The Japanese Economy Essay, Research Paper
The Japanese Economy
The prewar economy of Japan was a Socialist economy and the country was
ruled by an emperor up to WW2 and after WW2 it started to lean towards a mixed
market economy until what it is today although its government is Socialist it is
leaning towards a mixed market economy.
The Japanese economy is a mixed economy that leans towards market, it is
like this because almost all business are run by private corporations or people
and that is the market in the economy. And the reason that they are thriving and
are so competitive is because of the trade tariffs and quotas that the
government has in place. These regulations include heavy taxes on some products
and denial on some others for example: the way Japan will only let certain
foreign cars in to Japan and even then they are so heavily taxed that the
average Japanese person can?t pay that much and will have to buy a Japanese made
car and at the same time in other countries they are selling their cars for less
than anyone else in that country and that is what they do with most of their
products and is how they get a trade surplus year after year.
Manufacturing is the most important economic activity in Japan it
accounts for about 28% of it?s GDP. The Japanese people import more than half
of the products that they manufacture from other countries in their crudest form
and manufacture them into transportation equipment, iron, steel, chemicals,
petroleum and coal products and textiles. Most of these products are produced by
large corporations with many employees and the happier the employees are the
more it will be done.
An aspect of a market economy that Japan has is the way the companies
treat their workers. The way the Japanese treat their workers is so different
form the way we treat our workers here. The Japanese are so much more respectful
towards their employer( the exact opposite from other countries especially those
with a centralized economy) and often work for one employer until retirement.
Some of the special treatment that the workers receive is housing; some of the
companies namely Honda have a special housing unite for their workers and their
families and a company cemetery for all the workers and their families. Because
of this the employees work habits are much more productive and a larger profit
can be turned and they can get a jump on the competition.
In centralized economies very few luxuries are returned to the people
and in market economies most of them are, in Japan there are to kinds of people
farmers and city dwellers, the farmers get no luxuries and live in poor
conditions while the city dwellers on the other hand get just about all the
luxuries like mass transit, hospitals and if you have a job financial security.
The government keeps whatever is necessary and whatever the people will buy and
will export the rest. In the farmlands there is a strong sense of a command
system and in the city there is capitalistic economy. Farming is one of the
larger employers in Japan it employs 9% of the work force but it only accounts
for 3% of the GDP. There are few government owned companies the only ones they
own are some power plants, railways and some airlines as well as the commuting
services and civil services. The government employs about 1 in 10 people in
Japan mostly civil services. There are some strict regulations set forth by the
government to insure that the countries stores are filled with Japanese goods
rather than foreign goods and they include trade restrictions such as tariffs,
bands and quotas.
After reviewing all this evidence the Japanese economy is leaning
heavily towards a market economy but does have some socialist government views
and laws but the market out weighs the command.
Another major part of the Japanese economy is international trade .For years after the end of the second world war, the Japanese suffered from an inferiority complex. This was the result of the American aid to Japan which helped to rebuild their country. Soon the Japanese started producing goods, small stuff at first, like junky toys in the earlier years – but then came better items, much better items. Now it is the Americans
that suffer from the inferiority complex, not familiar with being
economically vulnerable and not entirely in control of their destinies. Who
to blame – the Japanese of course. If Americans can not learn to compete
with the Japanese, then there is going to be some serious trouble because
the economic problem will not just “go” away.
When Japan lost World War II, six million Japanese had to return home
from the colonies Japan lost. These people had to be fed, clothed and
housed. The outlook for Japan’s recovery did not look very hopeful. The
Americans had no intention of helping the Japanese, but the communist
victory in China changed this, because the Americans wanted to stop the
further advance of communism. Americans started to help Japan out by not
making them pay reparations for war damages and opened Japanese trade to
other countries. The Americans dissolved the powerful family businesses
which opened business to more competition and in the countryside, they took
land from the landlords and gave it to the tenant farmers. By the time
American occupation ended in 1952, Japan had returned to prewar levels of
production. With their recovery now ensured, Japan embarked on a period of
great economic growth which is growing at a faster rate every day.
Yoshio Sakurachi, the speaker for the Lower House of the Diet (the
Japanese Parliament), called American workers lazy and illiterate. These
remarks came just after George Bush and the leaders of American Auto
Corporations had visited Japan, a trip that left everyone with an
impression of American weakness and whining.
Americans are now trying to figure out ways to get the economy back on
Line. Dr. William Lippy, for example, offered the 75 employees of his clinic $400
cash if they bought a new American car. He started inviting all other
companies to join in his “Jump-Start America” campaign. He claims to have
enlisted a total of 175 firms with 60,000 workers to offer similar
incentives. This is nothing new to the Japanese though, where this has been
going on for a long time. For example, Mitsubishi and other corporate
groups, called keiretsu have the power to order employees to wage personal
warfare on the commercial brands of a rival. A common story was of a group
of Japanese men that walk into a bar and shout “Biru” (Beer). The bartender
offers them Asahi Beer, a common brand but they shout, “Were Kirin men!”.
The Kirin men are literally that – employees of any one of the 148
companies associated with the Mitsubishi group, which controls Kirin.
Americans are running scared now, and you probably did not need this
essay to tell you that – and Japan is aware of this. So now opinion is
growing in Japan in favour of an almost revolutionary idea – to back off.
Corporations should raise prices, pay workers more for fewer hours and
distribute fatter dividends. This came after the President of Sony made a
speech saying that Americans will not take much more of the way the
Japanese are competing with them. They should in short then, become more
like their western rivals. Already change is afoot in Japan’s most
competitive industries. Since January, the two biggest auto companies,
Toyota and Nissan, have said that they would raise vehicle prices and
lengthen new product cycles from four to five years. Similar moves were
made by consumer electronics giants such as Sony and Matsu*censored*a. All these
changes would benefit foreign competitors worn down by the back-breaking
pace of the Japanese.
There have been some problems inside Japan as well that are hurting
American companies. For the last while, The Nikkei stock average has been
falling (See Graph #1) and Japan is in the beginning of a recession which
is getting deeper and deeper although nowhere near as severe as the
American recession. When domestic economic weakness is combined with a weak
currency, it is a recipe for fewer Japanese imports and more Japanese
exports. This pattern is already showing up. In the past year, Japan’s
total imports have fallen by one quarter, and it’s non-oil imports by 10
percent. In the case of Canada and the United States, both of which are
mounting recoveries in their own economies – Japan is each ones second
largest trading partner. Needless to say, the last thing either of these
two economies needs is a Japan that buys less and sells more, and becomes a
roadblock in their road to recovery.
Americans are looking for a way to come out of their recession and
become a growing world economy once again. Japan is right in their way.
America, so used to being on top, has never been so vulnerable. I believe
that if Americans don’t do anything, like provide incentives to “buy
American” and change the way they work and compete, then it is going to
stay this way. Japan may help them, now and then, like they are starting to
now, but that may not last. I believe that they can either become more like
the Japanese, giving up the lifestyles so grown accustomed to, by working
harder for less money, or learn to live with not always being on top of the
world economy. It is always hard to change, but sometimes you have to.
“Cocksure Japan Loses Confidence”, Cook,Peter. From the Globe and Mail
Newspaper, May 2, 1992
Compton’s learning company 1988. In Compton’s encyclopedia (vol. 12 pp. 34-39.). Chicago: division of encyclopedia Britannica, inc.
“Japan to Rethink Bullish Marketing Abroad”, From the Toronto Star,
“Japan Hits Hard Times”, Hillenbrand, Barry. From Time Magazine, March
“Japan in the Mind of America”, Morrow,Lance. From Time Magazine,
February 10, 1992
John J. Curran(May 18, 1992). Why Japan will emerge stronger. Fortune,