Edward R. Beauchamp - The Japanese Economy and Economic Issues since 1945

A Collection of Essays

Series Editor

Edward R. Beauchamp

University of Hawaii

Edited with an introduction by

Edward R. Beauchamp

University of Hawaii

First published by Garland Publishing, Inc

This edition published 2011 by Routledge

711 Third Avenue, New York, NY 10017

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Introduction copyright 1998 Edward R. Beauchamp. All rights reserved.

Library of Congress Cataloging-in-Publication Data

The Japanese economy and economic issues since 1945 / edited with an introduction by Edward R. Beauchamp.

p. cm. (Dimensions of contemporary Japan ; 5)

Includes bibliographical references.

ISBN 0-8153-2732-3 (alk. paper)

1. JapanEconomic conditions1945 I. Beauchamp, Edward R., 1933 . II. Series.

Publishers Note

The publisher has gone to great lengths to ensure the quality of this reprint but points out that some imperfections in the original may be apparent.

Leon Hollerman

Laura E. Hein

Laura E. Hein

Richard Westra

T.J. Pempel

Hisao Mitsuyu

William W. Kelly

K. Sheridan

Loraine Parkinson

David L. Asher

Ippei Yamazawa

Nicholas Eberstadt

Haruhiro Fukui and Shigeko N. Fukai

Joel West

Robert E. Cole

Earl H. Kinmonth

Until very recently the Japanese economy was both admired and feared. It seemed that Japanese business could do no wrong and that Japan would soon overtake the United States as the worlds premier economy. Yet, rather than look at the economy of Japan as simply another economy, more similar than different to that of the United States, Americans tended to view it through one of two prisms. The first was based on the old stereotype of the inscrutable East, and the second was as Japan, Incorporated. In the former model, it is assumed that the mysterious Japanese had constructed an economic system that was inpenetrable to Western analysis; indeed, the success of the economy was not based on cool, deliberate, cost-benefit calculations, but rather on the uniqueness of the Japanese.

The second common approach to the Japanese economy is to view business and government as two sides of the same coin, i.e. Japan, Incorporated. That is, Japanese workers are seen as willing to work long hours for less than adequate pay; they are so loyal to their companies that strikes are rare. Businessmen collaborate not only with one another, but with the govermental ministries in order to promote the development of the economy, even if such collaboration impacts negatively on their own business. On the other hand, the government is seen as every ready to assist businesses, and consumers are content to buy Japanese, even if similar foreign products may be of equal quality and at a lower cost. If one examines various capitalist economies in a dispassionate manner, however, it is clear that economic systems are based, in most cases, on people acting in logical ways to maximize their personal benefits.

The dominant foreign view of the Japanese economy is that of Japan, Incorporated. For some reason, difficult to understand, supporters of this approach assume that Japanese industries (unlike those of the United States) have a common interest. The more one reads about the economy, the more one understands that this is not necessarily the case. Generally speaking, the relationship between government and business has been more that of regulator and the reluctantly obedient. The government does not generally order businesses to do certain things, but the application of administrative guidance is often viewed by foreigners as government control. In fact, the Japanese are, when it comes to economics, very much like everybody else. They are neither saints nor sinners, but act in the enlightened self interest of Japan in much the same way as others act in the enlightened self-interest of their respective countries.

This volume strives to introduce readers to economic issues and problems and to provide a reasonable framework within which to interpret Japans current economic policy. It opens with articles by Hollerman and by Hein (1984) which analyze the attempts of the Occupation authorities (1945-1952) to reconstruct the Japanese economy along modern and democratic lines. Hein (1994) then summarizes the postwar economic policy and its political context, while Westra suggests a periodization of Japanese capitalism in the postwar period. Pempels very incisive article details the role of the enormous Japanese economy on the much smaller economies of the region. Mitsuyu addresses the need for a transition of the economy given the realities of the late 1980s and early 1990s. Ashers question, What Became of the Japanese Miracle? raises a number of provocative points about the events of the 1990s and their impact on Japan. The essays by Kelly and by Sheridan focus on the issues of dependency and investment in the Japanese context, while Yamazawa tackles the question of how best to harmonize Japans economy with its international neighbors. The remaining articles focus on an analysis of Japans Equal Employment Law (Parkinson), the politics of the impressive financial transfers from Japan to North Korea (Eberstadt), the role of pork barrel politics in fueling Japans development (Fukui and Fukui), permanent employment (Cole), Japans patent system (Kinmonth), and, finally, the problems of software copyrights in Japans new information society (West). Of course, these issues merely scratch the surface of Japans economy, but these viewpoints provide a good starting point for the study of the state of Japans contemporary economy.

* * * * *

This collection of articles on modern Japanese society contains over one hundred scholarly pieces that have been written by leading academics in the field. It is drawn from distinguished scholarly journals, as well as from other select sources not as well known. Many readers, however, may be struck by the absence of material from the Journal of Japanese Studies. This is due to our inability to secure the necessary permissions from that journal to use their materials.

Leon Hellerman is Professor of Economics at Claremont Mens College and Claremont Graduate School in California. Research for this paper was supported by a grant from the Earhart Foundation.

I n an excellent essay, Tetsuo Najita recently offered an interpretation of Japanese history in terms of the conflict between two forces, bureaucratism (kanryshugi) and human spirit (ningensei kokoro)