The current "once-in-a-century" economic crisis has provided us with the opportunity to reflect on the consequences of our rapidly moving economy and society. Isn't it now time for us to fashion new systems that will work for the benefit of humanity?

*     *     *

Automotive giant Toyota Motor Corp., universally regarded as one of the world's strongest corporations, is projecting an unprecedented operating loss for the fiscal year ending March 2009. Many well-run Japanese corporations are finding themselves in a similar position, and executives of smaller businesses having been talking about a decline in sales on the order of 30 percent over the past few months. Underlying the woes of large and small companies alike are a sharp drop in sales and the dramatic increase in the yen's value. In retrospect, US real estate prices, which precipitated this terrible recession, have also risen and fallen precipitously over a period of a few years, and in the past year alone oil prices doubled, only to drop by two-thirds in the blink of an eye. The speed at which these changes have occurred calls for some serious soul-searching on our part.

A number of factors underlie the rapid pace at which economic events have unfolded, but foremost among these are deregulation and the abandonment of traditional business practices. Everything possible has been done to make the movement of people, things, and money as unfettered as possible. Together with the rise of information technology enabling the free flow of information, this led to the breakneck development and expansion of the economy as a whole. Nowhere has this been more evident than in the field of finance.

As the economy as a whole speeds up, our assessment of companies, executives, and employees and the mechanisms surrounding such assessment become increasingly oriented to the short term. This trend is exemplified by the shortening of the settlement cycle and the adoption of market value accounting.

In Japan, the need to step up labor regulation has become a topic of political debate of late as public concern mounts over the dismissal of employees from temporary staffing agencies-workers with virtually no safety net, who have come to occupy a substantial part of the workforce over the last decade. But having experienced the rapid changes sweeping the economy in recent years, business executives may end up devising alternative systems that will allow them to respond more quickly to changing conditions while avoiding public censure.

The duration of our relationships with products and other physical objects has also become shorter and shorter, although this is by no means a recent phenomenon. The words "built for life" have all but vanished from our vocabulary, and objects are rarely passed down from parent to child. Artisans and companies that take time to craft the sort of clothing or implements that others take time to use are all but extinct. This phenomenon is closely intertwined with the decline of local industries and rural communities.

That said, the fastest growing businesses are often the fastest to collapse. At the risk of sounding callous, we might interpret the recent drop in sales as no more than a sign that people have stopped buying things they don't really need. Here again, the finance industry presents the most salient example.

It seems, in other words, that the small group of individuals, companies, and countries that positioned themselves as "winners" while accelerating economic activity in a way that embroiled the entire world economy, not only left countless "losers" in their wake but actually cut their own throats in the process.

To my mind, the significance of this "once in a century" event is not that the magnitude of the problem demands stimulus measures to put everything back the way it was as quickly as possible, but that the time has come to take stock of the situation in which we find ourselves and the assumptions that brought us here.

This does not mean that Japan should return to the Edo period or completely disavow the American model of free-market capitalism that we so recently embraced. However, it might mean that we need to reconsider our commitment to slippery-smooth, friction-free economic activity through across-the-board deregulation and liberalization, and consider the possibility that judiciously placed barriers and selective regulatory friction may actually benefit humanity by slowing things down to the point where we can stop ourselves before going over the precipice.

There may still be a role for the World Trade Organization and the International Monetary Fund. But it seems to me that the time has come to seriously consider the creation of international agreements and organizations oriented to regulating and decelerating the movement of goods and capital with stability and sustainability in mind. In the "ultra-macro" domain of the global environment, this sort of discussion is already under way; henceforth we will doubtless begin to hear it in numerous "micro" domains as well. I believe that the current economic recession has placed us face to face with the challenge of fashioning new systems, in a wide range of areas, that will permit the coexistence of the local and the global, the fast and the slow, the large and the small, the individual and the universal.

In the year ahead the Tokyo Foundation plans to pursue its policy research and human resource development projects with this big picture in mind.