Sunday, January 21, 2007

The second largest economy

Turning now to something I really know nothing about, how did Japan get so rich? I'm reminded of this persistent question, which went unanswered through two semesters of macro, by Fr. Connor's coffee hour spiel, "The Gospel According to Oprah." Somehow, he worked in a reference to W. E. Deming's role in transforming the post-WW2 Japanese economy, as a bean-counter! Control charts, baby, control charts.

Perhaps also the Macarthur constitution had something to do with it, although the important elements, ie guarantees of individual freedoms, appear to have already been there in the Meiji constitution of 1889.

I'm also aware of Mancur Olson's argument that Japan and Germany rebounded so vigoursly after WW2 because they were suddenly freed of the sclerotic effect of special interest groups, which were destroyed with everything else during the war. Now of course the special interests have fully recovered. However, I'm pretty sure the important transition in Japan, as in Germany, occured before the war. I just don't know what it was.

Rodney Stark suggests that religion never helped much. He shows that, unlike the monotheistic religions, and Hinduism which he argues is effectively monotheistic, beliefs in Shintoism and Buddhism are not correlated with moral beliefs*. The difference arises because Christianity, Islam, Judaism, and Hinduism all posit the existence of a moral God, whereas Shintoism, Buddhism, and Taoism do not. So, then I hear that crime in Japan is almost non-existent. What gives? I know at least 3 of you have lived there, so let's hear it.

*I corrected this.

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