The book「１９４０年体制―さらば戦時経済」(The 1940 System: A Farewell to the Wartime Economy) by 野口悠紀雄 (Noguchi Yukio) argues that the Japanese economic model originated with wartime measures enacted between 1938 and 1942 and which weren't really reversed and just repurposed for peacetime. Shareholders stopped managing companies, bureaucrats (many of them Marxists who trained in or got experience in Manchuria then returned) built a proper machine of administrative control, finance was moved from capital markets to bank lending, tax revenue was centralised, tenant protection was implemented and the food price system was as well. These measures weren't reversed and were instead used by the bureaucrats post war (many of them literally the same people) to propell Japan into the world's second largest economy.
What's Japan's Model?
in General
I think there's some truth to this. My idea here is:
>Japan began modernising after Meiji; this modernisation consisted of modernising existing Sogo Shosha (Sumitomo, Mitsui, Mitsubishi, etc), and a general wave of new companies especially in the 1890-1910 period (Hitachi, Kawasaki, Ishikawajima, Nichimen, etc).
>This period from Meiji to (pre war) Showa was remarkably not particularly like Japanese modern development today. Labour mobility was high (so, lifetime employment wasn't a thing), firms were owned and controlled by shareholders, and finance wasn't landed by banks but raised through capital and securities markets. This propelled massive growth
>Wartime Showa wanted to make this economy function for battle, so a lot of the reforms implemented above were enacted. This basically froze Japan in time economically, and almost kind of intentionally.
>Post war Showa simply repurposed this machine for peacetime purposes. Beyond the examples I said above, modern METI comes from peak MITI which itself came from the Wartime Munitions Industry
>This, in the long term I think, seriously stifled economic development in Japan even though it allowed for great reindustrialisation/catchup growth. One piece of evidence I point to: There aren't that many genuinely new postwar Japanese companies. 1945-1990 you have Sony, Honda, Softbank, and Fanuc. That's...basically it; and the latter two had some backing or support.
>The first two were almost strangled in their bed anyway. Honda especially; MITI wanted to pass a law that only allowed authorised companies to even make vehicles, and Honda only beat them by rushing their vehicle development before that law was produced. The Japanese "1940 system" likely strangled in their infancies many potential Sonys and Hondas.
>And especially after the Economy began to slow down (starting in 1990 and completing with the Lehman Shock of 2008), there simply aren't many companies PERIOD. Post-1990 is....Rakuten. Uh, Mercari. Lol? That's it?
>Compare to China, where basically all major companies were formed after that period, and to the US, where a lot of companies are also new. Japanese companies are very OLD.
>Japan began modernising after Meiji; this modernisation consisted of modernising existing Sogo Shosha (Sumitomo, Mitsui, Mitsubishi, etc), and a general wave of new companies especially in the 1890-1910 period (Hitachi, Kawasaki, Ishikawajima, Nichimen, etc).
>This period from Meiji to (pre war) Showa was remarkably not particularly like Japanese modern development today. Labour mobility was high (so, lifetime employment wasn't a thing), firms were owned and controlled by shareholders, and finance wasn't landed by banks but raised through capital and securities markets. This propelled massive growth
>Wartime Showa wanted to make this economy function for battle, so a lot of the reforms implemented above were enacted. This basically froze Japan in time economically, and almost kind of intentionally.
>Post war Showa simply repurposed this machine for peacetime purposes. Beyond the examples I said above, modern METI comes from peak MITI which itself came from the Wartime Munitions Industry
>This, in the long term I think, seriously stifled economic development in Japan even though it allowed for great reindustrialisation/catchup growth. One piece of evidence I point to: There aren't that many genuinely new postwar Japanese companies. 1945-1990 you have Sony, Honda, Softbank, and Fanuc. That's...basically it; and the latter two had some backing or support.
>The first two were almost strangled in their bed anyway. Honda especially; MITI wanted to pass a law that only allowed authorised companies to even make vehicles, and Honda only beat them by rushing their vehicle development before that law was produced. The Japanese "1940 system" likely strangled in their infancies many potential Sonys and Hondas.
>And especially after the Economy began to slow down (starting in 1990 and completing with the Lehman Shock of 2008), there simply aren't many companies PERIOD. Post-1990 is....Rakuten. Uh, Mercari. Lol? That's it?
>Compare to China, where basically all major companies were formed after that period, and to the US, where a lot of companies are also new. Japanese companies are very OLD.
This helps explain something related:
Japan is quite a country of old money. I think this is known, in the sense that as Japan was the first Asian country to modernise its wealth is obviously much older than its parvenu neighbours, but people underestimate just how old the old money is.
You can make a genuine argument from the above that Japanese wealth is more old money than American wealth!
Japan is quite a country of old money. I think this is known, in the sense that as Japan was the first Asian country to modernise its wealth is obviously much older than its parvenu neighbours, but people underestimate just how old the old money is.
You can make a genuine argument from the above that Japanese wealth is more old money than American wealth!