3 ms·

I agree, but with the addition that Japanese society is so structurally imbalanced towards "big and old companies" that the problem is significantly amplified.

by toyg 3y ago

FirmwareBurner 3y ago
That's not just a Japan problem, but a 'most of the industrialized world' problem: Germany, Italy, France, Canada, etc. They all had wealthy growing industries back in the days when coal, steel and fossil fuel vehicle manufacturing was hot, but failed to create, or invest and expand into the new ones, mainly IT, also known here as 'tech'. Only the US has managed to avoid this trap "thanks" to its lack of industry unions and social policies, coupled with a free market economy, start-up friendly tax system, and strong VC culture focused on disrupting existing players by throwing big money at new risky ideas. While the VC investment culture and focus on disrupting existing players is non existent in most other countries, coupled with the stronger social policies and unions, like in Europe for example, means there's a lot of political pressure (and lobbying!) to support the existing big old established players that contribute to the economy and employ tens of thousands of workers, to keep the status quo, no matter how antiquated and stagnating they are, instead of letting the free market run its course and letting them slowly whither die and focus instead on creating new businesses and industries in their place. This is also compounded in some of the countries I listed above by the ageing demographics who's retirement prospects are tied to the old declining industries(like in Germany), meaning their votes, government policies and financial aid will focus on keeping those old declining industries on life support for as long as possible, instead of focusing on supporting newer industries instead at the expense of the older ones. It's what the people vote for. Exceptions would be Singapore, Switzerland, and some of the UK-Ireland, Nordic and BeNeLux countries that have a strong education system focused on research and innovation and a business friendly tax and legal system for VC investors and who's population isn't too invested and entrenched in old declining industries.
- jacquesm 3y ago
  Switzerland is mostly rich because of shady banking deals and tax shelters. The rest was - from a financial point of view - a sideshow. They have some awesome technology companies, highly reputed and lots of knowledge and research happening there relative to its size, but that doesn't change the financial picture.
- phatfish 3y ago
  There was a small event that effected mainland Europe more than other places called World War 2. The US welcomed the engineers/scientists/wealthy fleeing the war and it continued after 1945. Same with the UK, but to a lesser extent I expect. Of course the US had people of similar ability, but the migration from European countries to the US (and other places) had the double effect of reducing the talent in one place and adding to it in another. The foundation of the US tech industry was created in the years after WW2.
  - FirmwareBurner 3y ago
    >The foundation of the US tech industry was created in the years after WW2 So was Germany and Japan. Both of which became much wealthier post-WW2 than before thanks to their booming industries. The difference is the US managed to successfully pivot away from the post-WW2 boom industries into the 21st century growth industry, aka IT or tech, while the other two countries got complacent and stagnant, pigeonholed in the same post-WW2 industries that made them wealthy in the first place but which aren't driving as much growth anymore today.
    - vl 3y ago
      But also they had their military expenses reduced to almost 0 for decades. It’s easy to compoundly outgrow neighbors if you don’t spend as much.
- elzbardico 3y ago
  The USA miracle can be more realistically explained by the US Dollar being the world’s standard currency as a consequence of WWII. This has allowed massive debits in a Keynesian frenzy and surplus capital. Then you have the massive military industrial complex that allowed the government to heavily subsidize the technology sector while looking good at the OTC. Throw in the CIA and direct military interventions all over the world to guarantee preferred market access to American companies and you have your miracle explained.

I agree, but with the addition that Japanese society is so structurally imbalanced towards "big and old companies" that the problem is significantly amplified.

by toyg 3y ago

I agree, but with the addition that Japanese society is so structurally imbalanced towards "big and old companies" that the problem is significantly amplified.

FirmwareBurner 3y ago

That's not just a Japan problem, but a 'most of the industrialized world' problem: Germany, Italy, France, Canada, etc. They all had wealthy growing industries back in the days when coal, steel and fossil fuel vehicle manufacturing was hot, but failed to create, or invest and expand into the new ones, mainly IT, also known here as 'tech'. Only the US has managed to avoid this trap "thanks" to its lack of industry unions and social policies, coupled with a free market economy, start-up friendly tax system, and strong VC culture focused on disrupting existing players by throwing big money at new risky ideas. While the VC investment culture and focus on disrupting existing players is non existent in most other countries, coupled with the stronger social policies and unions, like in Europe for example, means there's a lot of political pressure (and lobbying!) to support the existing big old established players that contribute to the economy and employ tens of thousands of workers, to keep the status quo, no matter how antiquated and stagnating they are, instead of letting the free market run its course and letting them slowly whither die and focus instead on creating new businesses and industries in their place. This is also compounded in some of the countries I listed above by the ageing demographics who's retirement prospects are tied to the old declining industries(like in Germany), meaning their votes, government policies and financial aid will focus on keeping those old declining industries on life support for as long as possible, instead of focusing on supporting newer industries instead at the expense of the older ones. It's what the people vote for. Exceptions would be Singapore, Switzerland, and some of the UK-Ireland, Nordic and BeNeLux countries that have a strong education system focused on research and innovation and a business friendly tax and legal system for VC investors and who's population isn't too invested and entrenched in old declining industries.

jacquesm 3y ago
Switzerland is mostly rich because of shady banking deals and tax shelters. The rest was - from a financial point of view - a sideshow. They have some awesome technology companies, highly reputed and lots of knowledge and research happening there relative to its size, but that doesn't change the financial picture.
phatfish 3y ago
There was a small event that effected mainland Europe more than other places called World War 2. The US welcomed the engineers/scientists/wealthy fleeing the war and it continued after 1945. Same with the UK, but to a lesser extent I expect. Of course the US had people of similar ability, but the migration from European countries to the US (and other places) had the double effect of reducing the talent in one place and adding to it in another. The foundation of the US tech industry was created in the years after WW2.
- FirmwareBurner 3y ago
  >The foundation of the US tech industry was created in the years after WW2 So was Germany and Japan. Both of which became much wealthier post-WW2 than before thanks to their booming industries. The difference is the US managed to successfully pivot away from the post-WW2 boom industries into the 21st century growth industry, aka IT or tech, while the other two countries got complacent and stagnant, pigeonholed in the same post-WW2 industries that made them wealthy in the first place but which aren't driving as much growth anymore today.
  - vl 3y ago
    But also they had their military expenses reduced to almost 0 for decades. It’s easy to compoundly outgrow neighbors if you don’t spend as much.
elzbardico 3y ago
The USA miracle can be more realistically explained by the US Dollar being the world’s standard currency as a consequence of WWII. This has allowed massive debits in a Keynesian frenzy and surplus capital. Then you have the massive military industrial complex that allowed the government to heavily subsidize the technology sector while looking good at the OTC. Throw in the CIA and direct military interventions all over the world to guarantee preferred market access to American companies and you have your miracle explained.