(FORTUNE Magazine) – THINK OF THE DRUBBING that the Japanese Socialist Party gave the ruling Liberal Democratic Party in July's upper house elections. Now think of it as something like a college all-star baseball team scoring three runs off the San Francisco Giants in the top of the first inning. The crowd has jumped to its feet, and the TV commentators are predicting cataclysmic repercussions. But there are 8 1/2 innings to go -- and the major-league team has patience, experience, and better batters. Fed up by the lengthy Recruit bribery scandal that forced Prime Minister Noboru Takeshita to resign, annoyed by the geisha goings-on that overwhelmed Sousuke Uno's two months in office, and angered by a new 3% sales tax, Japanese voters decided to just say no to the Liberal Democrats, who have ruled Japan since 1955. The Socialists' charismatic leader, lawyer Takako Doi, 60, ran entirely on an anti-LDP platform. A vote for her party was a vote against corruption and the LDP, not an endorsement of the Socialist platform. Says the chairman of one of Japan's leading banks: ''A Socialist government in Japan? The chances are zero.'' Most analysts in Japan agree, though some would give slightly more favorable odds. Still, it could be months before the LDP sorts itself out, constructs a coalition, or possibly splits into two parties, one representing old party regulars, the other for young reformers. The LDP retains control of the Diet's much more powerful lower house. Though the Socialists won 46 seats of the 126 in contention in the upper house (vs. the LDP's 36), they can only try to repeal the sales tax and force a general election by year's end. In the remote chance that they form a government after that election, the Socialists' impact on the way Japan works would still be limited. Why? Because politicians don't run Japan. Bureaucrats do. That's why the country has managed to steam to the top ranks of the world's economies, even though political scandals are regular events. At least ten of the 19 postwar Prime Ministers have been investigated for corruption at some stage in their careers. Remember Kakuei Tanaka, the Prime Minister who took $2 million from Lockheed in the Seventies? Despite his conviction and resignation from the LDP, he was still able to nominate three subsequent Prime Ministers. He holds % a seat in the Diet as an independent, despite being all but incapacitated by a stroke. Japan's bureaucrats -- the senior managers who run the 12 national ministries -- work closely with the politicians on all matters of national interest. They also operate in conjunction with business leaders, making sure that any new laws dovetail with industry's needs. According to an LDP study, 86% of last year's legislation was written by the bureaucrats, including the hated sales tax. The remaining bills were drawn by Diet members, but only those with ministry backing had any chance of passing. ''The final responsibility for all legislation is in the hands of the bureaucracy, and this will not change,'' said an official with the Ministry of International Trade and Industry over lunch recently. His colleague added: ''We felt no sense of crisis during this recent turmoil. It's politics. We have a job to do.'' Even if the Socialists do come to power, their initiatives would not be as radical as their name implies. In order to win a general election, they would have to junk their wilder ideas about dismantling Japan's defense capabilities, closing nuclear power plants, and abandoning the U.S.-Japan security treaty. On trade, the Socialists may have to modify their pro-farmer stance: Japanese consumers are now happily accustomed to lower prices on imported oranges and beef. Finally, Doi has told voters she intends to work with the bureaucracy. IF THE PURPOSE of government is to provide the greatest good for the greatest number of people, Japan's system succeeds. The distribution of income remains remarkably even: Public opinion polls show that more than 90% of Japanese consider themselves middle class. The country has no drug crisis; modern health care is available regardless of ability to pay; government day care is excellent; and public transportation, while often very crowded, is clean and efficient. True, housing is cramped and traffic abominable. But earnings are up, jobs are plentiful, and the country is enjoying one of the longest economic booms since the war. Says Akira Nambara, a branch manager for Bank of Japan: ''I'm sure if Karl Marx came to Japan right now, he'd see paradise. My secretary's disposable income is higher than mine. (She lives at home.) But I have social status, a big office, and perks. In Japan big-company presidents have status but not big salaries. Small, entrepreneurial companies can pay higher salaries but carry no status. It's a nice balance, don't you think?'' ; The bureaucrats like to take credit for Japan's relatively smooth journey from militaristic menace in the Thirties and Forties to economic superstar of the Eighties. ''You don't see our students out in Hibya Park, marching against corruption,'' says a senior official of the Ministry of Foreign Affairs. ''But then, you also wouldn't see any of our military willing to shoot them either.'' The younger generation jostles for jobs, not for reform. Every spring a few thousand young people compete for 850 or so ill-paying jobs in government service. Of the Ministry for International Trade and Industry's 49 recruits this year, 38 were from the country's highly regarded Tokyo University. Fluency in English is now encouraged at the most prestigious ministries -- MITI, finance, and foreign affairs. (Some of the less visible ministries: construction, labor, and justice.) At the Ministry of Finance, the soon-to-retire vice minister, Toyoo Gyohten, studied at Tokyo University and at Princeton, on a Fulbright. His replacement, Makoto Utsumi, with a law degree from Tokyo University, is a specialist on taxation and was the principal architect of the Third World debt plan Japan presented at last year's economic summit in Toronto. Civil service has been considered a laudable career in Japan at least since the late 19th century. In fact, Tokyo University was founded in 1877 specifically to train government administrators. The passing of a competitive examination (which is open to everyone, not just university graduates) is the key to entry, and merit and seniority mark each step up the hierarchy. Still, the ministries are overwhelmingly dominated by college-educated men: Of the 3,283 senior managers in the bureaucracy, only 29 are women. Once a civil servant is assigned to one of the ministries, he tends to stay in that agency, accepting neither a patronage job nor a political appointment, until he retires. That generally comes at 50 or so. Early retirement not only opens up places at every level of the organization, it also allows middle-aged bureaucrats to try second, often more lucrative, careers in industry or politics. Around 20% of the Diet members are former bureaucrats. Most Japanese are comfortable with the concentration of power in the bureaucracy. Akio Kohno, an economics professor at Tokyo's Sophia University, says, ''All economic planning is done by the ministries. Politicians are really passers-by. We mustn't leave the nation's future to passers-by.'' As in the days of Tammany Hall in New York City and in Huey Long's Louisiana, the LDP hands out candidacies mainly on the basis of loyalty, family connections, and money. Once elected to the Diet, members can look forward to approving ministry-drafted legislation, debating a ministry-drafted budget, and rubber-stamping the party elders' choice of leader and Prime Minister. The current political system has drawbacks. Bureaucrats are naturally conservative. Thus, despite agreements on a host of trade issues, they have not been able to move fast enough to satisfy the U.S. on a litany of complaints. Another failing has been Japan's land policies, which have led to incredibly high urban-housing prices. In addition, the strong bureaucracy blocks the development of statesmen, people who can mold public opinion in Japan and the world. Instead of exercising political leadership, LDP representatives concentrate on securing pork-barrel goodies for their constituents, raising funds for reelection, and squabbling among themselves. Power is based on money-raising ability. Kazuo Nukazawa, managing director of the Keidanren, Japan's leading business association, complained before the recent elections, ''Takeshita collected two billion yen in just one evening. This is corrupt. That's our budget for a year. But we cannot blame the politicians entirely. We have to blame the people at large. They have always put up with it.'' THE SOCIALIST VICTORY seems to indicate that Japanese citizens may no longer be so willing. It may ultimately help Japan evolve into a true two-party system. Says Kagayaki Miyazaki, chairman of Asahi Chemical: ''Single-party dominance in both houses is abnormal in a parliamentary system. The result of the recent election marks only the start of a parliamentary democracy as it should be.'' The Doi victory may also spur reform attempts already under way. Even before the election, politicians were studying ways to dismantle the system that promotes money-raising skills over leadership abilities. One proposal would force politicians to disclose their assets and income publicly. ''Our government could do more for this great country and the world if we had strong leaders,'' says Nukazawa. And if the current political tumult does not ultimately produce great leaders? His reply reflects confidence in the long- established Japanese bureaucracy: ''Our growth rate won't be affected.''