Americans, and especially American libertarians, find much to admire in the Japanese people: their strong families, their commitment to education, their strong sense of individual responsibility, their peaceful and democratic society, and their productive entrepreneurship that has given the world so much material progress over the past 50 years. The Japanese can take much pride in their economic success, and they certainly don’t deserve the criticism they have received from protectionists in the United States and Europe who don’t want to compete in a global economy.
But recent economic problems in Japan and its Asian neighbors indicate that there are problems with Japan’s economic policies. An economy largely based on private property, individual initiative, and free markets has been hampered by too much state allocation of capital and too much of what Americans call “crony capitalism.” These policy mistakes have led to the need for currency reform (mostly in Asian countries other than Japan) and deregulation of financial services. Also, Japanese consumers have not always reaped the benefits of economic growth, and deregulation of retailing might allow them to achieve standards of living commensurate with their productivity. But none of this should obscure the real achievement of the Japanese in dramatically increasing their living standard in scarcely a generation through productive enterprise in a system based on low taxes, free trade, and the rule of law.
The libertarian philosophy has much to offer Japan as we move into a global millennium. But an obvious question may occur to Japanese readers: Are these just American ideas, or at least Western ideas? Do they have any relevance to the people of Japan and Asia?