The Japanese industrial economy : late development and by Ian Inkster

By Ian Inkster

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Here the arbitrary actions of the state were minimised, protection of property was optimised and individual contracting between ‘free’ economic agents thereby replaced force and obligation (Landes 1969, 1998). In contrast, with equally massive scope, Joseph Needham might have argued that China in many ways represented a more viable alternative setting for industrial development, witness its high levels of literacy, classical educational system and meritocracy (Needham 1986). We suggest here that, in cases of late development and technology transfer, the relations between market and non-market forces are systematically different from those found in either the earlier, Western industrialisers or in those nations which do not pass through a specific phase of industrial transition at a later date, whether this be the result of missing assets or colonisation.

The continuing industrialisation was dominated by the state, which retained its political control in the face of cultural and political conflicts. The later Meiji years witnessed a greater spread of industrialisation, and the continuing prominence of government during the build-up of a militaryindustrial complex and the successful waging of major wars against China (1895) and Russia (1904–5). For both nations engaged in the second of these conflicts, war had profound outcomes in the longer term. In Russia defeat was an element in the civil breakdown of 1905, the prolongation of recession and the ideological turmoil that was to lead to the Revolution of 1917.

If the Japanese bubble economy collapsed in 1990, there was no identifiable turning-point towards fast growth up to the year 2000. 5 per cent for the decade, and definite negative growth in 1997 and 1998, the Japanese economy has suffered its worst long-term growth performance since 1868 (Economist, 27 November 1999: 156–7, Samuelson 2000). The collapse of the real-estate and stock markets has continued into the new century. In industry profits have been falling and unemployment rising and wages declining.

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