in places other than Tokyo?

KI: Yes, I did. Even if one generates money from money and calls it “affluence”, nothing will come out of it. Those who we interviewed for the TV programme did not even have a single 10,000 yen bill. They only exchanged money electronically. But they cannot live on electronic signals.

Money has a meaning because something can be obtained in exchange for it, but we are now in a world where people say, “I do not want goods. Give me only money.” They say that that is what affluence means. That is impossible, isn’t it? People who catch fish in the sea and eat those fish are much more affluent.

After I published the book Satoyama Capitalism I still worked in Hiroshima for awhile. The NHK Hiroshima bureau was responsible for covering Hiroshima, Okayama, Tottori, and Shimane Prefectures, and a 25-minute programme slot became vacant. Carrying a digital camera, I gathered video interviews alone for one week outside the office. I was starting to have more acquaintances due to the publication of the book and I thought I could quickly produce a 25-minute programme if I went around and visited them. One place I visited was the island Miyakejima with Satoyama Capitalism co-author Kyosuke Motani.

First, we went to a restaurant in a remodeled artist’s villa that was run by a young couple. The couple said calmly, “The island’s volcano erupts about once every 20 years. But its eruptions are amazing because they do not kill many people and we take that fact for granted. If the volcano erupts, all of us leave the island, and when we come back our lives on the island settle down just as trees and grass grow where the mountain erupted.”

The couple served us carpaccio made with fresh sea bream that a local fisherman had caught and herbs they had grown in their garden. Since this type of sea bream goes bad quickly, it is usually dried and sold in Tokyo. The couple serve it as a special dish at their restaurant because they know it is something that can only be enjoyed fresh on Miyakejima.

ST: What is the difference between “money capitalism” and “satoyama capitalism”?

KI: During the low season for tourism, people in the community continue to dine at the couple’s restaurant, therefore their business is stable throughout the year. Of course, this may be because of the lack of other restaurants in the area, and perhaps other factors. But the restaurant serves a type of sashimi that cannot be enjoyed in Tokyo, and in that respect, it is unique from restaurants in Tokyo. The young couple, who talk with local fishermen and farmers daily, clearly understand what tastes best at particular times of the year.

Some people say that sea bream are not profitable unless tens of thousands of tons of them are dried and sold, but I think the type of economy that emphasises only this kind of marketing is already over. If sea bream are sold in smaller units, it becomes possible to do something like this restaurant does. We should return to such a way of doing business. We should spread information as much as possible on those who practice this type of economy. If we do so, we can gradually shift the economy to one in which we can live even if we do not convert everything into monetary value, and the risk placed on us will soon be reduced. In fact, the costs incurred by people who have such a lifestyle are low, and fishermen provide fish saying, “You don’t need to pay now. Pay sometime later.”

If I go to rural areas to gather news, similar situations often occur. In Miyakejima, too, an old fisherman said that he had taken his grandchildren from the city to a party at that couple’s restaurant. The fisherman was still wearing his waders and the owners praised him as the “best fisherman”. Are there restaurants in Tokyo where families have a meal in the same way? Restaurants in Tokyo have fashionable interior decorations and use beautiful tableware, but they probably do not provide a space that becomes a harmonious and happy community.

In Tokyo, too, when a group of people dine at a restaurant to celebrate a birthday, the staff might dim the lights and sing “Happy Birthday” with the customers. By doing so, they produce a pseudo-community, but in places like Miyakejima there is a genuine community. I always believe that the best documentary programme is superior to the best drama programme, and that is why I became a director of documentary programmes. Imitations cannot beat the real thing, no matter how amazing they are. That was what I emphasised when I wrote Satoyama Capitalism and Satoumi Capital.

Industrial products have spread throughout the world, and we actually benefit from them, but in this process almost all products have become imitations. Around 20 to 30 years ago, bartering certainly remained a part of some economies, but it has rapidly disappeared. Nonetheless, it has gradually recovered during the past five to six years as people who live in such provincial economies have continued to say, “We are more affluent, aren’t we?”

ST: Why is people’s interest shifting to a barter economy?

KI: Even after the market was entirely dominated by financial capitalism and it failed, many people in the world are still trying to recover by making minor adjustments today. But there are a considerable number of people who think that they have had enough of financial capitalism. In Japan, in particular, since the nuclear accident in Fukushima people have started to realise that it seems questionable to assume that they can use as much energy as they like. After the Liberal Democaratic Party returned to power, however, the administration concentrated its economic policy on an orthodox one.

The book Satoyama Capitalism is being read by many businesspeople in Tokyo and Osaka, indicating that they are starting to think that pursuing economic growth alone will get them into trouble. I think they are seeking an alternative to economic growth. Through our TV programme, the term “satoyama capitalism” has been coined to describe a type of industry including agriculture, forestry, and fisheries. This term has allowed us to talk across the boundaries of industry, saying, “You are practicing satoyama capitalism, aren’t you?”

ST: How was the term “satoyama capitalism” coined?

KI: At the Hiroshima bureau I was given up to 73 minutes for a TV programme rather than the 25 minutes I had previously worked with. As we were producing a second programme, the director asked me to develop a title that would have an impact on viewers. NHK seeks programme titles that are easy for everyone to understand, but if, for example, a TV programme is listed in the programme guide with a title like “Turn regional power into everyone’s power”, nobody will watch it.

I tried to invent a term that would fit into the programme guide and sound good. I had heard the terms “satoyama” and “capitalism” but there was no word that combined the two. Therefore, I replaced the “money” in “money capitalism” with “satoyama” to coin the term “satoyama capitalism”.

ST: Did you also invent the term “money capitalism” by yourself?

KI: A team of producers in charge of the TV programme wondered whether the term “money capitalism” had been used before, and concluded that they might use it although the term didn’t exist. The addition of the word “money” alone clarified the meaning of the word “capitalism” and in 1998, much earlier than our programme, an NHK director used the word “money” in his programme title to refer to electronic commerce. At that time, the Asian financial crisis had just occurred in Thailand, and the Russian economy was also affected. Furthermore, in the US, the huge hedge fund management firm Long-Term Capital Management (LCTM) had failed. LCTM had made free use of the world’s highest level of financial engineering created by Myron Scholes and Robert Merton, who shared the 1997 Nobel Prize in Economics.

We started to use the term “money capitalism” in programming after the collapse of Lehman Brothers in 2008. Capitalistic problems have slightly wider meanings, but there seemed to be a belief that a different form of capitalism was expanding rapidly. Unlike the term “bubble”, “money capitalism” was a convenient term that could be used even in the midst of its expansion.

EY: The United Nations University is also conducting studies of satoyama and satoumi. Can you offer some advice on how to convey these concepts in Japan and abroad?

KI: Even Japanese people do not always acknowledge satoyama and satoumi. I have gathered information on various subjects, including economy, but what I’ve found in the process is that Japanese people often buy Japanese products that are exported overseas first and then reimported into Japan. For example, Japanese cars that have been exported to other countries and reimported into Japan sell well.

Both satoyama and satoumi have begun to be known outside of Japan. We are striving to spread both concepts in English first. The United Nations University is helping communicate these concepts, and that in itself is a strength. When Japanese people see researchers like yourself (Evonne Yiu) from Singapore having a meal surrounded by Japanese fishermen, they start to look at the fishermen in a different way. They think that there is something good in satoyama and satoumi if foreign researchers praise them so much. That is a similar “reverse import” effect.