The Japan Problem: Economic Challenge or Strategic Threat?

Abstract

Japan is the fourth nation in the modern world economy to capture a substantial fraction of world trade in a very short period of time and thereby upset the global economic status quo.¹ In the early 19th century, following the conclusion of the Napoleonic Wars and continuing late into the century, British industry and exports expanded rapidly and overwhelmed foreign competitors. Subsequently, towards the end of the century, Germany, following its political unification and industrialisation, rapidly expanded as an industrial and trading power. Almost at the same time and especially in the early 20th century, the United States accelerated its drive to become the world’s foremost industrial and trading nation. In each case these aggressive export drives caused immense economic dislocations and adjustment problems in other countries. Denunciation of the predatory trading practices of the British, Germans, and the Americans proliferated under such titles as The German Problem and The American Problem. These powerful economic and political reactions in other countries intensified economic nationalism, economic conflict and political hostility.