The japanese economic crisis

THE JAPANESE ECONOMIC CRISIS Also by Jon Woronoff ASIA'S 'MIRACLE' ECONOMIES HONG KONG: CAPITALIST PARADISE INSIDE JAPAN, INC * JAPAN AS - ANYTHING BUT- NUMBER ONE JAPAN: THE COMING ECONOMIC CRISIS JAPAN: THE COMING SOCIAL CRISIS "JAPAN'S COMMERCIAL EMPIRE JAPAN'S WASTED WORKERS THE JAPANESE MANAGEMENT MYSTIQUE 'JAPANESE TARGETING THE JAPAN SYNDROME KOREA'S ECONOMY: MAN-MADE MIRACLE *THE 'NO-NONSENSE' GUIDE TO DOING BUSINESS IN JAPAN "POLITICS: THE JAPANESE WAY UNLOCKING JAPAN'S MARKETS (with Michael R Czinkota) WORLD TRADE WAR Published by Macmillan The Japanese Economic Crisis Jon Woronoff Second Edition & fifi © Jon Woronoff 1992, 1996 All rights reserved No reproduction, copy or transmission of this publication may be made without written permission No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London WIP 9HE Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages First published in Japan by Yohan Publications Inc under the title Japan: The (Coming) Economic Crisis 1992 Published by MACMILLAN PRESS LTD Houndmills, Basingstoke, Hampshire RG21 6XS and London Companies and representatives throughout the world First Edition 1992 Second Edition 1996 ISBN 0-333-65826-4 hardcover ISBN 0-333-65827-2 paperback A catalogue record for this book is available from the British Library 10 05 04 03 02 01 00 99 98 97 96 Printed and bound in Great Britain by Antony Rowe Ltd Chippenham, Wiltshire Contents Preface to the Second Edition The (Coming) Economic Crisis What Is A Crisis? When Is It Coming? Ready Or Not 11 14 18 Economic Miracles and Mirages No More Growth Hero Unsteady As She Goes What Went Wrong? Excuses, Excuses 23 28 32 37 Economic Super-Management Planning And Targeting, Sort Of Financial Wizardry Rearranging The Economy 45 50 54 The Little Train That Couldn't The Mighty Locomotive 61 The Cumbersome Wagons A Two-Track Economy Japan's Wasted Workers Productivity Peters Out Contrast In Blue And White Japan's Renowned (Mis)management System Subsidies And Services Ballot Boxes And Red Tape 64 68 75 79 84 88 92 Rich Nation, Poor People Only Rich On Paper Profitless Companies Pity The Poor Worker Let The Consumer Pay Government-Induced Waste 99 104 110 115 120 What Quality Of Life? Of Rabbit Hutches And Workaholics Spiritual Want Old Age Insecurity 127 132 137 140 The Human Element Fails Eroding Work Ethic Decaying Loyalty Gaping Generation Gaps 149 154 160 Work Is No Fun The Company "Family" Blue-Collar Blues White-Collar Blahs Working Women's Woes 169 174 180 186 10 Demise Of The Classless Society New Rich, New Poor 195 11 12 Whose Company Is This? Birth Of An Aristocracy 204 212 The Crisis Cometh So Far, No Good What About The Future? Rising, Setting Or Immobile? Crime And Punishment 219 224 228 236 Postscript The "Bubble Economy" Problems, Problems Time (Again) For Reform Crisis Or COLLAPSE? 243 251 261 266 Bibliography Index 273 281 Preface to the Second Edition When I wrote the predecessor to this volume, Japan: The Coming Economic Crisis, almost two decades ago, the idea of an economic crisis in Japan was deemed completely and utterly unrealistic Even when I wrote the first edition of The Japanese Economic Crisis, while it was regarded as plausible by some, the majority still thought the idea was a bit farfetched Now that this book is going into a second edition, just a few years later, the idea appears almost self-evident to all but the die-hards Why does the idea of a Japanese economic crisis seem so much more realistic now? That is obvious The great "bubble economy" of the late 1980s has burst and Japan has been contending, and not terribly well, with its most tenacious postwar growth recession Japanese companies have been plagued with one problem after another: low profits, loss of competitiveness, the heavy yen, hollowing out, and so on The government has made repeated efforts to revive the economy, but one stimulus after another has petered out Meanwhile, the average Japanese, whose willingness to work and sacrifice remains essential, is tired of striving so hard for so little This would make for a crisis anywhere But, in Japan, there is much more to it than that For the very essence of the economy is vitiated Despite considerable growth over the past decades, the Japanese still not live in anything resembling a prosperous country Their housing is quite ordinary (if not necessarily "rabbit hutches") and they work many more hours than their counterparts in other advanced countries (so they are still relative "workaholics") Pressure from the company has disrupted their family life and their personal life and sapped the political system Even though they apparently earn more than the rest of us, they spend much more and end up behind With Bibliography For those wanting to know more about the Japanese economy, and some of the related background, the following is a useful list of references They include critical and laudatory works, good books and books that are well-known, not always the same thing Right or wrong, they show various aspects of the subject and the debate Of particular interest are the English translations of works by Japanese academics, on the whole far less enthusiastic supporters of Japan's economic management than their foreign colleagues 10 11 12 Economy "Bubble Economy" Financial and Stock Markets Industrial Policy Trade Overseas Investment Aid Management Industrial Relations Women Workers Groupings and Associations Culture, Society, Politics Economy Czinkota, Michael R., and Woronoff, Jon, Unlocking Japan's Market, Chicago, Probus, 1991 Francks, Penelope, Japanese Economic Development: Theory and Practice, London, Routledge, 1991 Gibney, Frank, Miracle by Design: The Real Reasons Behind Japan's Economic Success, New York, Times Books, 1982 273 274 Huber, Thomas M., Japan's Strategic Economy, Boulder, Westview Press, 1994 Inoguchi, Takashi, and Okimoto, Daniel I., The Political Economy of Japan: The Changing International Context, Stanford, Stanford University Press, 1988 Ito, Takatoshi, The Japanese Economy, Cambridge, MIT Press, 1991 Kahn, Herman, The Emerging Japanese Superstate, Harmondsworth, Penguin, 1970 Komiya, Ryutaro, The Japanese Economy, Trade, Industry and Government, Tokyo, University of Tokyo Press, 1991 Kosai, Yutaka, The Era of High-Speed Growth, Tokyo, University of Tokyo Press, 1986 Lincoln, Edward J., Japan, Facing Economic Maturity, Washington, DC, Brookings Institution, 1988 Morris-Suzuki, T., and Seiyama, T (eds.), Japanese Capitalism Since 1945, Armonk, M.E Sharpe, 1989 Nakamura, Takafusa, The Postwar Japanese Economy, Tokyo, University of Tokyo Press, 1981; 2nd edition, 1995 Okabe, Mitsuaki, The Structure of the Japanese Economy: Change on the Domestic and International Fronts, London, Macmillan, 1994 Shinohara, Myohei, Industrial Growth, Trade and Dynamic Patterns in the Japanese Economy, Tokyo, Tokyo University Press, 1982 Smith, Dennis, Japan: The Rise of an Economic Superpower, London, Macmillan, 1995 Tachi, Ryuichiro, The Contemporary Japanese Economy: An Overview, Tokyo, University of Tokyo Press, 1993 Tsuru, Shigeto, Japan's Capitalism: Creative Defeat and Beyond, London, Cambridge University Press, 1993 Uchino, Tatsuro, Japan's Postwar Economy, Tokyo, Kodansha International, 1983 Van Der Meer, Cornelius L.J., and Yamada, Saburo, Japanese Agriculture, London, Routledge, 1990 Woronoff, Jon, Asia's "Miracle" Economies, 2nd edition, Armonk, M.E Sharpe, 1991 , The Japan Syndrome, New Brunswick, Transaction Books, 1985 , Japan: The Coming Economic Crisis, Tokyo, Lotus Press, 1979 Yamamura, Kozo, Economic Policy in Postwar Japan: Growth versus Economic Democracy, Seattle, University of Washington Press, 1967 , Japan's Economic Structure: Should It Change?, Seattle, Society for Japanese Studies, 1990 Yamamura, Kozo, and Yasuba, Yasukichi, The Political Economy of Japan: The Domestic Transformation, Stanford, Stanford University Press, 1987 Yamazawa, Ippei, Economic Development and International Trade, The Japanese Model, Honolulu, University of Hawaii Press, 1990 275 "Bubble Economy" Emmott, Bill, Japanophobia: The Myth of the Invincible Japanese, New York, Times Books, 1993 , Japan's Global Reach, London, Century Books, 1992 , The Sun Also Sets: Why Japan Will Not Be Number One, London, Simon & Schuster, 1989 Reading, Brian, Japan, The Coming Collapse, London, Weidenfeld & Nicholson, 1992 Wood, Christopher, The Bubble Economy: Japan's Extraordinary Speculative Boom of the '80s and the Dramatic Bust of the '90s, London, Sidgwick & Jackson, 1992 , The End of Japan Inc And How the New Japan Will Look, New York, Simon & Schuster, 1994 Financial and Stock Markets Alletzhauser, Albert J., The House of Nomura, New York, Harper, 1990 Shibata, Tokue, Japan's Public Sector: How the Government is Financed, Tokyo, University of Tokyo Press, 1994 Singleton, Kenneth J., Japanese Monetary Policy, Chicago, University of Chicago Press, 1994 Tatewaki, Kazuo, Banking and Finance in Japan, An Introduction to the Tokyo Market, London, Routledge, 1991 Zielinski, Robert, and Holloway, Nigel, Unequal Equities, Power and Risk in Japan's Stock Market, Tokyo, Kodansha International, 1991 Industrial Policy Calder, Kent E., Strategic Capitalism: Private Business and Public Purpose in Japanese Industrial Finance, Princeton, Princeton University Press, 1993 Feigenbaum, Edward A., and McCorduck, Pamela, The Fifth Generation: Artificial Intelligence and Japan's Computer Challenge to the World, Reading, Addison-Wesley, 1983 Johnson, Chalmers, MITI and the Japanese Miracle, The Growth of Industrial Policy 1925-1975, Stanford, Stanford University Press, 1982 Komiya, Ryutaro, Okuno, Masahiro, and Suzumura, Kotaro (eds.), Industrial Policy of Japan, Tokyo, Academic Press, 1988 Nester, William R., Japanese Industrial Targeting, The Neomercantilist Path to Economic Superpower, London, Macmillan, 1991 Okimoto, Daniel L, Between MITI and the Market, Japanese Industrial Policy for High Technology, Stanford, Stanford University Press, 1989 276 Vestal, James E., Planning for Change, Industrial Policy and Japanese Economic Development 1945-1990, New York, Oxford University Press, 1994 Vogel, Ezra, Comeback, New York, Simon & Schuster, 1985 Woronoff, Jon, Japanese Targeting: Successes, Failures, Lessons, London, Macmillan, and New York, St Martin's, 1992 Trade Bhagwati, Jagdish, The World Trading System at Risk, Cambridge, MIT Press, 1991 Cohen, Stephen D., Cowboys and Samurai, Why the U.S is Losing the Battle with Japan and Why It Matters, New York, HarperCollins, 1991 , Uneasy Partnership, Competition and Conflict in U.S.-Japanese Trade Relations, Cambridge, Ballinger, 1985 Encarnation, Dennis, Rivals Beyond Trade: America Versus Japan in Global Competition, Ithaca, Cornell University Press, 1992 Lincoln, Edward J., Japan's Unequal Trade, Washington, D.C., Brookings Institution, 1990 Ministry of International Trade and Industry, White Paper on International Trade, Tokyo, annual Prestowitz, Clyde V., Trading Places: How We Allowed Japan to Take the Lead, New York, Basic Books, 1988 Sato, Ryuzo, and Nelson, Julianne (eds.), Beyond Trade Friction, Japan-U.S Economic Relations, New York, University of Cambridge Press, 1989 Tyson, Laura D'Andrea, Who's Bashing Whom?: Trade Conflict in HighTechnology Industries, Washington, D.C., Institute for International Economics, 1992 Wolf, Marvin J., The Japanese Conspiracy, New York, Empire Books, 1983 Woronoff, Jon, World Trade War, New York, Praeger, 1984 Overseas Investment Abo, Tetsuo, Hybrid Factory, The Japanese Production System in the United States, New York, Oxford University Press, 1994 Bartu, Friedemann, The Ugly Japanese: Nippon's Economic Empire in Asia, Singapore, Longman, 1992 Edgington, David W., Japanese Business Down Under, Patterns of Japanese Investment in Australia, London, Routledge, 1990 Fucini, Joseph J and Suzy, Working for the Japanese: Inside Mazda's American Auto Plant, New York, Free Press, 1990 Fukuda, K John, Japanese-Style Management Transferred, The Experience of East Asia London, Routledge, 1988 277 Garrahan, Philip, and Stewart, Paul, The Nissan Enigma: Flexibility at Work in a Local Economy, London, Mansell, 1992 Gelsanliter, David, Jump Start: Japan Comes to the Heartland, New York, Farrar, Straus, Giroux, 1990 Mason, Mark, and Encarnation, Dennis, Does Ownership Matter?, Japanese Multinationals in Europe, London, Oxford University Press, 1994 Strange, Roger, Japanese Manufacturing Investment in Europe, Its Impact on the U.K Economy, London, Routledge, 1993 Sullivan, Jeremiah, Invasion of the Salarymen, the Japanese Business Presence in America, Westport, Praeger, 1992 Wickens, Peter, The Road to Nissan, Flexibility, Quality, Teamwork, London, Macmillan, 1987 Woronoff, Jon, Japan's Commercial Empire, London, Macmillan, and Armonk, M.E Sharpe, 1984 Aid Arase, David, Buying Power: The Political Economy of Japanese Foreign Aid, Boulder, Lynne Rienner, 1995 Ensign, Margee, Doing Good or Doing Well?, Japan's Foreign Aid Program, New York, Columbia University Press, 1993 Orr, Robert M., Jr., The Emergence of Japan's Foreign Aid Power, New York, Columbia University Press, 1991 Rix, Alan, Japan's Foreign Aid Challenge: Policy Reform and Aid Leadership, London, Routledge, 1993 Management Abegglen, James C , and Stalk, George, Jr., Kaisha, The Japanese Corporation, New York, Basic Books, 1985 Hayashi, Shuji, Culture and Management in Japan, Tokyo, University of Tokyo Press, 1989 Matsumoto, Koji, The Rise of The Japanese Corporate System, London, Kegan Paul, 1991 Morita, Akio, Made in Japan, Akio Morita and Sony, New York, E.P Dutton, 1986 Odaka Kunio, Japanese Management - A Forward-Looking Analysis, Tokyo, Asian Productivity Organization, 1986 Ouchi, William, Theory Z, Reading, Addison-Wesley, 1981 Pascale, Richard Tanner, and Athos, Anthony G., The Art of Japanese Management, New York, Simon & Schuster, 1981 Rafferty, Kevin, Inside Japan's Power Houses: The Culture, Mystique and Future of Japan's Greatest Corporations, London, Weidenfeld and Nicolson, 1995 278 Sato, Kazuo, and Hoshino, Yasuo, The Anatomy of Japanese Business, Armonk, M.E Sharpe, 1984 Sethi, S Prakash, Namiki, Nobuaki, and Swanson, Carl L., The False Promise of the Japanese Miracle, Boston, Pitman, 1984, Small and Medium Enterprise Agency, White Paper on Small and Medium Enterprises in Japan, Tokyo, annual Smitka, Michael J., Competitive Ties, Subcontracting in the Japanese Automotive Industry, Princeton, Princeton University Press, 1991 Woronoff, Jon, Japan's Management Mystique, Chicago, Probus, 1992 — — , The "No-Nonsense" Guide To Doing Business in Japan, Tokyo, Yohan, and London, Macmillan, 1992 Industrial Relations Chalmers, Norma J., Industrial Relations in Japan, The Peripheral Workforce, London, Routledge, 1989 Clark, Rodney, The Japanese Company, New Haven, Yale University Press, 1979 Cole, Robert E., Japanese Blue Collar: The Changing Tradition, Berkeley, University of California Press, 1971 , Work, Mobility, and Participation, Berkeley, University of California Press, 1979 Dore, Ronald P., British Factory, Japanese Factory, Berkeley, University of California Press, 1973 Hanami, Tadashi, Labor Relations in Japan Today, Tokyo, Kodansha International, 1979 Kamata, Satoshi, Japan in the Passing Lane, New York, Pantheon, 1982 Kawanishi, Hirosuke, Enterprise Unionism in Japan, London, Kegan Paul, 1991 Koike, Kazuo, Understanding Industrial Relations in Modern Japan, New York, St Martin's, 1988 Levine, Solomon B., and Kawada, Hisashi, Human Resources in Japanese Industrial Development, Princeton, Princeton University Press, 1991 Lincoln, James R., and Kalleberg, Arne L., Culture, Control and Commitment, Cambridge, Cambridge University Press, 1990 Rohlen, Thomas P., For Harmony and Strength, Berkeley, University of California Press, 1974 Schonberger, Richard J., Japanese Manufacturing Techniques, New York, Free Press, 1982 Sengoku, Tamotsu, Willing Workers: The Work Ethic in Japan, England, and the United States, Westport, Quorum, 1985 Shirai, Taishiro (ed.), Contemporary Industrial Relations in Japan, Madison, University of Wisconsin Press, 1983 Taira, Koji, Economic Development and the Labor Market in Japan, New York, Columbia University Press, 1968 279 Woronoff, Jon, Japan's Wasted Workers, Tokyo, Yohan, and New York, Rowman and Allenheld, 1981 10 Women Workers Brinton, Mary C , Women and the Economic Miracle, Berkeley, University of California Press, 1992 Cook, Alice, and Hayashi, Hiroko, Working Women in Japan: Discrimination, Resistance, and Reform, Ithaca, Cornell University Press, 1980 Kondo, Dorinne K., Crafting Selves, Chicago, University of Chicago Press, 1990 Lam, Alice, Women and Japanese Management, Discrimination and Reform, London, Routledge, 1992 Lo, Jeannie, Office Ladies, Factory Women, Armonk, M.E Sharpe, 1990 Ministry of Labor, White Paper on Women's Labor, Tokyo, annual Roberts, Glenda S., Staying on the Line: Blue-Collar Women in Contemporary Japan, Honolulu, University of Hawaii Press, 1994 Saso, Mary, Women in the Japanese Workplace, London, Hilary Shipman, 1990 11 Groupings and Associations Dodwell Marketing Consultants, Industrial Groupings in Japan, Tokyo, periodic Gerlach, Michael L., Alliance Capitalism: The Social Organization of Japanese Business, Berkeley, University of California Press, 1992 Johnson, Hazel J., The Banking Keiretsu, Chicago, Probus, 1993 Lynn, Leonard H., and McKeown, Timothy J., Organizing Business, Trade Associations in America and Japan, Washington, D.C., American Enterprise Institute, 1988 12 Culture, Society, Politics Allinson, Gary D., and Sone, Yasunori, Political Dynamics in Contemporary Japan, Ithaca, Cornell University Press, 1992 Anderson, Stephen J., Welfare Policy and Politics in Japan, New York, Paragon House, 1993 Calder, Kent E., Crisis and Compensation, Princeton, Princeton University Press, 1988 Campbell, John Creighton, How Policies Change, The Japanese Government and the Aging Society, Princeton, Princeton University Press, 1992 Economic Planning Agency, White Paper on National Life, Tokyo, annual 280 Fukutake, Tadashi, The Japanese Social Structure, Tokyo, University of Tokyo Press, 1982 , Japanese Society Today, Tokyo, University of Tokyo Press, 1981 Herzog, Peter J., Japan's Pseudo-Democracy, New York, New York University Press, 1993 Hidaka, Rokuro, The Price of Affluence, Tokyo, Kodansha International, 1984 Holstein, William J., The Japanese Power Game, New York, Scribners, 1990 Kumori, Shumpei, and Rosovsky, Henry, The Political Economy of Japan: Cultural and Social Dynamics, Stanford, Stanford University Press, 1992 Ministry of Labor, Survey of Japanese Employees' Life After Retirement, Tokyo, annual Nester, William R., European Power and the Japanese Challenge, London, Macmillan, 1993 Prime Minister's Office, Public Opinion Sur\>ey on Society and State, Tokyo, annual , Public Opinion Survey on The Life of The Nation, Tokyo, annual Rothacher, Albrecht, The Japanese Power Elite, London, Macmillan, 1993 Tabb, William K., The Postwar Japanese System, Cultural Economy and Economic Transformation, New York, Oxford University Press, 1995 Taylor, Jared, Shadows of the Rising Sun, New York, Quill, 1983 Thurow, Lester, Head to Head: The Coming Economic Battle Among Japan, Europe and America, New York, William Morrow, 1992 van Wolferen, Karel, The Enigma of Japanese Power, New York, Knopf, 1989 Vogel, Ezra, Japan As Number One, Cambridge, Harvard University Press, 1988 Woronoff, Jon, Japan As - Anything But - Number One, London, Macmillan, and Armonk, M.E Sharpe, 1991 , Japan: The Coming Social Crisis, Tokyo, Yohan, 1983 , Politics, The Japanese Way, London, Macmillan, and New York, St Martin's, 1988 Index Abegglen, James, 207, 209 administrative reform, 54, 97, 262 advanced countries, 25, 37, 76, 127, 141-2, 206, 227-8 agriculture, 67-8, 76, 78, 88-9, 92, 100, 123, 260, 263 aid, 34, 36-7 airlines, 121, 124 Allen, Deborah, 101 amenities, 131-2,224-5 Arai, Joji, 72 Asia, 29, 76, 101, 104, 223-4, 251, 256-9 automation, 80, 112 automobile industry, 49, 90, 121, 177-9, 253-5, 260 Bank of Japan, 38, 41, 51, 57, 237, 243, 245 banks, 50-1, 66, 90, 122, 199, 201, 243-5, 247-9 Bhagwati, Jagdish, 250-2 birth rate, 28, 138, 144 Blinder, Alan, 110,210-1 Board of Audit, 96-7 bubble economy, 31-2, 51-2, 122-3, 243-50, 265 bureaucrats, 40-1, 45-9, 57-8, 92-7, 110, 124, 214-6, 231-4, 246, 261-5, 268 businessmen, 45-9, 50-4, 94-5,97, 214-6, 231-4, 262-5, 268 Business Week, 24, 104 Chalmers, Norma, 72 China, 256, 259 companies, 68-72, 204-12, 248-50, 268 see also management company "family," 79-80, 155-60, 169-74 competition, 106-8, 113, 118, 122, 176 construction, 65-6, 77-8, 91-2, 123-4 consumers, 90, 115-20, 121-3, 163-5, 220, 226, 242, 253-6, 259 core system, 173-4, 208, 212 corruption, 52, 125, 197, 199, 201 cost of living, 26, 66-8,88-9, 100-1, 112, 115-21, 129,252 credit cards, 31,164-5 crisis, 11-22,219-41,265-70 281 282 Daiei, 259, 262 debt, personal, 164-5; national, 53-4, 97 decision-making, 82, 87-8, 232-3 declining sectors, 29-30, 40, 65, 108, 121, 256 defense, 34, 36, 96 Dentsu Institute of Human Studies, 163 deregulation, 51, 57, 96, 122, 261-5, 268 distribution, 55, 66-7, 77-8, 89-90, 92, 96, 117-20, 123, 171, 259-61, 264, 268-9 Doko, Toshiwo, 54 domestic demand, 30-1, 40-1, 57-8, 226, 259 Dore, Ronald, 36, 174, 179 Drucker, Peter, 40 dual economy, 70-2, 77 Economic Planning Agency (EPA), 23, 45-8, 128, 140, 165, 195, 252, 265 Economist, 40-1, 45, 58, 229, 242, 248, 266 education, 26, 83-4, 86, 95, 131, 205, 213-4 Electronics, 258-60 Emmott, Bill, 55, 58, 127, 140, 229, 251, 266-8 endaka (heavy yen), 30-1, 38, 57, 234, 243, 253-6, 268 Equal Employment Opportunity Law, 186-7 Europe, 25, 27, 33-4, 36-9,55-8,76-8, 88,99-101, 104, 111, 123, 131, 142, 189,202,206,223,231,255 exchange rates, 30-1, 38, 58, 99, 109, 117, 123, 233, 253-4, 259 exporting, 17, 29, 35-6, 38, 54-5, 57-8, 109, 226, 229, 233-4, 243, 251-7 Fair Trade Commission (FTC), 118-9, 263-^ family, 137, 143, 150, 162, 164-6, 189-90 finance, 66, 78, 122-3 Financial Times, 24, 39, 257 Fiscal Investment and Loan Program (FILP), 53 fiscal policy, 52-4 food costs, 100, 117, 123,251-2 Fukuda, Takeo, 214 generation gap, 138, 150-3, 159-66,226-7 geographic gaps, 16, 203-4 Germany, 26, 33-4, 100, 104, 111, 114, 133, 180, 191, 206, 222-3, 254 Gibney, Frank, 149-50 Great Britain, 100, 104, 114, 207, 223 Gregory, Gene, 155 growth, 11, 14-6, 23-6, 32-7, 47-8, 78, 99, 219-20, 224-6, 228, 230, 242, 265 283 Hakuhodo Institute of Life, 162 Hasegawa, Keitaro, 159 Hayashi, Hikaru, 162 healthcare, 141-2 hierarchy, 83-4, 170-3, 196, 202-6, 208-9, 212-7, 232-1 Hiraiwa Report, 262 Honda, 42,49, 107,253 Hong Kong, 25, 39, 223, 251, 256 honne (reality), 19, 143, 153 hours worked, 79, 82-3, 96, 132-7, 176-8, 184, 265 housing, 26, 100-1, 128-9, 132, 138, 142-3, 202-3, 265, 269 implosion, 22, 166, 235-6 importing, 251-4 Inamori, Kazuo, 264 income, 99-103, 164-5,201 Industrial Bank of Japan, 246 industrial policy, see targeting inequality, 13, 16-7, 19,51-2, 129, 195-217,227-8 inflation, 25-7, 102, 112, 114 Institute for International Economics, 252 International Labour Organization, 112 investment, 29, 41-2, 58-9, 109-10, 258-9 Ishikawa, Rokuro, 153, 165 Japanapologists, 7-8, 20, 23, 37-42, 45, 55, 57-8, 71-2, 127, 149-50, 155, 174-5, 179, 223-4, 229, 240-1, 250-2, 261 Japan Chamber of Commerce and Industry, 153, 165 Japan Development Bank (JDB), 105, 238 Japan Economic Journal, 31, 119, 237, 265 Japan Federation of Economic Organizations (Keidanren), 54, 262 Japan Federation of Employers Associations (Nikkeiren), 114, 207 Japan Productivity Council (JPC), 76-7 job-hopping, 159-60, 163 Johnson, Chalmers, 45 journalists, 20, 24, 29, 39, 40, 229, 240, 251, 266-8 Kahn, Herman, 23, 32 Kalleberg, Arne L., 175-6 Kamata, Satoshi, 177-9 Kansai Economic Federation, 203-4 karoshi (death from overwork), 184-5 keiretsu (groups), 55, 170, 204, 249, 263-4, 268 Kobayashi, Noritake, 110 284 Korea, 25, 29, 39, 56, 65, 128, 223, 251, 256-9 kudoka (hollowing), 29, 41, 256-8 Kyocera, 49, 210, 264 labor costs, 29, 76, 92, 227, 256 Labor Department (U.S.), 111 labor force, 92,95, 255, 268 land prices, 26, 30, 52, 101, 122-3, 132, 197-9, 213, 247 leisure, 101, 112, 134-9, 203, 265-6, 269 Liberal Democratic Party (LDP), 93-4, 265 "lifetime" employment, 85, 108, 111, 156-60, 170-3, 183-6, 188, 206, 268 Lincoln, James R., 175-6 loan sharks, 66 Macrae, Norman, 45-6, 50 Maekawa Plans, 57-8, 229, 233, 262 Management and Coordination Agency, 100, 128-9, 164 management system, 84-8, 104-10, 155-60, 169-92 manufacturing, 61-4, 76-8, 244, 249-50, 254-9, 269 market share, 105-9, 264, 268 Matsushita, 107, 210-1, 213, 215, 248 middle-class consciousness, 196-7, 203-4 Mieno, Yasushi, 245 Ministry of Agriculture, 88, 95-6, 261 Ministry of Finance (MOF), 45, 50-4, 95-6, 122-3, 242-3, 246-7, 261 Ministry of Health, 121, 261 Ministry of International Trade and Industry (MITI), 45,47-50, 57, 65, 71, 95-6, 109, 117-8, 120, 146, 261, 263 Ministry of Labor, 132, 180, 184 Ministry of Post and Telecommunications, 49, 121 Ministry of Transport, 49, 121, 261 monetary policy, 51-2 Morgan, James & Jeffrey, 169 Morita, Akio, 112, 195,264 Nakasone, Yasuhiro, 46-7, 54, 57, 215 Nakatani, Iwao, 104, 110 Nakauchi, Isao, 262 NEC, 107 nepotism, 214-5 Nevins, Thomas J., 169 newly industrialized countries (NICs), 25, 55, 72, 76, 256, 259 Nihon Keizai Shimbun, see Japan Economic Journal Nippon Telegraph and Telephone (NTT), 121-2, 124 Nixon shock, 29, 38 Nomura, 200 285 Occupation, 33-4 Odaka, Kunio, 85-6, 157-8, 181 Organization of Economic Cooperation and Development (OECD), 37, 76-7, 206 office ladies (OLs), 83, 89-90, 203 Ohta, Hajime, 81 oil crises, 30, 37-8, 65 old age, 140-8, 185-6, 206, 233, 268 Osano, Kenji,213 Ouchi, William, 155 overtime, 79, 112-3, 133, 265 people, 97, 102-3, 119-20, 2 ^ , 217, 221-2, 228, 231-2, 234-5 petrochemicals, 37, 49, 65, 121 planning, 45-8 Plaza Accord, 38, 57 politicians, 92-4, 97, 110, 124-5, 145-6, 201-2, 214-5, 231-4, 237-8, 263, 265 Prime Minister's Office, 134, 180, 237 productivity, 33, 62, 69, 72, 75-84, 88, 107, 112, 176-8 profitability, 69-70, 91, 104-10, 122, 255-6, 264 protectionism, foreign, 56, 226; Japanese, 55-6, 68, 116-7, 120, 251-4 public opinion polls, 21, 128, 134-5, 137-8, 140-1, 152, 160, 161-2, 164, 180-1, 184-5, 191-2, 195-6,236-7,266 public works, 51, 53, 124-5, 132, 225 quality control, 63, 79-82, 133, 177-8, 189 quality of life, 127-47,269 railways, 53, 97, 121, 124, 129-30 Reading, Brian, 266-7 real estate, 243-4, 246-9, 269 Recruit, 160 reform (economic), 260-5 Rengo, 101 revisionism, 7-8 salaryman, 19, 81-3, 136-8, 151-2, 172, 179-86 Sasaki, Hajime, 107 savings, 50-1, 142, 164-5 scandals, 52, 197,200 social security, 54, 142-6 services, 66-7, 90-2, 225-6 Shimomura, Osamu, 38-9 shipbuilding, 26, 65, 256 shokku (shocks), 28-32, 37 286 Singapore, 25, 223 Small and Medium Enterprise Agency, 70-1 small companies, 69-72, 77, 151, 204-6 Sony, 42, 49, 107, 112, 195, 248, 264 Stalk, George, 207 standard of living, 12, 100, 238 statistics, 13, 25-8, 33, 100, 103, 220 stock market, 30, 41, 52, 122, 198-201, 243-4, 246-9 subcontracting, 70-1, 77, 91, 157 Sugahara, Mariko, 164 Suzuki, Zenko, 214 Taiwan, 25, 39, 56, 65, 223, 251, 256 Takahashi, Nobuaki, 238 Takeda, Kunitaro, 88 Takeshita, Noburo, 54, 215 targeting, 47-50, 62, 65, 71, 116, 120-3, 220 tatemae (illusion), 19, 143, 150, 153 taxes, 53-4, 201-2, 213, 216, 225 technology, 35-6 tokkin accounts, 244 Tokyo, 18-9, 93, 100, 129, 203-4, 214 Towers Perrin, 207 Toyo Keizai, 88, 207 Toyoda, Shoichiro, 262 Toyota, 110, 176-9,215,262 trade friction, 17, 29-30, 36, 38-9, 54-9, 226, 228, 250-3 unemployment, 27-8, 113, 156, 255 United Nations, 186 United States, 26-7, 29-30, 33-6, 38-9, 53, 55-9, 68, 76-8, 88, 93, 99-101, 104, 114-5, 128, 131, 133, 142, 175-6, 180, 191,202,206-7,224,231, 245, 250-2, 255 Van Wolferen, Karel, 230 Vogel,Ezra, 155, 169 wages, 111-5, 155, 158-9, 164, 179, 183, 186, 197,205-7,227,245,255, 268 Wall Street Journal, 29 welfare, 12, 17, 28, 95, 113, 140-7, 225, 268 women, 81-3, 90, 112-3, 137-8, 157, 164, 172-3, 186-92, 205-6, 208, 235, 267 Wood, Christopher, 266-7 287 worker, blue-collar, 79-81, 172, 174-80, 189-90, 205; peripheral, 113, 142 156-7, 171-3, 204-6, 212; white-collar, 77-88, 172, 179-86, 189-90, 205, 208, 268 work will, 149-60,227,265 World Bank, 34 Yamaha, 107, 181 yen, 29-31, 242, 253-5, 258-9 see also exchange rates Yomiuri Shimbun, 102, 134 youth, 161-5, 180, 183,231,233-5 Zaiteku, 244 ... almost two decades ago, the idea of an economic crisis in Japan was deemed completely and utterly unrealistic Even when I wrote the first edition of The Japanese Economic Crisis, while it was regarded... either not see or not bother looking One reason why many foreigners (and also Japanese) are unaware of the extent of the crisis is that they not look in the right places They dote on high tech... that by 1975 the Japanese and most of the outside world—will be expecting Japan to enjoy another twenty-five years of much the same growth rates Or even if by 1975 the Japanese or others— no longer