A HISTORICAL PERSPECTIVE OF THE GLOBAL ECONOMY

A Historical Perspective of the Global Economy

A Historical Perspective of the Global Economy

Introduction

Over the last 20 years, Japan has passed from wunderkind of global capitalism to problem child, troubled by recession and stagnation. Marie Anchordoguy's Reprogramming Japan joins the growing body of analysis diagnosing this sad falling off, focusing on the crisis of the high-technology sectors where silicon samurai once seemed to reign supreme. In Anchordoguy's view, the cause of the problem is “communitarian capitalism.” This is a capitalism that depends heavily on state direction—governmental support for select large firms, a social contract assuring citizens permanent employment, regular wage increases, and union-management deals for labor peace.

This, she suggests, is something verging on socialism. Although it has “all the trappings of private property and profit-making institutions,” the dynamism of the market is constrained by a system that “favor[s] social stability over efficiency” (p. 7). It is, in her view, “quasi-capitalism” (p. 7). Communitarian capitalism, she argues, laid the basis for Japanese success from the 1950s through the 1970s, when global economic conditions were positive, technological trajectories were clear, and foreign products could be reverse-engineered. But in the 1980s and 1990s, intensified competition, transnational outsourcing, and fiercely enforced intellectual property rights made this system a fetter on the very forces of production it had fostered.

Discussion

Over the last decade or so, elaborate theoretical and empirical analyses of 'varieties of capitalism' have been developed, mainly to contrast Anglo-American models with those in East Asia and - especially - Europe. Corporate governance, broadly defined as relations among a range of stakeholders in firms, provides a useful focal point in testing and refining these analyses, especially in relation to Japan and the issue of convergence or divergence on Anglo-American models. Parts II-IV of this paper apply principal-agent theory to identify ...