The decline of the Japanese market has been interpreted through biased Western eyes, a ‘lost decade’ never occurred, says leading country specialist Karel van Wolferen.
Speaking at Citywire Berlin, the Japan expert and economic commentator dismissed years of analysis from both the mainstream and financial media stating:
‘Let me shock you – there never was a lost decade. Any analysis with a prominent mention of this is nonsense.’
It was a very different story on the ground in Japan, he said.
With over 40 years of experience in analysing the Japanese market, the Dutchman says instead, during this period, Japan in fact carried out major reconstruction projects and rebuilt a lot of its major cities like Tokyo, Osaka and many others.
‘The lost decade was more a loss of landmarks,’ he said, adding that Tokyo was almost unrecognisable today compared to how it looked ten years ago.
'There were no boarded up shops during the "lost decade" and no real visible signs of the serious economic turmoil many Western analysts were describing in their reports.'
‘It is sinister,’ he said. ‘Today’s dominant economic theory is ideology masquerading as science.’
‘Theory can be a big obstacle, it remains that because it comes from a cloistered environment. It fits with basic beliefs of how a lot of the Western capitalist world is organised and how it ought to work.’
Japan’s success model should not be underestimated, he said, and it is a much more managed economy than many people think.
The division between the private and public sector does not really exist in Japan, he said, as bureaucrats have a lot of control over the overall direction many large companies take.
Convergence to Japan/China model
Much is said of the failing of the Japanese and Chinese economic model but in certain cases their methods have proved efficient than Western methods, said Von Wolferen.
He believes, that we could possibly see a convergence towards elements of the models seen in Japan and China taken on by Western economies.
Using the example of the ‘too big to fail’ model of bailing out banks, he said:
‘The government protectionism of business in Japan and China serves the common effective goal of a strong and flourishing economy.’
‘Western government protectionism of bankrupt businesses has served individual enrichment and a strengthening of plutocracy.’