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NO. 29 &emdash; August 1, 1997

 

Feature Article

REVISIONISM REVISITED by Arthur J. Alexander

Revisionism &emdash; as it refers to theories about Japan's political-economic system &emdash; is about the evolution of a set of ideas that were transferred, generalized and applied far beyond their original provenance. Theories of economic development in backward economies in the late 19th and early 20th centuries, exemplified by Germany and Japan, formed the basis of this school's analysis of Japanese practices through the 1970s. In a kind of freeze-dried view of history, the same institutions and processes identified as critical to Japan's stellar economic advancement are said to continue to determine the way things are done there today. Nothing changes, assert revisionist writers. Don't be fooled by surface movement; underneath everything remains the same.

The model that the architects of revisionism derived from Japan's experience has relevance to American audiences for two reasons. First, the methods presumed to have worked in Japan to produce its economic miracle through the 1970s and its alleged competitive trade threat since then have been recommended as appropriate economic policy for the United States. Second, the assumptions about Japanese behavior found in revisionist writings informed U.S. trade policy in President Clinton's first term.

The more influential revisionist writers, whose work appeared in the latter half of the 1980s and the early 1990s, include journalists James Fallows and Karel van Wolferen as well as former Reagan administration trade negotiator Clyde Prestowitz. They were preceded by then University of California professor Chalmers Johnson and his 1982 historical, political-economic study of what he and others have labeled the central institution in Japan's economic development &emdash; the Ministry of International Trade and Industry. This book provided the intellectual foundations for the more popular writings of the other authors and for Mr. Johnson himself. Its combination of scholarly insight and provocative findings also stimulated a great deal of further academic research that tested many of the hypotheses advanced by the originator of revisionism.

Enough time has passed since the revisionist books and articles were published that their hypotheses, predictions and assertions can be assessed with less emotion than governed their appearance. This report will focus on the authors named above and concentrate on their discussions about Japan, particularly those related to economic issues. Mr. Johnson and other members of the revisionist school unquestionably produced insights about the operation of Japan's state bureaucracy. It is their generalizations that are more problematic.

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Weekly Review

Economic White Paper Issues Call For Action by Douglas Ostrom

The United States achieved the needed changes. So did Great Britain. And Japan can, too. Or so says the Economic Planning Agency in its annual economic white paper, issued July 18. The agency makes a comprehensive case for extensive structural reforms that would usher in a brave new world of self-responsibility, free markets and risk-taking. EPA analysts add that now is a particularly appropriate time to embark on this journey, inasmuch as the economy, after years in the doldrums, shows signs of a sustained, private sector-led recovery. The alternative to sweeping reform, EPA not so subtly hints, is continued on-again, off-again growth that would not permit the economy to reach anything near its full potential.

 

Sokaiya Scandals Winding Up; Tokyo Readying Watchdog Agency by Jon Choy

Top executives of Nomura Securities Co., Ltd. and Dai-Ichi Kangyo Bank, Ltd. have admitted either to the police or to Ministry of Finance officials that current and former employees violated sections of the Commercial Code by consorting with alleged corporate extortionists or sokaiya. With a total of 14 Nomura and DKB employees under indictment, government officials and corporate managers are racing to repair the new damage to the reputation and the credibility of the financial industry. Besides penalizing the two major financial institutions, the government is considering toughening relevant laws, sharpening penalties and strengthening regulations to encourage firms to implement more stringent internal controls. Tokyo also is preparing for the inauguration next summer of a new financial industry watchdog agency.

 

Asean, Japan Choose Constructive Engagement Of Cambodia, Burma by Eric Altbach

Japan rebuffed American entreaties at the fourth annual meeting of the Asean Regional Forum to join in a coordinated suspension of aid to Cambodia in order to pressure the Hun Sen regime to hold free elections. The foreign ministers of Asean countries also reacted coolly when Secretary of State Madeleine K. Albright urged them at the July 27 gathering in Kuala Lumpur, Malaysia to make greater efforts to encourage democratization in Myanmar (Burma). The yearly ARF meeting affords Asean countries the opportunity to discuss security issues with both neighboring countries and extraregional powers.

 

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