Japanese Economic System Op-Ed

Japan’s economic system has been growing steadily throughout the last century. During the Meiji era from 1868 to 1912, the Japanese government implemented a ‘Rich State and Strong Army Policy’ made to encourage quick industrialization. This system benefitted private businesses the most as factories and ships were built by the government and then sold at ridiculously low prices to new, home-based businesses. These small businesses controlled the majority of the factors of production with government involvement being profoundly influential in encouraging more entrepreneurs. During this time four major companies called the Big Four rose to power- Mitsubishi, Mitsui, Sumitomo, and Yasuda. These four companies had more than 30 percent of Japan’s mining, chemical, metals industries, 50 percent of the machinery and equipment market, and 60 percent of the commercial stock exchange.

After World War II, Japan completely reworked their economic system. Due to US intervention, Japan became a more capitalist country and began creating limitations to countries to avoid monopolies from the previous generation. After World War II Japan experienced massive economic growth at an average of 10 percent annually. This increase slowed during the early 1990s as the Tokyo Stock Exchange crashed during this time. The government has attempted to limit itself from interfering with the Japanese economy except for controlling trade and exportation. Due to its limited resources, Japan is highly dependent on imports and has one of the most substantial debts in the world at $10.46 trillion US dollars. The Japanese prime minister, Shinzō Abe, has mentioned that he plans to let the market correct the mistakes of the government created problems during the 1800s and early 1900s. He is also quoted as describing the Japanese political-economic system as being a “bureaucracy-led democracy” similar to France’s economic system. He also says that his primary goal for the next decade is to catch up with the US or at least limit the US’s lead in industrialized countries. A is a market-based economy where the factors of production are mostly held by private businesses, and the government tries to limit their involvement in the economic affairs. Shinzō Abe considers this system to be working as Japan is beginning to be seen as a competing country by other powerful industrialized nations.

Sources

Harner, Stephen. “A Japanese Free Market Economist on Japan’s Politics and Political Economy.” Forbes. Forbes Magazine, 14 Nov. 2012. Web. 13 Mar. 2017.

“Japan Economic Structure.” Japan Economic Structure | Economy Watch. N.p., n.d. Web. 13 Mar. 2017.

“Japan.” Japan Economy: Population, Facts, GDP, Business, Trade, Unemployment. N.p., n.d. Web. 13 Mar. 2017.

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