The Causes of Japan’s Economic Progress

Abstract

The several periods of rapid economic growth which Japan has experienced during her modern history have always taken the world by surprise. Even the Japanese themselves have, on occasion, been astonished at their recurrent good fortune. This is certainly true of the postwar period. Ten years ago, even eight years ago, Japanese businessmen, officials and economists surveyed their industrial and commercial prospects with apprehension. They spoke of their country as a high-cost, ‘marginal’ supplier of goods. The economy, they said, was exceptionally vulnerable to any recession in international trade and rested upon precarious sources of income. The outside world took the same pessimistic view. Yet the succeeding period witnessed one of the most remarkable economic advances in history, and everywhere observers are casting about for plausible explanations. Is the development firmly based and can one expect it to continue at the same rate? What importance should be attached to fortuitous causes? To what extent can an identity with previous periods of rapid growth be detected, or have quite new factors been mainly responsible?

First published in the Three Banks Review No. 55 (September 1962), under the title of ‘The Causes of Japan’s Economic Growth’.