One of my students is doing a summer research project on the Japanese financial crisis of the 1990s and we just looked at Jon Woronoff’s book The Japanese Economic Crisis (1992) which was originally published as Japan, the Coming Economic Crisis (1979). Woronoff, who was at one point a correspondent for the journal “Asian Business” and still writes about East Asian economies, was apparently widely panned at the time for being a Japanophobe or maybe just a hater in general, but I was very struck by how many of the issues he raises–banking problems, too much reliance on exports and protectionism, widening social inequalities, insecurity for the elderly, the massive generation gap of the late 20th century, collapse of the company loyalty ethic–became widely acknowledged and commented-upon social and economic problems after the collapse of the bubble. Didn’t he turn out to be right about a lot of things? Has he gotten any credit? This is not my field. My understanding of postwar economic issues is thin (Is MITI a college at M.I.T?). But the many ways in which Japan’s response to its crisis of two decades ago resonate with both the global and Japanese situation today make this feel worth revisiting.
The (Ongoing) Economic Crisis
Woronoff wrote a number of books including “Japan: The Coming Social Crisis (1982)”, “Japan’s Wasted Workers” (1983)”, “The Japan Syndrome” (1985) and “Japan As Anything But Number One” (1990). Inevitably, he repeated himself a good deal but, as you say, he raised a lot of the right issues and was virtually alone in doing so in print. There are a number of reasons why he hasn’t been given much credit. Probably the most important is his timing. Many of the foreigners who made hay during the bubble years hadn’t even begun to look at the country when Woronoff first began sounding the warning bell. With so much money to be made, no-one really wanted to listen to a nay-sayer. He also didn’t have any academic credentials so his analysis wasn’t especially rigorous which made it easy for economists to ignore him. By some accounts, which must be taken with a grain of salt, he was a difficult man at the time. Perhaps this was simply the result of being ignored for so long but it might be that he didn’t do himself any favours in the way he tried to get his message across.
When Japan’s bubble did burst, you would think Woronoff might have had an opportunity to shine but he didn’t really have a platform any more and his earlier work was eclipsed by authors who made much the same case but were fresher in the mind because they happened to publish nearer the implosion (such as Bill Emmott). Also, he didn’t really have anything new to say whereas people were already trying to understand what was going to happen next. “The Enigma of Japanese Power” was written in 1989 and that work dominated the discussion of Japan watchers in the English-speaking world. Rightly or wrongly, it seemed a more heavyweight work than Woronoff’s books and attempted to put forward a thesis rather than a series of observations.
Where can I find information about the economic crisis in Japan in the last 5 years?