Japan's capitalism: creative defeat and beyond
By Shigeto Tsuru
Cambridge University Press, 1993; Canto edition 1996. 277 pp., $18.95
Review by Eva Cheng
A vast amount has been published on Japan's spectacular economic recovery from the ruins of World War II, but few writers have tackled the country's enormous troubles since 1990, which appeared to originate in its property and financial sectors.
The root problem comes from the increasing difficulty of Japan and other imperialist powers in securing profitable markets for their goods and capital, against a background of overflowing capacity. That difficulty intensified their mutual conflicts, which, in turn, further crippled their ability to tackle their collective problems.
Written in August 1990 and first published in 1993, Japan's capitalism couldn't address directly the post-1990 economic problems (this 1996 edition provides no update). But given its scope — to identify and address the structural problems of Japan's capitalist system since World War II — Japan's capitalism should be able to provide useful clues to what might have gone wrong since 1990 and whether Japan's troubles are unique or are a result of a broader problem of the world capitalist system.
The clues provided by Tsuru, unfortunately, are very approximate, which reduces the book's usefulness. For example, Tsuru has included amazingly little in a book of this scope on Japan's imperialist role, particularly in relation to its sourcing and marketing in Asia. He doesn't see adequately the zaibatsus — Japan's interlinked conglomerates — as an expression of the concentration and monopolisation of capital, implying that it's more of a uniquely Japanese phenomenon.
He also draws the incredible conclusion that Japan is a "mixed economy", a mode of production which capitalism as a whole is moving into, with elements of both socialism and capitalism, driven by a mixture of profit motive and "societal welfare motive".
On the basis of an inadequate review of the political and economic meaning of the processes of privatisation and globalisation, Tsuru remarks that they "appear to support a view" that "capitalism has won" in its contest with socialism. He even puts forward five proposals — God knows to whom — for how Japan's capitalism "might hopefully evolve" in a way that would benefit "nation-building".
His proposals are a very concentrated expression of naive liberalism. Japan should: emphasise human lives and health, and strive to become the "health care centre" of the world; develop more facilities at places of scenic beauty for tourism and health; promote international exchanges in cultural and aesthetic activities; increase its aid to the United Nations University; raise its financial and technical aid for developing countries and, in the longer term, open its markets for the manufactured products of the Third World. In short, Japanese capitalism should be "nice".
Little understanding is shown that Japan's postwar recovery was based critically on unequal exchange and exploitation of the resources, labour power and markets of the Third World, particularly Asia.
Tsuru seems to be ignorant of the political role Japan's aid has played in this process. Certainly, it would be "helpful" to the Third World countries if Japan opened its market for their manufactured products, but why hasn't it done so? Will Japanese capitalists do things that conflict with their own interests?
Tsuru has correctly emphasised the important role of the state in Japan's postwar re-emergence, devoting one of eight chapters to it, but he tends to treat it as a uniquely Japanese feature, failing to see the common role that state power has been playing elsewhere as well. Tsuru dwells too much on the paternalistic forms of state intervention in Japan, almost divorcing the interests of the state bureaucracy from those of Japanese capital.
Japan's capitalism provides useful information and data on Japan, especially during its seven years under US occupation and the period immediately after. Tsuru, who advised the US on economic strategy under the occupation provides a handy broad sketch of key economic developments in Japan from 1945 to 1990.
Tsuru questions the adequacy of GNP as a measure of "welfare content" of economic growth, and highlights the high costs that capitalism has inflicted on Japan's environment. His review of the three series of explosions in urban land prices, including the wave that began around 1986, which precipitated the crash in 1990, provides a useful background to further analysis of Japan's current problems.