Critique of an Article - Postwar Japanese Economy - Term Paper Example

One of these events is the first globalization wave of 1870s that was attributed to the international gold standards as well as international treaties related to tariffs. Furthermore, the downturn associated with second globalization wave of 1914 caused by the occurrence of World War I, and downfall of international gold standard contributed to adverse conditions in the Japanese postwar economy1. Based on the globalization perspective, the exceptional performance of the Japanese economy that occurred earlier than 1970s is attributable to an institutional evolution of economic system in Japan that begun in the early 1930s to address the downturn associated with the second globalization wave.

In the postwar period, the evolutionary process modified the Japanese economy system to address various challenges related to the novel international environment. The underlying principles of the Japanese economic system devised by this institutional evolution were stability and coordination. As a result, it stirred aggressive corporate investments, upheld a high level of employment based on an approach of total employment, and stimulated bank lending by establishing excessive competition. However, the strong coordination of Japanese economic system resulted to weak control as well as monitoring.

In addition, high stability of the system caused low capacity to upgrade Japan’s economic structure2. In addition to the chronological account of Japan’s economy, Tsutsui provides a specific focus in various attributes of Japan’s economy, including postwar recovery, stagnation, reversal, high growth, as well as reform versus recovery. In the context of postwar recovery, democratic reforms in Japan and shortages of materials along with the resulting hyperinflation caused significant effects on Japanese economy.

These occurrences resulted to changes in the structure of the Japanese economy. The underproduction resulting from overuse and destruction of production equipment during the war was a significant challenge encountered by Japanese postwar economy. In addition, postwar repatriation of civilian and military Japanese from overseas caused a rapid increase of domestic demand for services as well as goods, though the production of Japan had significantly decreased, especially due to loss of colonies that provided materials and labor.

As a result, Japanese postwar economy faced an inevitable hyperinflation. To cope with this problem, Japanese government adopted the priority production program that encouraged production using limited resources in the iron, coal, fertilizer, and fertilizer industries3. The philosophies and strategies constituted in this program led to substantial development in Japanese postwar economy with the prioritization of production and minimization of consumption, and supersession of class-consciousness to promote national unity.

National economic independence was upheld at the expense of attracting foreign investments, and economic growth became highly regarded than sustainability. According to Tsutsui (2009), Japan underwent a high economy growth era between 1955 and 1973, which was characterized by major structural adjustment, and an exceptional record of 4.1 percent, average annual growth. The high growth was attributed to Japanese industrial policy because of its significant influence