R. Reid's new book brought me back to that conversation. ''Confucius Lives Next Door'' is aptly named. Reid, a longtime reporter and Asia correspondent for The Washington Post, has nailed his copy of the Analects to the mast. Drawing on the experience of his own and his family's life in Tokyo and other east Asian points, he has written a paean to what he terms ''east Asia's social miracle -- how the Asians have built modern industrial societies characterized by the safest streets, the best schools and the most stable families in the world.'' Asians, he holds, have ''a sense of civility and harmony that you can feel,'' and they ''achieved their social miracle primarily by holding to a set of ethical values -- what they call Confucian values.'' About the values he is correct -- at least as far as the Japanese and to a great extent the Chinese and the Koreans are concerned. Few of us who have lived in Asia have failed to be struck by what the less reverent might call the harmony imperative -- stay together, don't do anything out of line and remember that you are each and every one a part of society. Reid, who knows Japanese and has studied things Asian for many years, lived in a Japanese community, sent his children to an excellent Japanese public school and learned to put up cheerfully with his Japanese neighbors' codified concerns. ''The Japanese,'' he happily notes, ''are people who love rules.'' Written with grace, knowledge and humor, his book is a sympathetic Baedeker to the Japanese way of life. It is well worth reading for that. Not many foreigners have been able to fit in so well with their neighbors. His explanations of modern Japan and its Confucian background are accurate and useful, if occasionally wrongheaded. (Anyone who thinks that a lightweight writer like Akiyuki Nosaka deserves a Nobel Prize should take another reading course.) But he is certainly right that members of a grossly individualistic American Me Generation c...