MITI and the Japanese Miracle

The book MITI and the japanese Miracle by Chalmers Johnson should be considered the classic of contemporary historical and economical studies because it signifi rattly contributes the palm by examining and analyzing developmental defers. In particular, Johnson discusses economic development strategies of East Asiatic country lacquer. Nowa age Japans parsimoniousness is swiftly maturation and in future Japan is very likely to achieve trail positions on the world scale.Therefore, the author decided to provide detailed overview of Japan economic development how un essential country managed to improve economic positions and beat very influential. I think that book is very informative and analytic because the author doesnt tend to be dry and technical. Actu eachy, the book is a well-written and coherent novel. The book highlights past details with new expressiveness.It is necessary to draught that Johnson depicts the discourse of Japanese economy in terms of mercantilism. Jo hnson demesnes that the Japanese economy is labeled as mercantilist after anti-trade economies of Spain and Portugal have been attacked by Adam Smith. Thus, Johnson developed more exact political-economic baby-sit of capitalist development state.Japanese economy was characterized by suppression of consumption, supervision of domestic industries, and funneling savings into business development. Johnson provides overview of the narrative of MITI stressing that it is central to political and economic history of Japan. He argues that mercantilism seemed to be vanished long before the economics took shape. In opposite words, mercantilism cant be defined as operating economic hypothesis as it was simply pragmatic adaptation.Mercantilism is claimed to anticipate and even to diverge marketplace concepts and signals. The goal of mercantilism is to channel the resources to selected sectors pursuing the interests of elite groups and muscular figures. App atomic number 18ntly, mercanti lism resulted in income discrimination. Johnson cites economists who state that mercantilism is nothing more than termination of market efficiency.Market should be more efficient that the wisdom of the state, Johnson assumes. as well as mercantilism affects resource allocation leading to rent-seeking distortions. So, mercantilism is associated to do defile rather than to provide benefits for economic development and field wealth.The author asserts that resource allocation shouldnt be guided by the state because its occasion is to provide overall good and to respond adequately to market threats and opportunities. This gentle of role is labeled as regulatory state. For example, Great Britain and the United States of the States are regulatory state.According to Johnson, the task of regulatory state is to mountain rule aimed at governing competition, investment opportunities, pricing policies, entries and exits, and many other market functions. This process is called economic reg ulation. It is noted that economic regulation should work a framework for market operation and should respond to problems and failures of market.Johnson examines Japan as developmental states and says that economic regulation in the country goes beyond the market maintenance. In developmental state the primary mission is to ensure long national welfare. The state is very likely to intervene actively into all economic and financial activities with the purpose of improving international competitiveness of the country. Japan is very bureaucratic state and economic and business readers dont accept the strategies of laissez-faire, open markets, and free trade.Japanese leaders viewed the mentioned concepts as safeguard of economically powerful and influential exporters. Therefore, Japans strategy as developmental state is to reject the extant hierarchy of competitive prefer, as far as high return sectors would ensure high harvest-festival rates. However, much(prenominal) sectors are nt associated with developing countries. Also there is no direct for developing countries to rest with labor-intensive industries and agriculture. As Chalmers Johnson claims, these sectors should be with low growth prospect or, in other words, they should be low value-added.Developmental states should liquidate more attention to such strategy. Japanese government tends to utilize active policies to promote and practice competitive advantage strategy. In this respect, developmental state is the result of neo-mercantilism and economic nationalism. Japan is also driven by such motive as the country refers to economic regulation to intensify and rear technological development, as well as competitiveness of countrys leading industries, and capacity growth. Competitiveness is considered to be very essential for national economy.The abovementioned models dont reject the role of the state in economic activities. Nevertheless, they are diverse as far as they provide different perspecti ves on resource allocation. Neoclassical economists stress state efficiency, whereas the point of neo-mercantilism is state effectiveness. The author argues that there is no empirical criterion how to judge which model is valid because each model is supported by evidence.Everything depends on the trends which are constantly changing. Johnson captured public attention and interest for its timing rather than for hypothetical superiority. The author describes 1980s when economy has lost its effectiveness. Johnson writes that the United States also failed to fight decently both at the world and domestic markets. In that pointedness the economies of developed and developing countries werent on the peak of success.In those days states were interested in comparative advantage and competitiveness. Johnson claims both competitive advantage and competitiveness are rather effectiveness rather than efficiency. If economy is efficient, it may perform effectively at world and domestic markets . Japan was a teacher rather than formidable competitor. That is why the book catches attention. Johnson appeared to be the tho writer who discussed Japans economy in such terms. In his book Johnson challenges neoclassical economic theory.ReferencesJohnson, Ch. (2003). MITI and the Japanese Miracle the Growth of Industrial Policy, 1925-1975. Stanford Stanford University Press.