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Japan's Capitalism: Creative Defeat and Beyond.

Professor Tsuru "mattered" at the highest levels for his country's economic policymaking as a young man in his middle 30s, during the "New Deal" phase of the American Occupation and especially during the Katayama (Socialist) cabinet of 1947-48. As Director of the Economic Stabilization Board and as President of Hitotsubashi University he was by all odds the single most important Japanese economist in Japan, thanks to his mastery of Marxian and Keynesian economics, his command of English, an American education culminating in a Harvard doctorate, and his record of opposition to Japanese militarism and imperialism. With the subsequent "reverse course" and eventual ending of the Occupation followed by an unbroken succession of conservative cabinets in post-Occupation Japan, Tsuru continues to matter, but to matter somewhat less than he once did. He is a--but seldom the--spokesman for the Japanese Left Opposition in economic matters. (Professor Mark Perlman of Pittsburgh provides a biographical introduction to Tsuru and his work at pp. 267-70 of Japan's Capitalism.) Japan's Capitalism is the product of at least five years of Tsuru's later life, thought, and study, beginning in 1986 and ending apparently in 1991. Despite its title, it is concerned hardly at all with the nature and significance of the various similarities and differences between capitalism in Japan and capitalism in other countries. Instead, it gives the impression of combining two shorter books into a single longer one. Chapters 1-4 form an excellent if seldom "neutral" account of Japan's postwar economic history, from the Surrender of 1945 through recovery and "economic miracle" to its apogee in 1971. Chapters 6-8 provide diagnoses of and prescriptions for Japan's contemporary economic problems as Tsuru sees them: environmental pollution and the quality of life; the use of Japan's corporate surpluses; the planning of a welfare-maximizing convergence between market capitalism and socialist planning. Chapter 5, primarily on the oil shocks of the 1970s, is a bridge between the four earlier chapters and the three later ones.

Where many other writers would exaggerate their own originalities, Tsuru prides himself on his intellectual debts. His principal creditors are clearly Marx, Keynes, and Schumpeter; somewhat less significant are Boulding, Leontief, Kaldor, Sweezy, and Tinbergen. (This octet does not harmonize easily!) Had Tsuru been an Italian rather than a Japanese, had he been a product of the English Cambridge in the 1960s rather than the American one a generation earlier, he might conceivably have become a reasonably orthodox neo-Keynesian. He appears instead as a transplanted New Dealer and "indicative planner" who has set up his input-output tables in the "wrong" country. (But America would have been even worse! Witch-hunted for alleged pro-Communism, Tsuru found U.S. visas difficult and sometimes impossible to obtain in the McCarthy period of the 1950s.)

This reviewer found Tsuru's first four chapters the most interesting, particularly Chapter 4 on "The Role of the Government in the High Growth Period." He disdains participation in the somewhat sterile debate between partisans of MITI and of the market--which was the dog in the overall growth process, and which the tail the dog was wagging? Instead, Tsuru concentrates on historical details, citing case after case in which this or that public agency took specific steps in aid of this or that industry's rise from provincial backwardness to international prominence. He also traces the evolution of "administrative guidance" from mugifumi to yamagoya: "The first stage is the practice of strengthening young wheat plants by treading upon overgrown roots. The second stage is the providing of shelters which have the effect of inducing climbers to become more adventurous," or more pedantically, the "socialization of risk and uncertainty."

Tsuru gives us neither a propaganda broadsheet nor a tract for the times, but his personal views and preferences are seldom in doubt. His particular devils include Premier Shigeru Yoshida in Japanese politics and Milton Friedman in economic analysis. He thinks the "unification" of the yen dollar exchange rate at 360-1 came much too soon on the basis of inadequate information, and that only the Korean War kept the Occupation's disinflationary "Dodge Line" from strangling Japanese recovery in 1949-50. He believes that market competition is often "excessive," and that is sometimes better for wise men (or even for bureaucrats) to prescribe what is to be done than to permit the man in the street to make his own mistakes and waste scarce social capital. To an old reactionary like myself, Tsuru's vision of convergence as preferable to Japan's version of capitalism appears to be rather more than 50 percent socialist planning. But many an orthodox Stalinist, Maoist, or Fascist would doubtless reach an opposite conclusion and write Tsuru off as just another liberal reformer.

Tsuru keeps his formal economic analysis to a minimum. None of it is "standard Marxism" and much of it is hidden away in footnotes and appendices. His book is usable for undergraduate-textbook purposes, if instructors are willing to fill in analytical gaps, or if they are convinced--as Tsuru himself may now be--that economic analysis above the "Principles" level is largely a waste of time for any but its own aficionados.

Martin Bronfenbrenner Duke University
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Author:Bronfenbrenner, Martin
Publication:Southern Economic Journal
Article Type:Review
Date:Jan 1, 1994
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