Japanese Neomercantilism: Continuities and Changes

Abstract

Although most scholars agree that Japan’s economy is based on neomercantilist rather than neoclassical principles, there are still some who maintain Japan’s markets are free. Not surprisedly, virtually all Japanese official and unofficial spokesmen continue to drumbeat that claim. Typical were the remarks of Nokutoshi Akao, Japan’s then Economic Planning Agency (EPA) head, who told an American audience in August 1989 that the economies of both the United States and Japan “had prospered due to the free enterprise system”, and then made the extraordinary claim that rice is the only product protected by Japanese import barriers.¹ Although such rhetoric is easily dismissed, similar claims by noted international scholars must be taken much more seriously. For example, Hugh Patrick “interprets Japanese economic performance as due primarily to the actions and efforts of private individuals and enterprises responding to the opportunities provided in quite free markets for commodities and labor. While the government has been supportive and indeed has done much to create the environment of growth, its role has often been exaggerated”.² Chen, referring to Japan and the NIEs, declares that “state intervention is largely absent. What the state has provided is a suitable environment for the entrepreneurs to perform their functions”.³