Category: Notes

As I embarked upon an 18 hour journey to Tokyo, it dawned on me that I knew very little about the country I was travelling to. My knowledge extended little beyond the contents of the popular YouTube video “history of japan” by Bill Wurtz. The obligatory Claude query for an overview of Japanese history failed to capture by attention. Although the Meiji restoration was fairly interesting, I was soon distracted by a Wodehouse book I had brought for the journey. I arrived in Tokyo largely uninformed. After a few days in the country, it is clear that I had taken the wrong approach. What was remarkable about Japan was not its history, but how distinct it remains today from the rest of the west.

Despite being less economically wealthy than Western Europe, Japan feels more developed. This was probably the most striking takeaway from my time in Japan. On per capita PPP adjusted terms, the Japanese economy is roughly 15-20% smaller than Germany, France and the UK. The direction of this fact, let alone the magnitude, still feels downright wrong. Although economic output cannot be measured by eye, the day to day impression of being in Japan felt much more like being in Switzerland than it did Spain.

Infrastructure to be jealous of. The Shinkansen, which opened as the world’s first dedicated high-speed rail line in 1964, remains the jewel of the Japanese infrastructure system. Although the speed of the trains was astonishing, more remarkable was the regularity of the service meaning passengers could simply turn up to the station and book a ticket for the next departure. Beyond this, a system of half-privatisation and regionalisation delivered trains, trams, buses and ferries that ran on time, at reasonable prices with excellent geographical coverage. Timeliness of transport systems was clearly of paramount importance, conductors would rush to ensure that passengers boarded trains quickly as not to delay the service and we received apologies for a five minute delay to a flight we took from Matsuyama to Tokyo – a delay that likely would have gone unacknowledged on the departure boards in Europe.

An enviable level of civic sense and respect. What is instantly noticeable to visitors is how clean Japan is. It was incredibly rare to see litter on road. It is telling, perhaps, that I only spotted litter in the tourist districts of Tokyo, such as Shinjuku and Asakusa, where authorities are now implementing littering fines. Japanese people left train carriages to take phone calls and transport was devoid of the sound of coughing or sneezing. Train conductors would bow upon entering a carriage, and most (although not all) would bow upon exiting despite all the passengers facing away from them. Service staff working in low paying jobs in a country which hasn’t seen real wage growth for decades were enthusiastic and helpful, and were treated with respect. The level to which Japanese people would sacrifice self-interested convenience was remarkable.

Despite this, American influences are clear. Japan is clearly a consumerist society. Most large train stations have a shopping mall attached, with extensive food and fashion outlets to choose from. There is also an obsession with “stuff”, exemplified by crane game stores, Gashapon (capsule toy) shops and perhaps most effectively by Don Quijote (aka Donki), a retail chain that sells almost anything one can imagine, from rice cookers to party costumes, under one roof. Marketing and advertising are prevalent in cities, and brands rein supreme – apart from California, I haven’t been anywhere where Starbucks is so popular.

Keeping calm and carrying on. If I had to choose a highlight of my trip to Japan, it was visiting the Peace Memorial Park and Museum in Hiroshima. The museum exhibition was incredibly moving – hardly a word was spoken by the visitors, a mix of both Japanese and foreigners, in the exhibition. Interestingly, I felt that the tone of exhibition was as much focussed on avoiding further atrocities as detailing the suffering by the bombing of Hiroshima. This was representative of the Japanese attitude to adversity. I am told this is a result of Confucian ideas and the regular natural disasters Japan must overcome.

Palpable demographic decline. There were many signs of the demographic shift Japan is facing. It was not uncommon to see swathes of old people, often on tours designed to keep them entertained, whilst it was rare to see families with multiple children. I passed multiple schools which looked to have been closed for years, likely lacking the number of children required to make them viable.

There is clearly a less happy side to Japan. Many services in Japan were set up to cater to people on their own. The ramen chain, Ichiran, let customers dine in small booths with next to no interaction with service staff. Most elevators had four floor selection panels in each corner of the elevator so that people could avoid having to ask others to select a floor on their behalf. It made me question whether the proliferation of automation in Japan was purely motivated by the dwindling population. Services like 24 hour convenience stores and a culture in which people don’t want to burden others mean that people could live a life completely withdrawn from society. In fact there is a term for people who live this way in Japan – hikomori.

My trip to Japan took me to two of the country’s four main islands and just seven of the forty-seven prefectures. With such a relatively small glimpse, it was clear to me that Japan was like no other country I had visited. It remains an extremely organised society that continues to innovate, produce world class businesses and academic research, and plays an important role in the global economy and foreign policy landscape. The country undoubtedly faces challenges, most notably demographic decline. If Japan can protect what makes it special whilst dealing with these challenges, it will be nothing short of a second miracle.

My undergraduate dissertation had the ever catchy title An Investigation into the Effects of Passive Investing on Equity Market Efficiency. I won’t bore you with the results; I certainly won’t bore you with the methods by which I went about getting them.¹ Instead, I thought it may be interesting to think about the applications of efficient market theory to non-financial markets.

I had the idea of writing this post when scrolling through Bridge of Highs, an anonymous online submissions page for Johnians where they can share thoughts on a variety of topics. This may range from complaints about rent prices to discussions about classist ent themes (as was the case for an après-ski themed ent). A few recent posts complained about how busy the John’s bar has become on a Friday with a sudden influx of guests from other colleges – a phenomenon which has inspired a campaign coined Jexit. A rather witty comment by a friend wrote “Bar is good on Friday? I’m bringing all of my friends next week”. The comment, deservingly in my opinion, received 20 likes. Although I can appreciate how funny this comment is, my first thought was that this was a brilliant case of how markets deal with information. Unfortunately I didn’t attend the subsequent Friday bar to see how the information was incorporated into market outcomes but I suspect it improved efficiency.

If all this jargon about markets, information and efficiency is confusing, let me explain. In 1970, Eugene Fama, who many consider to be the world’s most influential finance professor, published a paper on efficient capital markets. The paper defines an efficient market as one in which “prices at any time fully reflect all available information”. Consider the stock price of Apple for example. If some information becomes available that the new iPhone is incredibly popular, market participants (in this context, equities traders) will buy the Apple stock. The price of the stock will thereby rise and then new information about the new iPhone’s popularity is now incorporated into the price. The price, therefore, captures all sorts of information about Apple and its stock. Eugene Fama essentially formalised this idea and provided ways of testing for it in capital markets like stock markets, bond markets and derivatives markets. But Fama’s idea doesn’t have to be restricted to such contexts, it can even be applied to the market for cheap booze at St John’s College bar on a Friday night as I alluded to in my exposition.

Fama focussed on prices being a signal for information. In asset markets, changes in demand and supply are almost instantaneously incorporated into prices. This is especially the case for liquid assets with lots of trading volumes, like the case of the Apple stock. However, this isn’t the case for many market. For example, the price of a double G&T at John’s bar has been £4.50 for as long as I can remember – this won’t change on a certain day just because the bar is especially busy. Therefore, focussing on prices in such a market is inappropriate; we must find another measure of efficiency.

I can think of lots of information signals in markets beyond prices: boards displaying the number of available parking spots at a car park, signs estimating the queuing time for a ride at Disney Land and even the Google feature that states how busy a certain venue is at a certain time. In the absence of (flexible) prices, the market has devised its own way of passing information to buyers. But how do we build in the idea of efficiency?

Well classical market efficiency is about how prices adjust to reflect available information. Maybe in such contexts with fixed prices, we may consider how supply and demand adjust (in the absence of a price adjustments) to incorporate new information. Will Google displaying that a certain coffee shop is very busy at a certain time deter customers from going when it’s busy? It probably will, and those who are more averse to long queues and busy spaces are more likely to be deterred than others, thereby improving welfare in the market.

We live in an increasingly information driven world and there has been a recent drive for information to be disseminated to and utilised by the masses. Think about the rising popularity if Polymarket, a cryptocurrency based prediction market that values the incorporation of market participants beliefs into placing odds on events. More widely, think about the current actions of Elon Musk with DOGE, arguing for more transparency over government spending. A recent project by my favourite political magazine, the Spectator Project against Frivolous Funding (or SPAFF) attempts to do the same thing for Britain. Efficient market theory probably remains the most developed framework for thinking about information and I suspect its applications extend beyond just the financial markets.

1. For those interested, my dissertation is available here. ↩︎

“The people expected it of me and I had got to do it; I could feel their two thousand wills pressing me forward, irresistibly. And it was at this moment, as I stood there with the rifle in my hands, that I first grasped the hollowness, the futility of the white man’s dominion in the East. Here was I, the white man with his gun, standing in front of the unarmed native crowd – seemingly the leading actor of the piece; but in reality I was only an absurd puppet pushed to and fro by the will of those yellow faces behind. I perceived in this moment that when the white man turns tyrant it is his own freedom that he destroys.”

You may recognise this passage from George Orwell’s 1936 essay, Shooting an Elephant. The essay, despite being only 3000 words in length, is one of the English writer’s most enduring works, ranking behind cultural icons Animal Farm and 1984. It encapsulates Orwell’s mental state during his time as a policeman in Burma in the 1920s. Alongside novel Burmese Days (1934) and essay A Hanging (1931), Orwell provides an almost full picture of British existence under Empire. I find the last sentence of the above passage particularly pertinent. In the context of Shooting an Elephant it refers to the loss of individual agency for those embroiled in the imperial machine. Today, it applies on a national scale, with colonial legacy having significant influence over life in the Britain.

The prevailing view amongst those my age, especially those with origins from former British colonies (like myself), is that empire was an outright bad thing. In many instances, this is a result of a complete obliviousness to the facts. However, more often than not it is a result of the contrived interpretation of the facts to fit a preconceived viewpoint. Take for instance, the second longest uninterrupted cricket series in the world, The Battle of the Blues. The match has taken place annually since 1879 between two British founded schools in Sri Lanka, Royal College and St Thomas’ College. To a cricket lover whose family was educated at the former establishment, this can be no bad thing. To others it as a product of an education system designed to serve the colonial administration and a local upper class that would facilitate the British rule of Ceylon. Some would go as far as to argue that colonials forced cricket on Sri Lankans to teach them British Victorian virtues – an absolutely absurd interpretation of the facts. Similarly lopsided interpretations are made on the British established legal system, political institutions and infrastructure. In reality, to quote Oxford professor, Nigel Biggar, “if there is a debit column to the imperial ledger there is also a credit one.”

Ultimately, weighing the costs and benefits of colonialism is a futile task. Even if such an analysis were to conclude that British colonialism has been detrimental to the development of former colonies (as it might for say Belgian rule in Congo), this would be orthogonal to the case for dispelling sentiments of colonial guilt. My viewpoint is a utilitarian one; colonial guilt harms ex-colonisers and ex-colonies. It does so by creating a divided society at home whilst perpetuating feelings of victimhood overseas – a lose-lose scenario.

British children today grow up being taught that Britain is a nation built on a bed of imperial sin. Take the drive to “decolonise the curriculum” which is pushing for history syllabuses to take a “critical view” on Britain’s imperial past. Instead, it serves as a veiled attempt to promote an ideological narrative that portrays empire as unequivocally bad; it is in no way interested in exposing children to a scholarly exploration of its complexities. I don’t think those pushing for reform would be too pleased if a child were to submit an essay touting the benefits of empire.

And it doesn’t stop with history curriculums; throughout other parts of life in Britain there are attempts to foster feelings of colonial guilt. Take, for example, the BBC’s attempt to omit Land of Hope and Glory and Rule Britannia! from the Last Night at the Proms in 2020 due to their associations with colonialism and slavery. This was essentially an attack on British patriotism given the cultural importance of the songs. Thankfully, due to backlash from prom-goers this decision was overturned.¹ In this instance those expressing their grievances were likely quite elderly – something I can tell you from my significant experience of attending Proms at the Royal Albert Hall. I fear that the same may not be the case 50 years down the line when those who have experienced a “decolonised” education are of typical promming age. Instead, we can expect the tearing down of statues and ripping up of paintings, as was the case for a painting of Lord Balfour at Trinity last March.

Colonial guilt not only burdens former imperial nations but also promotes a sense of victimhood that hinders the progress of former colonies. By fixating on the historical underdevelopment caused by colonialism, these nations risk neglecting contemporary challenges, such as poor governance, that are within their power to resolve. Instead ex-colonies will be eager to, and feel empowered to, push for reparations. You don’t have to be an economist to understand that a simple transfer of a dollar amount (however large) from Britain will not improve living standards permanently in these nations; long-term economic growth is a much more complex story. One thing that may be able to achieve growth in these nations is investment, especially from foreign investors based in western economies such as Britain. However, such investment may invoke memories of colonialism. Instead, ex-colonies will accept investment from China whose intentions are almost purely extractive, take their debt-trap diplomacy through the Belt and Road Initiative (BRI) which aims to expand the superpowers global geopolitical influence.

You may struggle to see how these feeling abroad may be linked to colonial guilt at home. Well consider the recent news that Lord Hermer, Britain’s attorney general, advised Caribbean nations seeking reparations for slavey in 2013. Elsewhere in his past, Hermer has described “almost every element” of the British Empire as racist whilst arguing that children should be made to learn about its “legacy of violence”. In 2013, Lord Hermer helped force the Conservative government to pay out £19.9 million in reparations to Kenyans seeking damages for abuses under British rule between 1952 and 1962. The Caribbean officials, who he advised in 2013, are set to visit London this year in search of up to £18 trillion (yes, trillion) in reparations.² Having individuals like Hermer high up in government communicates to former colonies that we are open to discuss our colonial past, thereby enabling their victimhood.

Just as Orwell was a puppet of expectations and pressures beyond his control, Britain today risks being ensnared by the weight of its imperial past. A nation in which Brits are ashamed to be British is detrimental to the economic and social health of the nation. We need individuals to want to make Britain a better place, trust and value the communities they are a part of and be thankful for the opportunities that the nation affords us. Colonial guilt opposes these forces and it does so at the detriment of Britain’s former colonies who should stop picking apart the past.³ Instead they must focus on the future in order to develop. It is clear that there are no winners from sentiments of colonial guilt, the self-administered shackles of which must be removed immediately.

1. I was particularly happy about this since I attended the 2021 Last Night with my friends and proceed to belt out the lyrics to both iconic songs. ↩︎
2. The UK’s GDP in 2024 was just over £2.5 trillion. I would love to see the Excel on how the £18 trillion number is derived. ↩︎
3. If this language sounds familiar, it is stolen from Rishi Sunak who, in 2023, said “to unpick our history is not the right way forward”. ↩︎

PS: Throughout this post I have emphasised the importance of considering both sides of the argument. Therefore, I attach here a very entertaining Oxford Union debate speech by Shashi Tharoor in favour of reparations.