JAPAN: A CASE STUDY

If the unending stream of immigrants from countries south of the border, from Central and South America, is mainly caused by economic reasons – where people are seeking better material lives – then what can be done about it?  The last posting suggested a program of investing in those countries with the attempt to turn those economies around.  The aim would be to modernize those economies and to demotivate their people from migrating to the United States.

            That posting suggested that a view of the history of Japan might give one insights into what a traditional country should do since that nation was traditional – in the 1800s – and today is a vibrant industrial/postindustrial nation.  Relying on the reporting of David Landes,[1] this review has established that the Japanese cultural character played a central role.

That is, they enjoyed strong domestic institutions such as family and community life which led to a sense of self-confidence.  In turn, that confidence made it non-threatening for them to seek information and contacts with the world’s industrial nations of that time.  With that information they were instructed about what to do and not do on their path toward modernization.

          And so, they did.  Here are some of the steps they initiated:

 

·       Hiring experts and technicians from industrial nations

·       Sent Japanese agents to industrial nations – in Europe and America – to garner whatever they could from their eyewitness experiences

·       Conducted extensive comparative analysis of the information and insights they acquired

·       Extended their research to military information – first heavily relying on the French model and then, after the Franco-Prussian War (1870-1871), the German model

·       Abandonment of feudalist form of governance (the rule of local lords) and adoption of a central form of governance

·       Adopted British style trade policies as modeled on the Navigation Acts in England that in earlier phases of industrialization instituted protective policies that were only lightened after their industry was soundly established

·       When their industry was established, again like Britain, instituted a more laissez-faire model

·       Under the leadership of Okubo Toshimichi, instilled a more disciplined, hardworking orientation to work and development – opting for a German orientation

·       And by utilizing comparative advantage opportunities, began efforts with light industrial products, small scale efforts such as cotton mills, wooden waterwheels, coal mining

 

All of these elements or steps led from small production to big production over long periods of developmental processes. Landes summarizes these processes as follows:

 

But the long haul to parity needed not so much money as people – people of imagination and initiative, people who understood economies of scale, who knew not only production methods and machinery but also organization and what we now call software.  The capital would follow and grow.

            The Japanese determined to go beyond consumer goods.  If they were to have a modern economy, they had to master the heavy work:  to build machines and engines, ships and locomotives, railroads and ports and shipyards.  The government played a critical role here, financing reconnaissance abroad, bringing in foreign experts, building installations, and subsidizing commercial ventures.  But more important were the talent and determination of Japanese patriots, ready to change careers in the national cause, and the quality of Japanese workers, especially artisans, with skills honed and attitudes shaped by close teamwork and supervision in craft shops.[2]

 

Landes characterizes all this as the Japanese version of Weber’s Protestant ethic.  That would be their form of a culturally based human capital foundation.

          Given the initial question – can Latin countries south of the American border develop viable, modern economies? – does the Japanese example answer or help answer that question?  The opinion here is that it does not or does not very much but does give one insight as to what is involved.  For one thing, no one is arguing that those Latin countries become industrial powerhouses, but that they become viable economies capable of providing employment and opportunities for the bulk of their populations.

            With that more modest aim, the blogger believes the Japanese example can offer some insight.  And to begin with is a recognition that culture indeed does matter and that those in charge of any policy changes in this field need to be sensitive and knowledgeable about the cultural factors involved. 

The path to the ideal, whatever that is, will be complex and involved.  As with the Japanese, having the productive motives that the Japanese exhibited, the necessary capital will follow.  And a bit of advice: the efforts should begin with those who took it upon themselves to make the trip to the US – they have demonstrated gumption, bravery, and energy to improve their conditions.  These are qualities a nation can exploit – even hold as essential – in any attempt to improve their economic standing.

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[1] David Landes, “Culture Makes Almost All the Difference,” in Culture Matters:  How Values Shape Human Progress, eds. Lawrence E. Harrison and Samuel P. Huntington (New York, NY:  Basic Books), 2-13.  Factual claims of this posting based on this source.

[2] Ibid., 9-10.