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VYTAUTAS MAGNUS UNIVERSITY Aivaras Aronas Smolenskas the Differences Between US' Western and Japan's Collective Forms Of VYTAUTAS MAGNUS UNIVERSITY FACULTY OF HUMANITIES DEPARTMENT OF CULTURAL STUDIES Aivaras Aronas Smolenskas The Differences between US’ Western and Japan’s Collective Forms of Capitalism, 1945-2020: A Comparative Analysis Final Master’s Thesis East Asia Region Studies programme, Code 6211JX054 Field of Studies: Political Science Supervisor: Dr. Linas Didvalis _______ ___________ (scientific degree, name, surname) (signature) (date) Defended: Assoc. Prof. Dr. R. Eidukevičienė _______ ___________ (Dean of the faculty) (signature) (date) Kaunas, 2020 Table of Contents Santrauka ............................................................................................................................................. 3 Summary .............................................................................................................................................. 4 List of Abbreviations ........................................................................................................................... 5 Introduction ......................................................................................................................................... 6 1. Western and Collective Capitalism: Features and Historical Context .......................................... 12 1.1 Max Weber’s Theory of the Inception and Development of Capitalism ................................. 13 1.2 An Alternative Approach: Continuation Instead of Opposition .............................................. 16 1.3 Economic Liberalism and Marxism ......................................................................................... 19 1.4 The Theory of Japan’s Collective Capitalism .......................................................................... 21 1.5 The Essential Features of Capitalism ....................................................................................... 24 2. The Development of Capitalism in Japan...................................................................................... 30 2.1 Post-War Economic Situation in Japan ................................................................................... 31 2.2 Japan’s Central Bank and “Window Guidance” ...................................................................... 32 2.3 The Financial Bubble of the 1980s .......................................................................................... 33 2.4 The Burst of the Financial Bubble ........................................................................................... 35 2.5 End of Recession, Economic Resurgence and Present-Day Economics in Japan ................... 36 3. The Development of Capitalism in the US .................................................................................... 40 3.1 The Economy of Post-War US ................................................................................................ 41 3.2 The Economic Inconsistencies of the 1950s and 1960s .......................................................... 43 3.3 US Global Economic Reach and Further Development of Western Capitalism ..................... 45 4. Western Capitalism VS Japanese Capitalism: Key Differences and Takeaways .......................... 48 4.1 The Concept of a “Free Market” in Japan and the US ............................................................. 49 4.2 The Outlook on Wage Labour in the US and Japan ................................................................ 51 4.3 The Outlook on Accumulation of Wealth in US and Japan .................................................... 54 4.4 Market Competitiveness in the US and Japan ......................................................................... 56 4.5 The Outlook on Possession of Private Property in the US and Japan ..................................... 59 4.6 The Main Reasons for the Differences between US’ Western and Japanese Collective Forms of Capitalism .................................................................................................................................. 62 Conclusions ....................................................................................................................................... 66 Literature List .................................................................................................................................... 68 Source List ......................................................................................................................................... 70 Visual Resource List .......................................................................................................................... 82 Santrauka Nors po Antrojo Pasaulinio karo Japonija susidūrė su daug skirtingų įšukių, istorija rodo jog ši šalis sugebėjo sukurti stabilią ir klestinčią ekonomiką pakankamai greitai, ir laikui bėgant tapo viena iš stipriausių ekonominių galių visame pasaulyje. 1960-aisiais amerikiečių ekonomistas Gardineris Meansas sugalvojo terminą „kolektyvinis kapitalizmas“ – šis terminas skirtas apibūdinti unikalią kapitalizmo formą, kuri gali būti pastebima tiek Japonijos ekonomikos istorijoje, tiek šios šalies prieigoje prie kapitalizmo idėjų. Kadangi Japonija perėmė kapitalizmo tendencijas iš JAV, natūralu jog galima pastebėti konkrečius faktorius, kurie lėmė unikalią Japonijos prieigą prie šios ekonominės sistemos – faktorius kurie galiausiai leido Japonijai tapti šių dienų ekonomine milžine. Šio darbo tikslas yra rasti esminius skirtumus tarp JAV ir Japonijos kapitalizmo formų ir išskirti objektyvias, faktais remtinas priežastis dėl šių skirtumo egzistavimo. Tyrimas suskirstytas į tris skirtingus uždavinius – visi jie reikalingi norint pilnai suvokti ir išvystyti darbo tikslą. Pirmasis uždavinys – pristatyti ir apibūdinti „vakarietiško kapitalizmo“ ir „kolektyvinio kapitalizmo“ terminus bei adresuoti tam tikrus šiuos terminus supančius niuansus. Antrasis tikslas – pristatyti ir aptarti kapitalizmo plėtrą Japonijoje ir JAV, remiantis abiejų šalių istoriniais ekonomikos kontekstais. Trečiasis uždavinys – sulyginti abi kapitalizmo formas lyginamosios analizės principu norint rasti esminius jų skirtumus, pasinaudojant ankstesniuose skyriuose pateiktais kriterijais, bei aptarti galimas šių skirtumų priežastis. Tyrimas atskleidė, jog nors abi šalys disponuoja visais esminiais kapitalizmo aspektais, jų pozicija atsižvelgiant į kiekvieną iš jų skirtinga. Taipogi pastebima, jog pagrindiniai kriterijai, kurie lemia šiuos skirtumus, Japonijos atžvilgiu yra susiję su šios valstybės kultūriniu kontekstu, politiniais painumais, socialinėmis problemomis ir unikalia ekonomine istorija. 3 Summary Even though Japan faced a lot of hardships after World War II, history would come to show that the country managed to establish a stable and successful economy relatively quick, and went on to become one of the leading economic powers of the world. In the 1960s, an American economist Gardiner Means coined the term “collective capitalism” – a form of capitalism used to describe the uniqueness of both Japan’s economic history, and the country’s take on capitalism, in general. With Japan adapting its capitalistic tendencies from the US, it is only natural that there were some significant factors that came into play within the country in regards to it developing its own form of capitalism – factors that would lead Japan to become a modern-day economic giant. The aim of the thesis is to find the core differences between the US’ and Japan’s forms of capitalism, and to establish objective, factually-backed reasoning for the existence of these differences, in the first place. The research is divided into three separate tasks, each of them being fundamentally necessary in order to fully grasp and develop the aim of the thesis. The first task is to describe the terms of “Western capitalism” and “collective capitalism”, and address some of the nuances regarding the two terms. The second task is to present, discuss and elaborate on the development of capitalism in both Japan and the US, via the lens of the historic context of the economies of both countries. The third task is to juxtapose, compare and contrast the two forms of capitalism found in the US and Japan in order to find their fundamental differences, utilizing the criteria established in the previous chapters, and to then discuss the possible reasons for the existence of these differences. The comparative analysis revealed that while both countries do possess and display all of the core aspects of capitalism, their positions regarding each of them differ, to a lesser or more major extents. It is also evident that the main factors that influence these differences from Japan’s perspective have to do with the country’s cultural context, its political intricacies and some social issues, in addition to a unique economic history. 4 List of Abbreviations BoJ – Bank of Japan GDP – Gross Domestic Product IPRI – International Property Rights Index LDP – Liberal Democratic Party MoF – Ministry of Finance NPISHs – Non-Profit Institutions Serving Households OPEC – Organization of the Petroleum Exporting Countries The UK – the United Kingdom The US – the United States of America WWII – World War II 5 Introduction In today’s world, when the term “Japanese economy” is mentioned, most tend to associate it with free-market capitalism and a highly-developed, political economic culture. The country’s economy is the third-largest in the world, with its nominal gross domestic product (GDP) surpassing that of Canada, Germany and the United Kingdom (UK).1
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