Page 204 - Global Political Economy_Understanding The International Economic Order

SYS TEMS O F POLI TICAL ECONO MY
Meaningful deregulation of the Japanese economy will be ex-
tremely difficult to achieve. The power of domestic interests that seek
protection and the emphasis on social harmony and safeguarding the
weak have contributed to overregulation. Reform and deregulation
would entail closing thousands of firms and putting hundreds of
thousands of Japanese out of work; therefore, it is almost a certainty
that public and vested interests will remain overwhelmingly opposed
to such action. Moreover, as deregulation would weaken the power
of the Ministry of Finance and other powerful bureaucracies, these
agencies would also oppose any drastic reforms. It is instructive to
note that the Japanese have a quite different concept of deregulation
than does the United States. Whereas Americans interpret “deregula-
tion” to mean the elimination of rules and regulators, the Japanese
word for deregulation (kisei kanwa) means “relaxation of regulation”
and not elimination. 57 Even though the rules may be changed, the
Japanese bureaucracy will still attempt to regulate the system. Never-
theless, the task of regulation has become increasingly difficult as Jap-
anese firms have become more powerful and as success in catching
upwith Western technology has led to a diminished role for central
planning and bureaucratic control. As the Japanese are well aware,
they must become technological innovators, and this requires some
drastic changes in their society.
Most American economists and public officials believe that the so-
lution to Japan’s economic problems is to transform Japan into an
American-type of free-market economy. However, the Japanese, like
other Asians and most continental Europeans, are fearful of the possi-
ble consequences of adopting completely the American shareholder
system. Most Japanese and Europeans reject the “Anglo-Saxoniza-
tion” of the economy as a threat to social peace and, in the case of
the Japanese, to economic/political independence. Japanese society,
they fear, would be torn apart by the ruthlessness considered typical
of the American economy and its toleration of high levels of economic
insecurity and a large number of losers. For these reasons, Japan
strongly resists conversion to the American economic model. More
importantly, changing Japan into a Western-style economy would en-
tail a fundamental shift in the relationships between individuals and
society; there would have to be much greater emphasis on individual-
ism, and some of the tight social bonds that are so characteristic of
Japanese society would have to be weakened. These hurdles mean

57
Bernstein, “Japanese Capitalism,” 484.
191