Quotes of the Day

Here's one indication of how important Japanese feel the upcoming parliamentary elections are to the future of their country: Prime Minister Junichiro Koizumi is being likened in the national press to Nobunaga Oda, a legendary medieval Japanese warlord who scored a key strategic victory in 1560 at the Battle of Okehazama, helping to unify the country after a century of civil war. Like Koizumi, goes the theory, Oda was a committed (and frequently ruthless) reformer, an uncommonly gifted politician, and a loner unafraid to go his own way. Though Koizumi has declared that he is "nowhere near Nobunaga" in stature, the PM is said to have become so enamored of the comparison that he has begun to refer to the rowdy political campaigns taking place all over the country as his own "Battle of Okehazama."

A bit melodramatic, perhaps, but the Sept. 11 vote, in which all 480 seats of the Diet's lower house are up for grabs, is the climax of a longstanding power struggle between Koizumi and rebellious lawmakers deeply entrenched within his own Liberal Democratic Party (LDP). After his project to reform Japan Post—which among other things is the world's largest savings bank—was voted down on Aug. 8, Koizumi dissolved parliament and called a snap election. That put his career, his legacy, his party and Japan's economic and political future in the hands of voters. Koizumi has framed the election as a referendum on postal reform, but it is about much more than that. It is no less than a national plebiscite on whether the Japanese want to cling to their semi-socialist, big-government roots, or to press ahead with the often painful reforms ultimately designed to produce a more modern, competitive economy. As Robert Feldman, Morgan Stanley's chief economist in Tokyo, says: "This is a hugely important moment for Japan."

There is no doubt that this particular warlord went looking for a fight. Although Koizumi swept to power in 2001 promising to rein in the country's sclerotic bureaucracy, end back-scratching between politics and industry and revitalize the economy, his reform record has been mixed, largely due to resistance from old-guard LDP members whose constituencies have long benefited from the wasteful pork-barrel programs Koizumi said he was targeting. But even in the face of frequent setbacks, Koizumi has consistently maintained that the privatization of Japan's bloated and economically inefficient postal savings system would be among his last and greatest achievements.

It certainly would be one of the biggest reform projects of all time. Japan Post's savings-bank unit holds nearly $2 trillion in deposits, one-third of the nation's total personal savings. But instead of lending to consumers and private businesses, as a normal bank would, Japan Post's deposits have for decades been tapped by the government to fund an endless parade of economically questionable yet politically popular public-works projects. Koizumi and his supporters insist that privatizing the post office, as they propose, would energize the economy by unlocking all that money, allowing market forces to allocate it more efficiently. But many LDP members vigorously oppose the postal-reform plan, in part because the 270,000 full-time Post employees are a huge constituency in their own right and because the system props up a host of other vested interests, like the construction, agriculture and financial industries.

After four years of political wrangling, six postal-privatization bills aimed at splitting Japan Post into four fully private companies by 2017 made it to the floor of the Diet this summer. Although 37 LDP lower-house members defied party orders and voted against the bills, they narrowly passed that chamber in July. But LDP resistance within the upper house stiffened, and on Aug. 8 that body voted the bills down by an unexpectedly large margin. That afternoon, Koizumi acted on a promise many thought was a bluff. He dissolved the lower house (in Japan, the Prime Minister does not have the power to dismiss the upper house) and called for a nationwide election.

Koizumi has said this election is an opportunity for the country to endorse or veto his structural-reform initiatives, and he has vowed that he will step down if the LDP and its coalition partner, the New Komeito party, cannot maintain a majority. Heizo Takenaka, Koizumi's Economics Minister and chief architect of the postal-reform plan, told TIME: "The question being put to voters is whether Japan should establish a smaller government or a big government." That may be, but the dissolution is also a political maneuver aimed at achieving another long-term goal of Koizumi's: to ideologically purify and unify the LDP and bring it under more centralized control. "I'm firmly resolved to shatter the old framework of the LDP and instead form a new framework for the party," Koizumi said.

Although the LDP has ruled Japan almost continuously for the past 50 years, it has always been a disjointed and fractious body. Historically, powerful LDP insiders controlled smaller collections of lawmakers that functioned almost like parties within the party, often with radically conflicting political agendas. Faction leaders routinely made important decisions by trading favors rather than hammering out unified policy. The result: contradictory lawmaking, opaque governance and internal squabbling that can lead to the sort of embarrassment that happened on Aug. 8, when a block of lawmakers voted down their leader's most cherished initiative. "Japanese parties have never functioned the way they do in Europe or the U.S.," says Tomoaki Iwai, a political-science professor at Nihon University. "Koizumi is redefining the relationship between party headquarters and the politicians."

Koizumi has demonstrated that he is willing to be ruthless in exacting revenge and imposing order. National LDP headquarters has withdrawn support from the 34 postal rebels running in the election (three of the 37 have retired) and Koizumi has personally dispatched handpicked candidates, tagged by the media as "the assassins," to run against all but two of them. With characteristic media savvy, Koizumi has pushed many of the highest-profile and, frankly, best-looking assassins to the forefront of the campaign. These candidates include a former TV anchorwoman who is now Environmental Minister, a former Miss University of Tokyo turned finance ministry bureaucrat, and a celebrity cookbook author. Although the LDP is fielding the lowest percentage of female candidates among the major parties, and only 10 of the 32 assassins are women, it is the "female assassins" that have captivated the nation. "It's like a virtual harem," sniffs Democratic Party of Japan (DPJ) candidate Muneaki Samejima, who is in a four-way showdown that features Koki Kobayashi, a postal rebel, and the woman sent in to eliminate him, Environmental Minister Yuriko Koike, one of the best-known of Koizumi's shock troops. "Getting his favorite women together and sending them off on a mission? It's like the [North Korean] Happy Corps," says Samejima, "and Koizumi is Kim Jong Il—anyway, that is the story going around [this] constituency."

Such stunts have led to the Japanese media's coinage of the derisive phrase "Koizumi gekijo" (Koizumi theater), but they have clearly galvanized a normally apathetic electorate. According to a poll by the Asahi Shimbun, one of Japan's largest newspapers, 50% of respondents say they are interested in this election, a higher percentage than in any other general election the paper has polled. TV shows are filled with raucous debate and newspapers delight in tracking the dramatic ups and downs of the assassins stalking their prey. Campaign stump speeches and rallies that would have drawn only a few dozen supporters in the past are now thronged by hundreds.

There is no better example of this rousing spectacle than the race in Hiroshima's sixth district, where Shizuka Kamei, 68, is facing-off against Takafumi Horie, the 32-year-old founder and CEO of Internet-services firm Livedoor. As former policy chief and the head of his own faction, Kamei was once one of the most powerful men in the LDP. This summer, he took center stage as one of the kingpins orchestrating the defeat of postal privatization. Since then, his world has been turned upside down.

Surprised by the dissolution of the lower house and by the LDP's withdrawal of support, Kamei quit the party to form the People's New Party. He seems almost insulted to be facing Horie, a brash tech wunderkind who, though he is running as an independent, was chosen by Koizumi to bring Kamei down. "I'm not very familiar with him or his campaign," Kamei told TIME, "but I hear that it's all a curiosity." Though already well-known as one of Japan's most successful young entrepreneurs (his stake in Livedoor alone is worth nearly $1 billion), Horie shot to household fame last year during his failed attempt to buy a professional baseball team and an unsuccessful bid to take over Fuji TV.

In the sleepy town of Onomichi in the prefecture of Hiroshima on the first day of campaigning, the two men's styles couldn't be more different. Horie jumps atop the podium, mobbed like a rock star by a crowd of young, predominantly female onlookers. "The way Japan has been using its money is horrendous," he yells into the bundle of microphones he is holding. "The old guard just wishes to preserve their own benefits. I can do better ... I can revive businesses in Onomichi. For me the most important thing is to raise the turnout rate, to give motivation to those who say elections are useless!" The LDP is hoping Horie can tap a wellspring of frustration over the stagnation that has settled upon the region during Kamei's tenure. And to a degree, Horie is doing so. "Nothing has changed here in years," says Masumi Nishikawa, a local housewife, "and if Kamei stays it'll just remain the status quo."

Horie appears supremely confident of victory. "Of the candidates, I think I'm the most capable politician," he says. "I'm the richest and the youngest. So it's better for the region and for Japan that [voters] choose me, no mistake about it." But winning won't come easy. Wherever Kamei goes, he draws large and adoring crowds, too. Unlike Horie's khakis and t-shirts, Kamei wears a blue suit, light blue shirt and tie and espouses an almost teary-eyed devotion to the constituency that has returned him to office nine times. Kamei dismisses the notion that Koizumi has presided over an economic recovery and disparages the dissolution of parliament as a desperate ploy. He receives rapturous applause. "The current economy only benefits a handful," he says, "and it's not upgrading the quality of life of the entire population. Local economies are drying up while big corporations are killing off the weak in the name of reform. This is not rejuvenation. You cannot call this success."

This message resonates throughout Kamei's district, especially his hometown of Shobara, a tiny village of 21,000 nestled in a remote river valley. Locals proudly mention that it used to take three hours to reach the coast, but because of highway-improvement projects Kamei helped to spearhead, it now takes only an hour-and-a-half. Says Haruo Kawamoto, a 65-year-old mechanic in Shobara: "Kamei has pursued a lot for us aggressively in the past."

Such sentiments highlight the biggest weakness in Koizumi's strategy. Like so many vassals of the samurai who are celebrated in Japanese folklore for gladly marching to death at the order of their lord, many of the assassins are unlikely to defeat the incumbents. Almost without exception, the assassins are glamorous, sophisticated, rich city-slickers parachuting into the poor, rural districts that are most suspicious of flash and that feel most victimized by the reforms Koizumi advocates. Ikeda Takashi, a 61-year-old sushi-restaurant worker from Mihara City says, "Horie? He's just an outsider. Hiroshima's got nothing to do with him. What does he know about us?" Horie acknowledges this view will be tough to overcome but maintains that it is not nearly the hurdle it is made out to be. "Everyone thinks that you have to run where you grow up," he says, "but there is no such law. People vote for politicians who can best understand their region or country."

Koizumi and the LDP are aware that many of the rebels may be returned to office. Still, according to one highly placed Koizumi advisor, as long as the LDP retains a majority, a few losses would be a survivable public embarrassment because Koizumi Theater would have served another strategic purpose: to push the DPJ, the nation's largest opposition party, to the margins.

That would be a sharp reversal for the DPJ, whose members won a solid 177 seats in the last lower-house election in Nov. 2003, sparking much talk that two-party politics had finally arrived in Japan. With the LDP currently riven by an almost religious schism, the looming election would appear to be the DPJ's golden moment to seize power. That's what DPJ president Katsuya Okada says will happen, and he has promised to step down if his party fails to secure a majority. But in a recent poll conducted by the Nikkei Shimbun daily, support for the LDP stood at 46% (up eight percentage points from the previous month) versus only 19% for the DPJ. "The DPJ lacks a grand vision, it got a slow start, and needs to get some momentum," says Jun Iio, professor of government at Tokyo's National Graduate Institute for Policy Studies.

Indeed, by casting the whole election as the new LDP versus the old LDP, postal reform versus anti-reform, to the exclusion of all other issues, Koizumi has managed to cut the DPJ's more subtle message out of the debate. DPJ candidates have had little luck attracting attention to issues besides postal reform, such as their push for changes in pensions, more rigorous limits on public spending, and the withdrawal of Japanese troops from Iraq by the end of the year. While Okada is widely admired for his earnestness and honesty, he may have too much of both for his own political good. Okada has, for example, freely admitted that he supports unpopular measures such as an increase in consumption taxes and funding restrictions that could lead to layoffs for some postal workers. Koizumi has repeatedly rebuffed Okada's challenge to a one-on-one debate. Samejima, the DPJ candidate in Tokyo's hotly contested district 10, admits that he's frustrated: "The LDP's internal opposition has made the DPJ fade out." Not surprisingly, the DPJ's leaders reject the notion that they have been marginalized, noting that they have a history of coming on strong in the final days of an election. Koichiro Gemba, chair of the party's election campaign committee, says: "According to our own surveys, the difference between us and the LDP isn't as big as reported."

If he's wrong and the DPJ loses seats, will it continue to function as an opposition party or will it face mass defections, even disintegration? "How this is all going to play out is entirely unclear," says Norihiko Narita, professor of politics at Surugadai University. According to the Nikkei Sangyo Shimbun, a business newspaper, the election is so hard to forecast that the media are conducting twice as many polls as normal. For now, it appears that even Koizumi is not looking beyond the coming showdown. According to an account in the Asahi Shimbun, an acquaintance recently asked Koizumi what he plans to do after this epic battle is over. His response: "Do you think Nobunaga had a clear plan for himself after Okehazama?"

• Jim Frederick | Tokyo
• In Japan's parliamentary elections, the Prime Minister is out to devastate his foes, transform his party and challenge the status quo. Is it suicide— or genius?