Existing descriptions of the Japanese welfare state call to mind Akira Kurosawa's movie Rashomon, a murder mystery in which the main witnesses all disagree on the basic facts. Scholars of comparative welfare states report that Japan possesses a small welfare state much like the Anglo-American countries (Huber and Stephens 2001; Wilensky 1990, 2002). Scholars in Japan agree – and often lament – that their country has not caught up with the generous welfare states in northern European countries (Kaneko 1991; Osawa 2006, 2007; Shinkawa 1993; Watanabe 1990, 1991; Yokoyama 1976a). Western scholars familiar with the Japanese welfare system, however, disagree – albeit for different reasons. Many industrial relations scholars, for instance, claim that Japan possesses generous welfarist corporations that make a Western-style welfare state unnecessary (Dore 1973; Rose and Shiratori, eds. 1986). Many scholars of Japanese politics, in contrast, contend that Japan's welfare state – far from being small or unique – is actually not much different from the large welfare states of the continental European countries (Anderson 1993; Calder 1988; Campbell 1992; Campbell and Ikegami 1998; Kasza 2006). These scholars all capture part of the truth, but they miss the forest for the trees.

Once we take both social security programs and their functional equivalents into consideration, the initial puzzle presented at the very beginning of this book can be solved. Japan provides a much greater degree of social protection than its small social spending would indicate.