The Origins of Japanese Trade Supremacy

Book excerpt: For many in the West, the emergence of Japan as an economic superpower has been as surprising as it has been sudden. After its defeat in World War II, Japan hardly appeared a candidate to lead industrialized nations in productivity and technological innovation, and the "Japanese miracle" is often explained as the result of U.S. aid and protection in the postwar years. In The Origins of Japanese Trade Supremacy, Christopher Howe locates the sources of Japan's current commercial and financial strength in events tnat occurred well before 1945. In this revisionist account, Howe traces the history of Japanese trade over four centuries to show that the Japanese mastery of trade with the outside world began as long ago as the sixteenth century, with Japan's first contact with European trading partners. Although profitable, this early contact was so destabilizing that the Japanese leadership soon restricted foreign trade mainly to Asian partners. From the early seventeenth to the middle of the nineteenth centuries, Japan developed in relative isolation. Though secluded from the scientific and economic revolutions in the West, Japan proved adept at finding novel solutions to its own problems, and its economy grew in size, diversity, and technological and institutional sophistication. By the nineteenth century, when contacts with the West were reestablished. Japan had developed a remarkable capacity to absorb foreign technologies and to adapt and create new institutions, while retaining significant elements of its traditional system of values. Most importantly, Japan's long-standing reliance on its own ingenuity to solve problems continued to flourish. This tradition, born of necessity, is the most important foundation for Japan's current position as a world economic power.