The Political Economy of Japan Bradley M. RICHARDSON

Japanese economic and industrial performance also reflected the influenceof variables not clearly subject to the direct control of government. Japanesecompanies have often competed intensely for market share which in turn favoredlong-range planning and investment. A very high national savings ratio was itself ofvital importance as a support for capital investment and growth and usually wassufficient to provide the funds needed for capital expansion. Even though the imageof the Japanese worker as a docile, highly motivated producer is overdrawn, labor'srole in growth was itself far from insignificant. The permanent employment system inlarge corporations encouraged development of workplace discipline and strongcompany loyalties. The presence of enterprise rather than industry unions in theprivate sector was one of several factors encouraging stable labor conditions.Improved process technologies such as the highly touted "just in time" autoparts supply system have also made a big contribution to production efficiency and togrowth, Japan's educational system was itself undoubtedly a major factorencouraging growth. On the supply side, it provided for high levels of literacy andbasic mathematics and science training, which ensured a high quality labor force,other things being equal. On the demand side, mass education is one of manyfactors in the development of modem communications systems and consumermarketdevelopment.All of this is not to say that the Japanese government played no role in theeconomy's success. The government was usually a participant in high leveldiscussions of growth potentials and provided leadership for growth at a time whenprivate firms also saw that growth was both possible and profitable. The governmentwas, in effect, a cheerleader for growth, and shared vast amounts of information withindustry in the process. The government also provided a stable and supportiveenvironment for business growth. Businesses could invest without undue fear ofeither nationalization of industries (as favored by the opposition in the 1950s) or othermajor changes in the political environment. Government bank loans and policies alsocreated the perception in many firms that the government would stand behindparticular industries, which led firms in turn to make "daring" investments accordingto some accounts.The total effect of these conditions was to create a "policy regime" whichfavored growth. Japanese government development of industrial zones adjacent todeep water ports has also helped reduce the prices of some raw materials to as littleas one half of comparable prices in the United States, with its higher costs due todependence on land transportation (119). Indeed, the Japanese government'sinvestments in infra-structure have been enormous and may constitute its singlemost important contribution to growth from the 1960s forward.