USA and Japan Term Paper

Pages: 5 (2001 words)  ·  Style: MLA  ·  Bibliography Sources: 0  ·  File: .docx  ·  Topic: Economics

USA and Japan

According to John Hunter Boyle's Modern Japan, the American Nexus Japan has established itself as the America of the East. The reason that Hunter argues this is that Japan's robust economic status, referred to as the Japanese Miracle, is a direct result of the relationship between the nations that was established following the end of World War II. In other words, out of conflict grew a nexus that Japan still benefits from today.

According to Boyle, the Japanese Miracle refers to the Japan's staggering post-World War Two economic growth. The reason why this time period is referred to as a miracle is due to the suddenness of the economic growth. Boyle examines the various theories of what caused this unheralded economic growth. Among the popular theories used to explain this phenomenon include the role of United States' investment; the Japanese government's economic intervention through their Ministry of International Trade and Industry; the role of cooperation between manufacturers, distributors, suppliers, banks, the government, and unions; and the overall role of Japan's unique employment institutions.

In the book, Boyle goes through each of these theories before making an argument for the one he favors. In order to understand why Boyle chooses the theory he does, one must understand the basis of his argument. To accomplish this, one first needs to hear the arguments for and against all of the plausible theories.

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The American theory is based on the role the United States government, in cooperation with the Japanese government, played in developing the war torn Japanese civilization. Immediately following the war, Japan faced economic catastrophe as its economy was in shambles due to the immense expense and destruction caused by its war effort. Under this theory, Japan's overall economic miracle would not have happened had it not been for the vital role played by the American government in initiating Japan's initial economic recovery process.

Term Paper on USA and Japan Assignment

Under the auspices of the Supreme Commander of the Allied Powers, the United States made developing the economy of Japan its main priority. It saw this process as the way to democratize Japan and therefore prevent a rebuilding of its militaristic past. The United States also saw the rise of communism in surrounding Asian nations and saw a quick creation of development, stability and prosperity in the Japanese economy would be key to preventing Japan from falling to the pressures of communism.

Ironically, it was this threat of communism that gave the Japanese economy and extra boost. As the United States became increasingly involved in the Korean War, they essentially created a wartime economy in Japan during the 1950s. Just as the 1940s wartime economy helped get the United States out of their economic depression, so did the wartime economy in 1950s usher Japan towards their 1960s economic miracle.

The primary fault with this theory is that it gives all the credit to Western influences. According to this theory, the only reason the Japanese economy flourished was because of the hands-on influence of the West, specifically the United States. As Boyle correctly points out, this mentality completely ignores the important role the Japanese government played in the 1960s, after the United States pulled out and Japan faced an economic crisis. Further, it also fails to recognize the role of the Japanese landscape, culture, and society.

A second theory for the cause of the miracle focuses on the role of the Japanese government following the 1950s wartime economy established by the United States. After the United States withdrew its occupation forces, Japan again faced possible economic catastrophe due to a decrease of revenue coming in. However, the actions taken by the government in the 1960s prevented this from happening. During this time, the Japanese government put its resources into stimulating growth in the private sector. It accomplished this by issuing numerous regulations and other protections that effectively prevented overproduction.

The government, after stabilizing the private sector, was able to turn its focus on international trade. It is Japan's use of international trade that ultimately made the Japanese economy the powerhouse it is remembered as.

One of the best examples of how the Japanese government succeeded at establishing a legitimate Japanese economy is the role of the Ministry of International Trade and Industry. According to Boyle, "The particular speed, form, and consequences of Japanese economic growth" are due to the programs of the Ministry of International Trade and Industry. Originally established in 1949, the Ministry's first program was to coordinate the various industries in order to counteract the deflationary effects of the United State's withdraw. To do this, the Ministry coordinated intense cooperation between the private sector and the Japanese government, something typically seen, by the West at least, as being anti-free market. However, in Japan's unique situation, this approach worked. Its overall goal was to establish a harmony between the national production goals with the individual industries private economic interests.

The Ministry's most successful economic programs that ultimately established the miracle economy was its separating the importation of technology from the regulations on importation of other goods. In 1950 the Ministry issued the Foreign Capital Law, which gave the agency specific powers to negotiate such technology importation issues as price and conditions. The overall effect of this government regulation was that Japan was able to promote industries that focused on technology development, which at that time was still an emerging market. The Ministry allowed technology to be imported at low costs. This in turn allowed industries to get into the technology market cheaply. The focus of the Japanese technology market became to improve and create new versions of the cheaply imported technology. In the end, this tight government control measure allowed the private technology field, and the overall economy, to flourish.

The primary flaw with this theory is its failure to acknowledge the important, albeit only initial role, which the United States played. As previously discussed, the United States post-war involvement in Japan gave it the needed revenue to kick start its economic development. If not for this influence, Japan could have fallen into a depression or political crisis. If this had occurred, it is doubtful that the Japanese government would have been in any position to play the influential role it did in the 1960s.

Another theory discussed by Johnson is the "socioeconomic school of thought." This theory gives credit for the Japanese miracle to "anything-but politics." According to this theory, it is the unique Japanese culture that allowed for the miracle to happen. In a sense, if it was not for this basic social-cultural landscape, the government programs previously discussed would not have succeeded. It is the belief of the socioeconomic theorist that Japan's culture is unique in that it inherently possesses the traits of sharing, cooperation, and teamwork. It is these cultural traits that essentially allowed individuals to put their immediate, personal best economic interest aside and instead focus on the immediate development of the national economy with an understanding that, by working together, they would eventually all be better off.

The problem with this theory, as Boyle correctly points out, is its failure to face the question of "why the Japanese cooperated." According to Boyle, who points to credible and through research, the Japanese people cooperated for the mere fact that they had to. After the war Japan as a society had fallen behind in terms of international development. Essentially, the post-war situation and failing economy left them no choice. There was no individual opportunity available. The only opportunity for personal advancement was to cooperate, a need that the government quickly picked up on and used to the entire nation's overall advantage.

The final theory highlighted by Boyle for the Japanese miracle is the role of Japanese specific institutions. Specifically he sites the unique institutions of lifetime employment, seniority-based wage system, and enterprise unionism. According to this line of thought, "because of these institutions...Japan obtains greater labor commitment, loses fewer days to strikes, can innovate more easily, has better quality control, and in general produces more of the right things sooner than its international competitors."

Admittedly, this argument is probably true in that because Japan has all of these "sacred treasures" their economy is more productive. However, this argument creates a "chicken vs. egg" argument in that the question is "what came first, the economy or these treasures?" As Boyle points out, it is hard to fathom these sacred treasures existing without a stable and productive economy. Instead, it seems more likely that these unique institutions are the byproduct of a unique and strong Japanese economy and that because of this strong economy, these treasures are allowed to exists and contribute to the continuance of the strong economy.

According to Boyle, the best theory for why Japan experienced its economic miracle is because of the role of the Japanese government, especially the programs carried out by the Ministry of International Trade and Technology. Boyle argues that the developmental state established by the Japanese government is responsible for the economic success the nation… [END OF PREVIEW] . . . READ MORE

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