Japan As A Model Industrialize Essay, Research Paper

With the Japanese economy being viewed as one of the most prominent, industrialized economies in the world, it is vital that one considers all of the requirements of a highly industrialized society, and not base their judgments solely on economic output. Through an analysis of Japan s reliance on her government to regulate her economy, it will be established that she cannot compete in the global market. Furthermore, it will be demonstrated that according to Alexander Gerschenkron s theory alluding to industrialization, Japan has not developed in a manner that will allow her to prosper. Lastly, the fact that Japan depends on technological borrowing supports Gerschenkron s theory for late industrializers. When examining all of these aspects as a whole, it is obvious that when referring to Alexander Gerschenkron s theory regarding industrialization, Japan cannot be classified as a model industrialized nation, as she possesses the characteristics of a late industrializer with a weak economic capacity.

Japan s reliance on her government to regulate both trading practices and business operations reflects unfair protectionism and her inability to compete in the global market. This will be validated through an analysis of the role of the Ministry of International Trade and Industry (MITI) within Japan s economy. Furthermore, an elucidation of a U.S based manufacturer s experience in doing business in Japan will reflect protectionism within the nation. Finally, a case study on the automobile industry in Japan will be analyzed, and will portray Japan s reliance on her government. When combined this evidence will exemplify the fact that Japan is unable to compete without the influence of her government and therefore cannot be considered an economic power or an industrialized model.

The most prominent government influence in Japan is the Ministry of International Trade and Industry (MITI), which controls a great deal of her economy; The formation of the Ministry of International Trade and Industry (MITI) in 1947 which decides strategic industrial policy and determines with the corporations, which industries to target, enter, exit and take over is the reason that Japanese corporations will enter a particular market together. (Leclerc, 1997:17) The previous excerpt implies that the corporations within Japan are able to organize themselves as one super-power, with the assistance of the government, and thus they are able to take over and force many foreign companies into bankruptcy. Consequently, one is forced to believe that Japanese economy would not be as successful, if the government did not assist it.

To further verify Japan s reliance on her government, an experience that a U.S lamp manufacturer Lite Lamp encountered while trying to do business in Japan will be described. In 1993 the U.S lamp manufacturer Lite Lamp attempted to import and distribute its lamps in Japan. During the initial paperwork the owner was told that his business would not be allowed to operate in Japan, as she does not allow any business to be one hundred percent (100%) foreign owned. After careful investigation the owner pointed out that his wife was of Japanese descent and thus he was entitled to have his business operate in Japan. After finding several buyers, Lite Lamps began to import its lamps, coincidentally the government operated inspection committee took over nine months to inspect the crate of lamps forcing Lite Lamps to lose its customers and leave the Japanese market. (Leclerc, 1997:7) This situation implies that the Japanese are afraid of American; or any other foreign competition, as they (Japanese) prevented Lite Lamps from entering their market. This ultimately reflects Japan s insecurity as a nation and her inability to compete in the global economy without the leadership of her government.

Furthermore, Japan s automobile industry has avoided foreign competition due to several government initiated protection laws. In 1995 the Japanese government created a protection law, that required all imported automobiles to be safety tested. This requirement may appear to be reasonable, however it should be noted that the government charged the importer over $1,000 per automobile to complete the inspection, and the process took in excess of two months. As a result of the increased importation costs the non-Japanese manufacturers were forced to raise the prices of their cars to maintain a reasonable profit, thus making their automobiles more expensive than the Japanese ones. Furthermore, the Japanese government forced automobile insurance companies to charge higher premiums for non-Japanese automobiles, making non-Japanese automobiles unattractive to the consumer. (Nokeed, 1996:156) This case study once again implies that Japanese corporations are inferior to foreign specifically American corporations, and as a result they rely on their government to protect and isolate their economy from global competition. This situation also creates a vast inconsistency, as foreign countries allow Japanese corporations to access their markets without excessive tariffs or restrictions. Thus implying that Japanese corporations are not as powerful or as competitive as they appear to be.

When examining all of the previous material that pertains to the Japanese government s involvement in her economy it is very obvious that she relies on it to regulate various business operations and trading practices. The existence and the influential role of the Ministry of International Trade and Industry confirmed this. Furthermore, the fact that the Japanese government prevented Lite Lamp manufacturing from entering the Japanese market indicated that Japan relies on unhonorable business practices to ensure the success of her economy. Finally, the case study on the automobile industry in Japan verified that Japan s corporations fear foreign competition and as a result they rely on their government to create protection laws, that prevent foreign corporations from entering the Japanese market. Hence, according to Gerschenkron s theory Japan cannot be considered a model industrialized nation, as she does not possess the ability to compete in the global market without assistance from her government.

After World War Two, Japan s industrial output increased rapidly and as a result, she cannot be regarded as an industrialized model. This will be verified by the fact that Japan s real GNP per capita increased rapidly between the years of 1945 and 1950. Furthermore, Japan s economic growth rate between the years of 1945 and 1950 was substantially high and thus she experienced accelerated growth during this time period. Finally, the fact that Japan experienced extensive urbanization from 1945 to 1950 indicates that the industrial growth in Japan increased very dramatically. Consequently, Japan possesses the characteristics of a late industrializer, whose foundation will not allow her to maintain a stable and self-sufficient economy in the long run.

By comparing Japan s GNP per capita in 1945 to the corresponding figure in 1950 it is very obvious that she experienced significant growth in both her industrial output and her wealth. This is confirmed by the fact that in 1945 Japan s GNP per capita was one hundred and thirty-six dollars ($136, 1997 U.S. Dollars), whereas in 1950 it was in excess of four hundred dollars ($400, 1997 U.S. Dollars). ( Statistics for Developed Nations ) This signifies that Japan tripled its wealth in a period of five years, which ultimately reflects a rapid and excessive increase in consumer spending and consumer expectations. Consequently, one can assume that because of Japan s rapid increase in her GNP per capita she was pressured to increase her economic output very quickly and as a result she did not perfect it.

When examining Japan s average annual growth rate between the years of 1945 and 1950 it is very clear that during this time period Japan experienced immense economic growth. This is verified by the fact that in 1945 Japan s economic growth rate was seven percent (7%), and in 1950 the corresponding figure was in excess of fourteen percent (14%). Furthermore, Japan s average growth rate between the years of 1945 and 1950 was thirteen (13%) ( Japan Era of Rapid Growth ), which is more than four times greater than the economic growth rate in the United States of three percent (3%). ( Statistics for Developed Nations ) This indicates that Japan s growth between the years of 1945 and 1950 was greatly accelerated and thus a great deal of her economy is based on the technology and knowledge possessed during that time period. Hence, Japan s current economy cannot be considered modern and technologically advanced.

Japan s rapid growth in industrialization, after World War Two can also be validated by the fact that the percentage of the population in urbanized cities increased dramatically. For instance, in 1945 Japan s urban population accounted for fifteen percent (15%) of her total population, whereas in 1950 it accounted for fifty-seven percent (57%). ( Japan Era of Rapid Growth; Social Change ) This suggests that nearly half of Japan s population moved from rural civilizations to urban cities in the period of five years. Consequently, Japan was forced to develop her urban centers very quickly, and as a result she created several megacities (e.g. Hong Kong), in which some cities experienced immense wealth, while others experienced undue poverty.

By evaluating all of the indicators that reflect Japan s rapid and excessive growth in both industrial and economic output after World War Two, it becomes very clear that Japan s economy is not as powerful as it appears to be. This was verified by the fact that Japan s GNP per capita increased dramatically and as a result she was pressured to expand her economic output very quickly. In addition, it was demonstrated that Japan s annual economic growth rate between the years of 1945 and 1950 was far greater than that of the United States, and as a result her economy cannot be considered to be modern and technologically advanced. Lastly, it was established that as a result of Japan s disproportionate increase in its urban population megacities were created, which ultimately led to regional disparity. Consequently, Japan cannot be classified as a model industrialized nation, as she possesses several of the characteristics, such as an out-dated economy and regional disparity, which are prevalent in late-industrializers and weak economies.

The strongest indictor of Japan s inability to be classified as a model industrialized nation is her dependence upon technological borrowing. This will be confirmed by the fact that Japan s education system merely provides students with the ability to read and write, but not think. Furthermore, the experience of the small Canadian firm-Fusion Systems will be examined and it will be verified that Japan does not create new technologies, she steals them. Lastly, a case study in regards to the infamous TV cartel will be examined and it will once again be validated that Japan does not have the ability to invent new technologies. Together, these validations will support Gerschenkron s theory for late industrializers and consequently the fact that Japan cannot be regarded as an industrialized model will be justified.

In the majority of developed countries the foundation for establishing and creating new technology is provided by the nation s education system. Hence, a country will not be able to create new technologies without an education system that gives the student the ability to be creative and invent; Japan s impressive public education system may get high marks for behavioral control, but it can t stimulate either creativity or innovation but the system has not brought Japan any Nobel Prizes and in fact has forced scientists to leave the country in order to pursue pure research. (Schlossstein, 1991) This phrase indicates that Japan s society does not have the ability to create new technologies, as her education system does not provide her students with the ability to be creative or innovative. However, it should be noted that several products are thought to have been invented in Japan, thus implying that she is borrowing these technologies and declaring them as her own inventions. This can be confirmed by the fact that the quote indicates that Japan has not won any Nobel prizes, which are generally awarded to scientists and inventors. Consequently, Japan s inability to create technology is apparent, and thus she has relied on borrowing, technologies from other countries to stimulate her economy. To further validate Japan s inability to create new technology, an examination of a small Canadian firm s experience in 1992 will demonstrate that Japan deceitfully stole their technology and declared it her own. The small Canadian firm Fusion Systems, which invented and patented a new machine that would spray paint onto pop cans, experienced bankruptcy as a result of the large Japanese firm Mitsubishi, stealing its invention. When Mitsubishi first discovered the invention they bought one of Fusion Systems machines, made several insignificant modifications to it and patented the new improved machine. Fusion Systems was then sued by Mitsubishi and due to Fusion Systems financial inability to compete with Mitsubishi (one of the 10 largest Japanese companies) it was forced into bankruptcy. (Makino, 1993:192) This situation confirms that the Japanese stole a Canadian invention and ultimately declared it to be their own, which implies that the Japanese cannot produce new technologies, as they have to steal technology from other countries. The final example that will confirm Japan s inability to become technologically independent will be demonstrated through a case study of the infamous television cartel that occurred in the early 1960 s. To begin, the Japanese government prohibited U.S. made TV s from being sold in Japan, and as a result Japanese corporations offered large sums of money to the U.S. producers in return for the technology, that is required for the production of television s. Because the U.S. corporations spent a great deal of money in research and development to produce the television, they agreed to the Japanese offer, as they were in financial difficulty. However, the Japanese corporations and the government of Japan set up a scheme that allowed televisions to be sold at very high prices in their own country, and extremely low prices in the U.S. As a result, the U.S corporations were forced into bankruptcy, and thus the Japanese took over the market. This is the primary reason that the current TV industry is comprised of Japanese corporations such as Sony and Sanyo and not American corporations such as Quasar and Sylvania. (Leclerc, 1997:14) This indicates that the Japanese stole an American invention, as they forced the original producers of televisions into bankruptcy. Furthermore, it verifies that the Japanese did not invent the television, but they merely paid for the technology and ultimately ended up dominating the television market. Once again, this implies that the Japanese cannot invent new products and instead they choose to borrow, technologies and utilize unfair business practices to stimulate their economic growth and increase their wealth.

Through the previous evidence in regards to Japan s tendency to borrow, technology, it is very obvious that she does not possess the ability to create new technology and ultimately stimulate her economy. This was validated by the fact that Japan s education system does not allow her society to think creatively or innovatively. Furthermore, Japan s manipulation in regards to the borrowing, of technology from the Canadian firm Fusion Systems, implies that she cannot produce new technology, as she relied on stealing the technology from a foreign source. Lastly, the case study referring to the television cartel indicates that Japan relies on paying for its technology rather than inventing it. Consequently, according to Alexander Gerschenkron s theory, Japan cannot be characterized as an industrialized model, as she is not technologically independent and thus she cannot stimulate her economy without the assistance of foreign nations.

Throughout this evaluation of Japan s relative industrial development it can be concluded that according to Alexander Gerschenkron s theory alluding to industrialization, Japan cannot be classified as an industrialized model, as she possess the characteristics of a late industrializer with a weak economic capacity. This was reinforced by Japan s inability to compete in the international economy without assistance from her government. Furthermore, the fact that Japan experienced rapid and intense growth in the years after World War Two reflects that much of her economic development was accelerated and was not completed to perfection. Lastly, Japan s reliance on technological borrowing indicates that she cannot stimulate her own economy through the creation of new technologies, and as a result she is not economically independent. With the creation of the global economy and the uncertainty that accompanies it, it is essential that each individual nation is economically stable and self-reliant. This will not occur, if Japan is regarded as an industrialized model and developing nations reproduce her fallacies.