Miti and the Japanese Miracle: The Growth of Industrial Policy, 1925-1975

MITI And The Japanese Miracle: The Growth of Industrial Policy, 1925-1975 is Chalmers Johnson's in-depth, revisionist approach to understanding Japanese culture, society and economy. As the title eludes, the text focuses on what specific societal, governmental and cultural systems allowed for Japan's bubble economy of the 1980s. Like Harumi Befu's Hegemony of Homogeneity, MITI draws its strength from analyzing and criticizing the essentialist approach to understanding Japan. At the same time, both texts suffer from a clear lack of conclusions on the nature of Japan, though this does not undermine their ultimate validity. MITI is useful in understanding Japan's last century in that it attempts to give an unbiased, insider's view of the history of Japan's industrial boom. Johnson's central argument is that Japan owes its unprecedented and generally unexplainable (inscrutable) economic achievements to what he calls a "plan-rational system". Johnson believes that the Ministry of International Trade and Industry (MITI) combined with Japan's "iron triangle" formed from the government, bureaucrats and heavy industry were not only interconnected but completely interdependent; working together as a single whole with only one goal: economic development. The first chapter entitled, "The Japanese `Miracle'" serves a double purpose of showing the central argument of the text while at the same time analyzes and eventually disproves/ invalidates the four main conclusions being drawn by Johnson's contemporaries about Japan's economic boom. Here, Johnson explains the first theory, "The national-character explanation argues that the economic miracle occurred because the Japanese possess a unique, culturally derived capacity to cooperate with each other, " (8). Basically this theory is an outgrowth of typical post-war American Nihonjinron literature. This essentialist, anthropological approach merely makes generalizations about Japanese culture from America's experience with Japan during WWII. This theory relies on the assumed inscrutability of Japan. This theory is entirely devoid of the very real conscious actions taken by the Japanese government to change Japan's economy which Johnson focuses on heavily in his text. The second and fourth approach are based on the idea that no miracle occurred. These economically based theory rely on the randomness of market forces combined with Japan's ties to America. This means that the bubble occurred merely by chance with no effort put forth by Japan, and that Japan, or any nation for that matter, has little to no actual control over the market. As with the first approach, the second and fourth both undermine the intelligence of Japan's leaders in government and business by denying them credit for strengthening their own nation. Similarly, the third approach says that it is Japan's unique business structures that give Japan its economic edge. Johnson explains that the structures glorified in English as the "three sacre

This book is the classic to be read in the field of the developmental state which refer to East Asian economic developmental strategy not only for Japan. thou Chalmers Johnson is not the one who coined the word, developmental state, he has been most influential in that field by this book. btw dry and technical? I can't see why this book recieves that kind of respose. the overall style of description is something of an well written novel. the author gave the life to the past with details. and that it's interesting enough to be sombering overnight. Below I try to depict the position of this book on the discouse of economicsJohnson revived almost forgotten ghost from the sea of oblivion: mercantilism. Mercantilism seemed completely beaten away long before modern economics took shape. Mercantilism was a pragmatic adaptation, not a theory of how economies are supposed to operate. It anticipates or at times contradicts market signals, with the goal of channeling resources to (or away from) selected sectors, in the interests of the prosperity of the one or the power of other. But economists argued that such a policy is no more than the terror against market efficiency. The wisdom of the state can¡¯t be claimed to be more efficient than market. Moreover, it often mass-produces rent-seeking distortions on resource allocation. It makes more harms than benefits. The state should not guide the resource allocation. The role of the state lies in other area: providing the public good and responding to market failures. Johnson labeled this kind of role as the ¡®regulatory state¡¯. The United States and Britain exemplify the ¡®regulatory state.¡¯ Such state¡¯s task is the setting of rules that govern entry, exit, competition, investment, pricing, and other basic functions of the market. That kind of task is called as economic regulation. Economic regulation provides the basic framework of rules needed to keep market operate and responses to the problems of market failure. But developmental state, as Johnson found in Japan¡¯s success story, holds that economic regulation has the goals beyond market maintenance. Developmental state takes the long term national welfare as the primary mission of state. It actively intervenes in economic activities to improve the international competitiveness. Japan¡¯s economic bureaucrats and business leaders rejected the philosophy of laissez-faire, free trade of open markets. To them, these concepts were little more than protection for the economically powerful exporters. The strategy of developmental state is the denial of extant hierarchy of comparative advantage. To achieve high growth rate, there should be high return sectors. But such sectors, in general, have no relation with developing countries. Then, should developing countries rest with agriculture or labor-intensive industries? Not necessarily. Such sectors tend to be low value-added, in other words, with low growth prospect. If you don¡¯t have it, then make it! Japanese

This is a very dry and technical presentation of how the Japanese economy developed during the Showa era. Mr Johnson covers the pre-war colonialist era as well as the post-war reconstruction and focuses on government economic policy. He ends by questioning the Japanese model's effectiveness outside of Japan.