Myth of the 20th Century Princes of the Yen – The Rise and Fall of Japan, Inc.
Nov 20, 2020
Hans dives deep into Japan's postwar economic history, drawing from Richard Werner's insights. He discusses Japan's transformation through the Meiji reforms and the significant impact of military industrialization. The conversation explores the Bank of Japan's shift from credit guidance to a speculative economy, contributing to the 'lost decade.' Hans critically analyzes the rise of Japan Inc., foreign acquisitions, and eventual economic collapse, highlighting the consequences of central bank independence and the complex relationship between finance and governance.
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Coordinated Industrial Catch-Up
- Japan rapidly industrialized after being forced open in the 1850s and adopted coordinated industrial policy to catch up.
- Centralized planning and export focus drove decades of double-digit growth and global market dominance.
MITI's Industrial Orchestra
- Japan used the Ministry of International Trade and Industry (MITI) to coordinate firms, export targets, and industrial priorities.
- This quasi-planned system prioritized strategic sectors and protected domestic markets to build global competitiveness.
Favor Savings And Productive Investment
- Preserve high national savings and coordinated investment to build productive capital rather than fueling speculative consumption.
- Encourage reinvestment in productive sectors and maintain policies that favor long-term industrial capacity.
