The Japanese Love of Keynesian Economics Might Finally Be Coming to an End
Even those fortunate enough to have escaped infection by the Wuhan coronavirus will by now have noticed one of the virus’ many secondary effects: the disruption of the supply chain. Sick workers at meat plants, closed restaurants, hoarding, and the sudden spike in demand for things like ventilators, masks, and comestibles with long shelf lives have thrown the global flow of goods and services into disarray. Shelves are empty, crops are rotting in the fields—supply and demand are no longer matched, and the global economy is tying up in knots.
Even the mails are bogged down. I went to a Japanese post office two days ago and was told something by the clerk there that I didn’t expect to hear in my lifetime: “Sorry, we can no longer send any letters to the USA.”
This secondary effect is giving rise to a tertiary one, namely, concerns over dependency on supply chains that rely on Chinese goods. Given Japan’s proximity to China, and China’s increasing turn toward authoritarianism, many Japanese are hoping there are ways to do business without China.
But whatever one thinks of the level of danger posed by the Chinese regime, the fact remains that it would be wise for the Japanese to start thinking seriously about how to encourage domestic industries.
For a hint on how to do this, we might look at some interesting new developments in the former second-biggest economy itself.
Japan rose from the rubble of World War II and came eventually to rival its erstwhile vanquisher by dint of what many began to call Japan, Inc., which is the general appellation for how things used to work here—the “iron triangle” of in
Article from Mises Wire