James Fallows’ Looking at the Sun: The Rise of the New East Asian Economic and Political Systemis a readable and far-ranging description of the postwar growth of the major East Asian economies. Japan is the major economic force in the spectacular development of the region, but close behind are the other countries or Asian “tigers” that Fallows calls “the Contenders”: Taiwan, Hong Kong, Korea, Singapore, Malaysia, Indonesia, and Thailand. More briefly, Fallows considers countries that are “on the sidelines” for the time being: Vietnam, Myanmar, and the Philippines.
The strength of Fallows’ book is that it is unified, presenting a strong case that these Asian countries form a single system. Although the countries have important differences—duly noted by Fallows—they have learned the Japanese model of economic development and largely accepted it. The book profits from the author’s familiarity with each country, and this also provides a unifying theme. During four years Fallows lived with his family in the Asian countries he describes, and he enlivens his account with personal anecdotes and colorful details. He also interviewed officials in these countries, and his quotations provide both sharpness and vividness.
The book has two shortcomings. There is almost no discussion of United States trade policy toward Japan. This is probably deliberate: The focus is consistently on what East Asia has done, not what the United States should do about it. The implication is simply that “the Asian system” should be taken seriously; a reader interested in the problems of trade negotiation should look elsewhere. A second shortcoming is Fallows’ discussion of Western economic theory. Here he has more to say. Some of his suggestions are interesting but remain on an impressionistic level. They re- quire more space to be convincing; as it is they are fragmentary and sometimes distracting.
Fallows considers the dynamic East Asian economies as a group, with Japan providing a widely copied model for development. All countries in the group employ government direction and policy—“industrial policy”—to foster economic development. They are, however, not state-directed economies like the former Soviet Union, North Korea, or China before 1991. They are a mixture of free markets and competition on the one hand and, on the other, deliberate planning by state agencies and “talented bureaucrats.”
What is the Japanese “system”? Most important, it fosters production—and the continued growth of production—over consumption. It also puts a far greater emphasis on market share, and the cumulative growth of this market share, than on immediate profit. In more general terms,
Japanese spokesmen would emphasize the worth of the collective interest rather than that of the individual; would emphasize administrative institutions insulated from the ups and downs of democracy; would talk about “excessive competition” as something their economy avoided; would say that international trade should be open in only certain ways; and would claim that international order was strongest with a dominant power, rather than some abstract rule of law.
These, Fallows believes, are the underpinnings of the success of the Japanese economy. Coupled with one of the highest personal savings rates in the world (three times that of Americans), a disciplined and well-educated work force, nonadversarial relations between management and labor, highly developed technology, and underconsumption, the results have been dramatic. Many of these qualities have...
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