The Japanese Miracle
The tiny island nation of Japan provides many fine examples of what a country can do if it is not bogged down in futile wars and is intelligently governed. Taiwan, South Korea, Singapore, Malaysia and China have copied Japan’s model and have become extremely successful.
The U.S. is a great country with enormous potential. However, mismanagement and poor economic decisions, have squandered the power and wealth that previous generations worked so hard to create. To put this in perspective, this is how the U.S. compares with a country as small as Japan:
• Japan only has 4 percent of our land mass (smaller than California) and is 90 percent mountainous and infertile.
• Japan has minimal natural resources – no oil, no coal, no iron ore, not even timber, just fish!
• To manufacture a product, Japan must import all of its required resources. Even after these expenses, they have a huge annual balance of trade surplus with the U.S. and has also accumulate one-third of the world’s savings recorded in previous years.
• Few Americans realize that Japan generates on par or higher average wage rates than the U.S.
• The average Japanese family has a consistent yearly savings while the average American does not have any savings.
• Japan had a record $236 billion current account surplus (trade plus interest income and other receipts) with the rest of the world in 2007 – while the US had a record $731 billion balance trade deficit to the rest of the world during that same period.
Japan must be doing something right! Better planning, direction, and a more responsive government are keys to their success. They have learned a great deal from us and have improved on it. Perhaps it would be wise for us to study their improvements for our own benefit.
Compare this to:
• As of April, 2008, the U.S. has borrowed nearly $600 billion from Japan and $502 billion from China to keep our government running. This Money is also used to give ourselves tax refunds, pay for our internal budget deficits (over $10 trillion), and our external balance of trade deficit (2008 alone estimated to exceed $800 billion).
• The U.S. has two-and-a-half times Japan’s population, plus much more land and natural resources, but we are producing less, importing more, and borrowing more than ever before as well as selling our irreplaceable assets to pay for imports and debt.
• The U.S. is presently relinquishing much of its manufacturing power to outsourcing (giving away our technology and jobs to foreign companies and have them produce for us in their country; thus totally dismantling our industrial base) and insourcing (subsidizing foreign companies to manufacturer in the U.S. to produce for their benefit and their profit, which quickly displaces many of our factories).
• We are becoming vulnerably dependent on foreign companies for jobs and products. In Central Ohio alone (a seven county area within 60 miles of Columbus), there are 74 Japanese owned and 67 European owned American corporations that control a large percentage of the manufacturing in the region.
• American owned manufacturing is becoming obsolete and second rate. We are no longer competitive with Japan, China and others.
• The U.S. is the only major industrialized country that depends on foreign suppliers for large amounts of steel and other critical inputs needed by strategic industries.
• The U.S. is selling many of its best companies to foreign corporations (example: Arco and Amoco oil companies are now British owned, IBM PC is now a Chinese company, Lucent Technologies and RCA are now French, Zenith is Korean, Frigidaire is Swedish and Westinghouse Nuclear is Japanese). All this is happening while the U.S. is trying to fight four wars; the Afghanistan War, the Iraq War, the international war on terrorism, and an Economic War at home, which we are losing. We are incurring massive debt and are dependent on foreign sources for funding to continue these wars.
Every American should think about the direction towards which we are heading and the dangers and vulnerabilities we face if this course is maintained. Major changes must take place or we will face unimaginable problems and soon see an America we won’t recognize.
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This Work, The Japanese Miracle, by Thomas Heffner is licensed under a Creative Commons Attribution-No Derivative Works license.
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Japan's Economy is not Dominating like it did in the 1980's compared to Germany and a few other Countries but it is still the largest Creditor Nation on the Planet and has invested much money into China and also Eastern Europe. Japan has ultra Modern Infrastructure and also a strong export machine. For it's population size it is adequate and so they have reached their Zenith perhaps in the early 1990's but still they are very productive and High tech.
Germany is the Nation which has benefited the most since the end of the Cold War, tied with China for the Export Lead and leading in High Technology exporting 800 billion worth of High Tech Products or technology intensive products while Japan Exports 300 Billion in High Technology Products and America 80 billion yearly. Germany like Japan has World Class Infrastructure and 85% of it's citizens have either a Vocational/Technical Degree or a College Degree since both are Free in Germany, No Tuition and on the job/paid Vocational/technical training like much of Northern Europe. Their Savings rate is above 15% a year like much of Europe and They have a Trade Surplus equal to about 5% of GDP Yearly while the Budget Deficit has declined to below 4%, Add it all up and they are a huge Creditor owning assets around the World like Japan. Norway, Finland, Sweden, Denmark, Germany, Switzerland, Austria, Netherlands, Northern Italy, Eastern/Southern France, Northern Spain all have Powerful Economies and Export Machines, as a unit by Far the largest Exporters on the Planet both merchandise and services. Eastern Europe is being built up with Western European Money and also Japanese and American Money investing into it's Manufacturing base and also building up the Infrastructure and other Services. The EU is by far the largest Manufacturing in the World and investor! China is the second largest manufacturing in the World while Japan and the US have about the same capacity but Japan has an edge in high technology manufacturing and also it is a much smaller country so per capita is has a large edge.
Yes Some southern European Counties have problems like Greece but Greece was never the Center of Economic Activity in Europe. Japan had an asset bubble that burst in the early 1990's and so they have been working their way through it since while the exports have maintained large Surpluses and their Current Account. The Budget Deficit is owed mostly too their own Citizens from their Savings so Japan had not been as weak as proclaimed.
China has severe Environemental Problems, they are over populated, They still manufacture and are reliant on other Western/Japanese Technology so they too are over estimated when it comes to their strengths. Europe has had the best ride since the end of the Cold War and it makes sense- They invented the Capitalist Game and in 1953 they invented a new Version- Social Democracy which made the American System obsolete, it has taken a long time but this has been proven now.
How is a nation that has been in an economic 'lost decade' for 18yrs considered a 'Miracle'? Perhaps a nation like India or Brazil would have been a more logical choice.
The "lost decade" was a time when the banking system in Japan had so much bad debts on their books that they focused on survival rather than funding Japanese companies.
The lesson the U.S. should take from the Japanese experience is that the bad debts on the books of U.S. banks should have been allowed to sink some of the big banks and AIG. Our political leadership followed exactly the same path as Japanese leadership - keep the banks alive rather than allow them to fail.
I realize the "allow them to fail" course is an untried experiment in the sense that the U. S. did not have in place any laws, procedures or systems for allowing huge businesses in the financial sector to go bankrupt. Our failure was in what Obama did not do when he became President. He should have set up a part of the Treasury Dept. with the aim of figuring out how to let huge zoombie banks fail. Successor banks could have been developed after the equity in existing banks were destroyed - along with their debts. It would have been a blood bath but the guys that created the problem would have been punished along with many others who were innocent but implicated in the "get-rich-quick" culture.
Finally, I want to say that despite the lack of growth in GDP, Japan did continue to create a trade surplus and keep their people employed all during the lost decade. We will see that the U.S. will not be able to emulate the good things Japan did during their lost decade. U.S. citizens should look at other components of an economy other than how much increase in GDP.
Japan started its long upward climb to industrial success and prosperity in 1950, under the tutelage of three Americans: Frederick Winslow Taylor, Henry Ford and W. Edwards Deming. Only Deming was still alive at the time.
Progressives/Liberals have always hated Ford and Taylor. They found Deming acceptable because he bashed Taylor, who he totally misunderstood. Taylor and Deming would have agreed on eleven of Deming's famous Fourteen Points. They would have agreed on all fourteen if they could have gotten to know each other.
One of the major advantages the Japanese have is a "closed society." For all of the arguments in favor of "diversity," the Japanese have prospered without it.
The relationships between Japanese firms and their suppliers tend to be that of partnerships rather than adversaries.
The relationships between Japanese firms and their employee "unions" tend to be that of partnerships rather then adversaries.
The most successful Japanese firms value the ideas and suggestions of all employees. U.S. firms prefer to let the people at the top do all of the thinking, while the workers are expected to leave their brains at home.
Finally, the relationship between the Japanese government and Japanese manufacturing firms tends to be supportive rather than adversarial.
Clearly, Liberals and Progressives have no business discussing Japanese manufacturing because they are totally clueless about what has made it successful.
Bruce Bishop
If Japan goes down, it would be the fault of the arrogance of their leaders and extreme rigidity in their social structure where raised nail gets hammered down. They still have the strongest social and technical foundation to weather the economic storm. They did not expect China to rise so fast (that arrogance again), now they have to change with the new paradigm - so should we.
In contrast, when we see a raised nail, we just remove it...making the structure less stable. :-)
wow.....just wow....japan's economy has been getting gradually worse since like...? 20 years ago? it will be one of the next countries to go down the drain when we find out things aren't as rosy as the MSM or the establishment has painted them to be.
But what about the Japanese economy? surely Japan cant be the best example? I saw a doco on how a long of Japanese work as part time staff on long term bases....
Some say - Japan is not the future of mankind. They still maintain "us vs. world" Nazi strategy. It would be China and may be India to far future that we need to emulate under the Confucian Philosophy. Don't discount America either. We have the best and brightest Humanists on Earth.
The future is CIA (China, India, and America) by 2040. Seeds are being planted now. Some call it Singularity....
Two key words are: " intelligently governed"
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