Hadisami8

We all know Japan was an extremely powerful economic player in the late 80s, but how did they get to the stage after WW2? I know America put some money into them but not enough for them to become so rich. And from what i've read, Japan seems to have little natural resources and not much land for agriculture. How is the population so large? (I know that it's declining but it's still pretty big)

Also why did Japan's economy slump in the early 90s? I'm not too great with economics (would like to get better) so please don't be too complicated.

whalebreath

Hard work and lots of it.

Lucius

See Arthur Deming.

http://books.google.ca/books?id=4tPl...Method&f=false

Larrey

After the war they did what the Chinese have been doing after them — making cheap crap for export while paying low wages. That phase lasted until about the 60's, when Japan entered what's called the middle-income phase — also called "the middle income trap", i.e. a point where you no longer can brow your economy by underbidding other nations in wages, so you have to switch to producing things of greater quality, and things that are actually new if you want to sell them abroad. The Chinese are right now looking at trying to make this shift (which is not a given it will succeed). The Japanese successfully made this shift in the 1970's, when they released a bunch of new, quality consumer products on the world. This meant as late as the 1960's "Made in Japan" was a byword for cheap and shoddy build-quality, while by the 1980's "Made in Japan" signalled quality and cutting edge technology.

Why and how Japan then around 1990 lost what looked like a solid economic dominance is actually instructive. The export oriented Japanese economy, protecting its domestic market from foreign competition while exporting massively, led to a massive real-estate bubble. At some point just the land in Tokyo the Imperial palace is located on had an on paper real-estate value higher than the entirity of California. At the time not a few thought this a sign of further Japanese awsome, when in reality it was sign that things were rotten in the Japanese economy. The bubbl popped in 1990 and Japan got a huge economic slump. That it since then has proven itself more or less unable to get out of its rut of slow growth isn't quite the same thing. It is still a high-income nation in par with the US, Europe etc. It's just not looking like an unstoppable economic powerhouse, like it did in the 1980's.

infestør

the same happened with ex-axis countries like italy (il miracolo economico) and germany(Wirtschaftswunder), too. they had limited army that didn't eat from the budget and hard work. but japan takes the 1st place in hard work. those guys work insanely long hours (especially sarariman and blue collar).

Larrey

We — that is the industrialised western economies to come out of WWII — all had those kinds of post-war booms, that is all the economically developed nations. Nothing really to do with Axis or non axis.

And while the Japanese work lots, they don't necessarily always work smart and efficiently.

Jhangora

I did read Akio Morita's autobiography Made in Japan more than a decade back and it seems what you are saying is true. He had to work hard to make the Japanese products sell in the US initially.

From what I can remember the Americans had big homes at that time and liked everything big. However, Akio Morita had faith that the Americans will want a second smaller radio for their kids and so on. I guess there was some trouble with the oil prices in the early 70's and that made small Japanese cars popular in the US and Western Europe.

I guess ultimately it is a matter of moving on with the times. Nowadays, Korean products - electronics + cars seem to be doing well in India as compared to the Japanese ones. However, I try and buy Chinese - to show solidarity with my comrades across the border.

I am no expert in economics but I think the Japanese, S Korean, and the Chinese mentality is primarily defensive - an undervalued currency, too much dependence on exports to the West, high savings rate.

Naomasa298

I do wish the Japanese currency was undervalued - then my forthcoming holiday wouldn't be so expensive.

Unfortunately, it isn't - investors seeking a safe haven away from the turmoil of the Euro and the dollar have gone to currencies like the yen, making it stronger than it would otherwise be. In the last 4 years or so, it has risen in value by nearly a third compared to the pound.

Jhangora

Yes, the Japanese currency has risen in the past few years. However, the boom was led by an intentionally undervalued currency - in order to make the exports cheaper. I guess the same route was followed by S Korea and China.

I guess the limitations are also imposed by the limited land area. I have respect for the Japanese and really like the concept of Kaizen. But let's face it - S Korea and China have beaten Japan @ its game.

Looking forward, I think the best way out for Japan is to have a common currency with S Korea and China. However, due to historical mutual suspicion it seems tough.

civfanatic

So, the people in Third World/undeveloped countries are poor because they are lazy?