Yoshiro Miwa

Although most economists maintain a mistrust of a government's goals when it intervenes in an economy, many continue to trust its actual ability. They retain, in other words, a faith in state competence. For this faith, they adduce no evidence. Sharing little skepticism about the government's ability, they continue to expect the best of governmental intervention. To study government competence in World War II Japan offers an intriguing laboratory. In this book, Yoshiro Miwa shows that the Japanese government did not conduct requisite planning for the war by any means. It made its choices on an ad hoc basis and the war itself quickly became a dead end. That the government planned for the war incompetently casts doubts on the accounts of Japanese government leadership more generally.

Yoshiro Miwa asks whether a state can correct market failures and in particular critically analyses the performance of the Japanese economy as a result of state intervention within it. In order to examine the capacity of the state to promote growth, Miwa examines the Japanese machine tool industry, the government's role in promoting this sector and government efforts to achieve growth in small and medium sized enterprises in Japan.

For Western economists and journalists, the most distinctive facet of the post-war Japanese business world has been the keiretsu, or the insular business alliances among powerful corporations. Within keiretsu groups, argue these observers, firms preferentially trade, lend money, take and receive technical and financial assistance, and cement their ties through cross-shareholding agreements. In "The Fable of the Keiretsu", Yoshiro Miwa and J. Mark Ramseyer demonstrate that all this talk is really just urban legend. In their insightful analysis, the authors show that the very idea of the keiretsu was created and propagated by Marxist scholars in post-war Japan. Western scholars merely repatriated the legend to show the culturally contingent nature of modern economic analysis. Laying waste to the notion of keiretsu, the authors debunk several related "facts" as well: that Japanese firms maintain special arrangements with a "main bank," that firms are systematically poorly managed, and that the Japanese government guided post-war growth. In demolishing these long-held assumptions, they offer one of the few reliable chronicles of the realities of Japanese business.

Yoshiro Miwa asks whether a state can correct market failures and in particular critically analyses the performance of the Japanese economy as a result of state intervention within it. In order to examine the capacity of the state to promote growth, Miwa examines the Japanese machine tool industry, the government's role in promoting this sector and government efforts to achieve growth in small and medium sized enterprises in Japan.

The great successes of the Japanese economy have often been attributed to differences in the Japanese economic system. Employing an exhaustive investigation of the roles of the government and banks, firms and networks, and workers and managers, Yoshiro Miwa illustrates that the standard principles of economics explain the dominant patterns of Japanese economic phenomena. Debunking many long-held myths, Miwa deftly propels readers to a fuller, more accurate understanding of the Japanese economy.