Abstract

Japan is the world's second most productive economy, but its economic system is intensely controversial. It differs from both the plan-rational systems of the communist world and the market-rational systems of the capitalist world in that it combines elements of both. This configuration directly challenges orthodox capitalist theory as advanced by the United States and the United Kingdom. During the 1990s, when Japan's economy slowed greatly and some other economies of East Asia were besieged by international capital flows, Japan's economy was singled out for a withering ideological critique. Nonetheless, what is wrong in Japan is not its economy but its status as a military satellite of the United States, which causes its political system to be ineffective in serving the country's economic interests.