The Japanese Model
One of the most interesting economic phenomena of the past sixty years has been the emergence of Asian economic superpowers. The most successful of them have all studied the development of post-WWII Japan and imitated large parts of it. This is my take on how the Japanese model works:
Japan found itself at the end of WWII with a lot of its industrial infrastructure destroyed and many of its young adult population killed in the war. Not endowed with lots of industrial raw materials, its major remaining tradable economic asset was its labor power. It had other pluses. It had strong political cohesiveness, through the belief in the pivotalposition of Japan in the world order and in the role of the Japanese emperor as the sole global mediator between the human and the divine. The pre-war industrial conglomerates (zaibatsu), although legally banned, survived in all but name in the now famous post-war keiretsu, so the country had experienced administrators. In addition, Japan had American help during reconstruction.
What are the essential elements of the Japanese model? Continue reading