- The Washington Times - Tuesday, January 11, 2000

It was just a decade ago that this country was filled with fear of "Japan Inc." the megalithic economic juggernaut from the Land of the Rising Sun that was going to have us all working for the emperor. American businessmen pointed to the open collusion between the Japanese government and Japanese corporations and demanded a similar "industrial policy" be adopted here in the United States.

The Japanese bought huge chunks of prime American real estate including landmarks such as New York City's Rockefeller Center. A mere generation after total defeat in World War II the tables had turned. Anything with "Made in America" stamped on it was snickered at as third-rate junk built by lazy, half-bright American workers. That such a small island nation could rise from ruin to wield such tremendous economic power in so brief a span of time seemed a strong argument for emulating the methods of Japan Inc.

But then the "company" saw its economic good times turn for the worse. Last summer, the unemployment rate in Japan hit a historic high of 4.9 percent a devastating thing for a nation used to the security of lifetime employment at one company for loyal workers. Among young men, the unemployment rate is reportedly much higher. It stands at 10.7 percent "officially" but is probably more than that, if the shifting masses of idle youths and recent college graduates is any indication. Nissan Motor Co., Mitsubishi and Nippon Telephone & Telegraph recently eliminated a total of 51,000 positions and the government is pouring money into job programs.

One consequence of these economic dislocations has been a major uptick in the Japanese suicide rate. According to a recent article on the subject in The Washington Post, there were 33,000 suicides in Japan last year. That's about two-thirds as many people as die in automobile accidents here in America a continental superpower with a population of nearly 300 million. What accounts for the high suicide rate in Japan? Middle-age men and others who lose their jobs also lose respect in Japan where the culture still strongly values an individual based on his economic status. Age discrimination is both legal and widely practiced, so many 40- to 50-year-olds who have lost their jobs face either chronic unemployment or the ignominy of accepting a servile, menial position. For many, death is a third alternative.

For Americans, the lesson is that free markets, not industrial policy, lead to economic prosperity in the long run. While the U.S. economy suffered a downturn in the 1980s as businesses retrenched, retooled and adjusted their operations to meet the demands of the newly emerging, technology-driven economy, Japanese businesses were mired in bureaucracy and resisted making the necessary changes in time to catch the first waves of the economic boom that began in the early 1990s. Americans, like the Japanese, have suffered economic insecurity, "downsizing" and unemployment but the relative flexibility of our economy versus that of Japan's permitted a faster rebound.

Industrial policy has a potent allure when times are tough but that's nothing compared to the hangover awaiting those nations foolish enough to succumb to the temptation. It's a lesson Japan is learning right now and one we can be thankful we've avoided.

Sign up for Daily Newsletters

Manage Newsletters

Copyright © 2020 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.


Click to Read More and View Comments

Click to Hide