Reprogramming Japan: The High Tech Crisis under Communitarian Capitalism

Reprogramming Japan: The High Tech Crisis under Communitarian Capitalism

Marie Anchordoguy - Professor of East Asian Studies, Chair, Japan Studies Program, University of Washington

Monday, September 25, 2006 - 5:30pm to 7:00pm
Room 217A, Hall of Graduate Studies (HGS) See map
320 York Street
New Haven, CT 6511

Marie Anchordoguy will talk about the arguments in her recent book, Reprogramming Japan: The High Tech Crisis under Communitarian Capitalism. The book explores the nature of Japan’s capitalist system and how this system has contributed to both the rise and the stagnation of Japan’s high tech sector. The book argues that Japan’s capitalist system is communitarian in nature. By communitarian capitalism, she means a quasi-socialist system with an activist state that works together with the private sector to nurture economic development but also promote social stability, equitable treatment of citizens, national autonomy, and technological self-sufficiency.

The book shows how communitarian capitalism contributed to the rapid development of Japan’s high tech electronics industries-telecommunications, computer hardware and software, and semiconductors. More specifically, it shows how the institutions and policies that emerged during and after World War II to maintain communitarian norms, such as the lifetime employment system, seniority-based wages, enterprise unions, a centralized credit-based financial system, industrial groups, the main bank corporate governance system, and industrial policies, helped promote these industries under the conditions that existed up until the 1980s. But when conditions changed in the 1980s and 1990s, these institutions and policies became ineffective. They were out of sync with what the economy needed in a new environment, one in which technological change was rapid and unpredictable and foreign products could no longer be legally reverse-engineered.

Once the economic crisis became acute in the late 1990s and early 2000s, the bureaucracy and corporate leaders started to vigorously contest and modify key institutions and practices. The result has been slow, incremental change, such as a move toward merit-based wages and outside directors, a decline in long-term buyer-supplier and cross-shareholding ties among firms in industrial groups, greater diversity of corporate and product strategies among firms in a given industry, and increased acceptance of foreign investment. Rather than changing at different times according to their own specific strengths and weaknesses, firms and the state have made similar changes at around the same time.