Description: Ten years ago, Japan was predicted to dominate the world's economy. Today, it seems too feeble even to rescue itself from its economic malaise. How could the world's most acclaimed economic miracle have stumbled so badly? Why were most experts in the U.S. and Japan caught off-guard? And why do Japan's leaders still deny the gravity of the situation?
As this book explains, the root of Japan's problem is that it's economy and politics are still mired in the patterns of the 1950s-1960s. Back then, Japan's practices were brilliantly suited to engineering an unparalleled industrial takeoff. But, once Japan became a mature economy in the 1970's, continuing in the same old mold became a recipe for disaster. The Japanese system enshrined cartels and protectionism. It created a "dual economy" of super-strong exporters but woefully inefficient domestic sectors. It slowly and insipidiously sapped productivity, drove Japan's most effecient companies to invest overseas, and created the financial imbalances that are wreaking havoc today.
Unfortunately, Japan's vested interests and political machines are so dependent on existing practices that resistance to reform is powerful. And yet, warns author Richard Katz, without sweeping political-economic renovation that goes far beyond mere deregulation, Japan is doomed to years of economic stagnancy, financial turmoil, and political gridlock.
The challenging thesis articulated in this book is receiving widespread media attention in the United States and Japan and is sure to provoke continuing debate and controversy.
Review(s): ""A post-revisionist bible."" -- The Wall Street Journal Online
"Anyone with even a fleeting interest in the world's second-largest economy would be remiss not to pick up [this book]. It is a rich, handy, up-to-date guidebook to Japan's postwar political economy. ... [Katz's] combing out of Japan's dual economy and the failure of once-spectacular catch-up policies to work in a mature economy is thorough and informing. More valuable ... are the anecdotes, historical examples, and statistics that are used to show what has been going on in Japan since the end of World War II. ... This is a prodigious volume of research and storytelling that will induce readers to mark and star sections all the way through. ... This is a book often marked by good thinking and good writing." -- Business Week
"Katz ... is solid in his assessments of how the Japanese economy turned sour and is perceptive in his prescriptions for getting Japan back on course. His poking at both "traditionalist" and "revisionist" economists, whom he says have got things all wrong, is fun to read. ... Katz has delivered a timely and effective economic analysis and contributed more than most analysts to an understanding of what ails Japan and how it could be cured." -- Far Eastern Economic Review
"Sophisticated and stimulating interpretation of Japan's economic malaise. Richard Katz writes well and persuasively. ... [He] has succeeded in bringing economic theory into the debate on what went wrong in Japan, and what needs to be done, in lucid and provocative prose. ... Future historians writing with the safety of distance will likely find this one of the more reliable and intelligent contemporary commentaries [on the topic]." -- The Japan Times
"Recommended." -- Choice
"Important and timely. ... The prose is ... lucid, the analysis a tour de force and the argument has compelling momentum and clarity. It may be the most stimulating and challenging book about Japan's modern economy." -- Asahi Evening News
"His book does a careful job of linking Japan's stunning postwar rise to its later stagnation, pinpointing the moment at which its economic model started to sour and explaining how these changes produced what he calls Japan's 'deformed dual economy'--one consisting of both hypercompetitive exporters like Toyota and Sony and backward sectors like agriculture and basic materials." -- The Wall Street Journal
"The greatest strength of [the book] is its ability to describe in language accessible to non-economists how both the supply- and demand-side problems have contributed to Japan's economic difficulties in the 1990s. Katz makes it clear that any proposed solution that deals with just one of the two maladies will likely fail to solve the problem." -- Japan Quarterly
"Highly readable." -- Journal of Asian Business
"An ambitious and useful book. ... Something has gone seriously wrong with the Japanese economy in recent years, and this book is the first scholarly attempt to grapple with the root causes. Kudos to Katz for getting out an interesting and readable study on this hugely important question. ... A long and ambitious book that provides a great deal of information, includes many tables and charts, and attempts to deal with a wide variety of complex issues. ... You may agree or disagree with Richard Katz, but this book will keep you and your students intellectually engaged." -- Journal of Japanese Studies
"One of the most important and influential books about Japan since Chalmers Johnson's MITI and the Japanese Miracle. ... Richard Katz has constructed a compelling, richly detailed analysis that will change the way we think about Japan's political economy. ... Although many of Katz's conclusions are provocative and challenge much of the prevailing wisdom about Japan and its economic structures, his thesis is persuasive and supported by a wealth of empirical evidence." -- Pacific Affairs