Japan is the only major non-Christian, non-white country that has managed to insert itself into the rich states' club of this century. For the first half, it was expansionist and aggressive, mainly towards China and Korea - though its victory over the Russian navy in 1905 was the first solid reason the Japanese had for regarding themselves as a potential great power, able to challenge the likes of Britain, France, Germany and the US. By the 1930s, the bolder nationalists among its military elite had identified the US as the nation to beat, or at least to damage, in war sufficiently for it to sue for peace and grant Japanese hegemony over South-east Asia and much of the Pacific. Why not? It had come even later on the imperial scene than Germany, and had to make up for lost time.
The second half of the century has been spent recovering from the disastrous consequences of underestimating the combined forces of the US and Britain - and in finding that trade and growth are fitting substitutes for war in the hunt for national status. Japan discovered that its national traditions and institutions - many of them spring from the Meiji period, after 1868, when the country quite suddenly opened up after centuries of repelling all foreigners - could be adapted to a style of capitalist development that produced more rapid growth than anywhere else in the world. This enabled Japan to create, from the 1960s, an economy that was held up as a model to the advanced countries it was still in the process of imitating.
For much of the latter half of the century, Japan has been making us anxious: anxious about its success in making increasingly sophisticated commodities, anxious about its splurge of foreign investment since the 1970s, anxious about the apparently natural discipline of its citizens/ workers and the apparently effortless control exerted by its ruling bureaucrats. "How do they do it?" has been our cry for more than two decades. Enthusiasts for the Japanese way, from the Harvard professor Ezra Vogel in his 1970s Japan as Number One to the British journalist Will Hutton in his 1990s The State We're In, have stressed the consensual, interventionist, market-modifying, employment-creating characteristics of Japanese industry and called for their emulation over here.
Undramatically - this is not a book with large writerly ambitions - Kenneth Henshall gives us some answers to the question. Obedience seems to have been a centuries old virtue, cultivated - indeed, enforced - from medieval times in the interests of social harmony. While the Japanese ruling classes, Buddhist or Shinto in their religious affiliation, were only a little more inventive in the torture they visited on their subjects than the European Christians, they seem to have been even more keen to ensure that everyone knew their place and stayed in it. Punishments were as often collective as individual, deliberately putting a premium on the community exerting discipline on its potentially unruly members to save everybody's skin.
Distrust of foreigners was a feature of the Tokugawa period, from the early 17th to the mid-19th centuries; but as soon as the country was opened up, the Japanese learnt eagerly from foreigners even as they kept them at bay. Guided industrial development was a feature of the Meiji period, as successive imperial administrations pushed and tempted the large trading houses and new engineering corporations to specialise in this or that production.
Underlying all this is a philosophy that is, by western standards, as insouciant about a "higher" morality as it is careful about a social one. From the early myths about the state's foundations to the contemporary refusal of politicians and others to show public remorse over the more horrific crimes committed in the second world war, an avoidance of moral judgement is a common thread. "Certain acts," observes Henshall, "bring censure and punishment, but no moral sermonising . . . Behaviour is accepted or rejected depending on the situation, not according to any obvious set of principles." The pure pragmatism of the Japanese was admirably suited to a capitalism that was neither dogmatically interventionist nor dogmatically free-marketeer, but simply attuned to what worked.
In the past few years, however, it has not worked: the question now is not "how do they do it?" but "can they get out of it?". Japan's success made it into a pillar of growth and stability in South-east Asia, but its economy is now weighed down by vast debts run up in the 1980s, when it was expanding as if it had ambitions to satisfy the whole world's demand for cars and electronic goods. This has depressed the entire region, made investors nervous and placed all of the burden of keeping the world from slipping into recession on the US and, to a lesser extent, western Europe.
The virtues have suddenly turned into vices - or have been shown to be hollow. The frantic investment was not just overdone and carelessly contracted, it was also undertaken at the expense of living standards. The "consensual and co-operative" attitudes often led to collusion with corruption, or at least with practices that concealed problems and suppressed any public airing of mistakes. Japanese "long-termism" depended on shareholders making no fuss, whatever managements did. Lifetime employment was limited to the third of the workforce who had jobs with big companies. The tiny unemployment figures would have been much higher had the jobless been counted as they are in other advanced countries. The political system had a job to do in the 1990s to sort the mess out, but years of weakness, corruption and taking the bureaucrats' word for it have left the ruling Liberal Democrats incapable of summoning up the will to do so.
This is the first history of Japan to be written since its economic downturn. Henshall is not very enlightening on this period, except for his observation that the fall was "perhaps fortunate" - it broke not just a financial bubble but a dangerously nationalistic and arrogant sense in the ruling class that they could do no wrong. That, to be sure, has gone: leading figures in industry and finance are now calling for a rapid dismantling of many of the institutions and practices we have come to think of as "typically Japanese" in favour of Anglo-Saxon attitudes, which are seen as more in tune with today's disconnected world. Japan, it seems, has retained the capacity to reinvent itself; it would not be surprising to see it, in the next decade or so, playing the Anglo-Saxon game better than we do, while claiming it as part of its own tradition.