Noah Smith is a Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion. Read more opinion SHARE THIS ARTICLE Share Tweet Post Email

Photographer: Alain Buu/Gamma-Rapho/Getty Images Photographer: Alain Buu/Gamma-Rapho/Getty Images

Most people who follow news from Japan will be paying attention to the economy, or possibly to the fist-fight that broke out in the Diet over security policy. But there was a huge and very worrying change in Japanese education policy that somehow hasn't received much public notice.

Essentially, Japan’s government just ordered all of the country’s public universities to end education in the social sciences, the humanities and law.

The order, issued in the form of a letter from Hakubun Shimomura, Minister of Education, Culture, Sports, Science and Technology, is non-binding. The country’s two top public universities have refused to comply. But dozens of public schools are doing as the government has urged. At most of these universities, there will be no more economics majors, no more law students, no more literature or sociology or political science students. It’s a stunning, dramatic shift, and it deserves more attention than it’s receiving.

It is also a very bad sign for Japan, for a number of reasons.

First of all, eliminating social science could signal a return to a failing and outdated industrial policy. Many observers interpret the change as an economic policy, intended to move the Japanese populace toward engineering and other technical skills and away from fuzzy disciplines. But if this is indeed the aim, it’s a terrible direction for Japan to be going.

Japan’s rapid catch-up growth in the 1960s and 1970s was based on manufacturing industries. This is common for developing countries. But when countries get rich, they typically shift toward service industries. Finance, consulting, insurance, marketing and other service industries don’t produce material goods, but they help organize the patterns of production more efficiently -- something Japan desperately needs. Since it's a country with a shrinking population, it can only grow by increasing productivity.

But Japanese productivity has grown very slowly since the early 1990s, and has fallen far behind that of the U.S. If Japan is going to turn this situation around, it will need more than a workforce of skilled engineers. It will need managers who can communicate with those engineers and with each other. It will need conceptual thinkers who can formulate business plans and strategic vision. It will need marketers who can establish and increase Japanese brand recognition. It will need financiers who can channel savings away from old, fading industries and toward productive new ones. It will need lawyers to sort out intellectual property cases and help businesses navigate international legal systems. It will need consultants to evaluate the operations of unprofitable, stagnant companies and help those companies become profitable again.

In other words, it will need a bunch of social science and humanities students.

So the education change is a big step backward economically. But what it signals about Japanese politics and the policy-making process might be even more worrying.

There may or may not be political reasons for the change. Japan’s humanities departments, like those in the U.S., lean heavily to the political left, and Japan’s conservative administration is in the process of reorienting security policy. More darkly, the change might be part of a wider attempt by social conservatives -- Abe’s main power bloc -- to move the country in a more illiberal direction by stifling dissent and discussion.

But the main takeaway is that Japan’s policy-making process is arbitrary and dysfunctional. According to Takuya Nakaizumi, an economics professor at Kanto Gakuin University, the changes were probably written not by Minister Shimomura himself, but by more junior members of the Ministry of Education, Culture, Sports, Science and Technology. If that is true, it means that sweeping policy changes, which will affect the entire economic and social structure of the nation, are being made by junior officials via an unaccountable and opaque process.

Nakaizumi also suggested to me that the changes might have been made by the Ministry of Education, Culture, Sports, Science and Technology, without consulting the Ministry of Finance (MOF) or the Ministry of Economy, Trade and Industry (METI). If so, that is even more worrying. METI and MOF understand the need for Japan to build a robust service-sector economy. But if they didn’t sign off on the education debacle, it means that policy that undermines their goals is being made right under their noses.

That would be very bad news for Japan, since it indicates a confused and disorganized policy-making apparatus. The sudden, sweeping nature of the reform, and the fact that it came from the ministries rather than the legislature, also highlights the woeful lack of checks and balances in the Japanese system. It takes large, expensive popular movements to undo the bad policies made by unaccountable officials in back rooms. Such a movement is already coalescing to fight the education policy changes. But even if that effort succeeds, the policy changes will have created great risk, cost and disruption.

Japan needs to keep educating students in the social sciences and humanities. It needs to avoid a doomed attempt to return to a developing-country model of growth. It needs a more robust, less arbitrary, more transparent policy-making regime. Minister Shimomura’s diktat bodes ill for all of these things.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:

Noah Smith at nsmith150@bloomberg.net

To contact the editor responsible for this story:

James Greiff at jgreiff@bloomberg.net