How mercantilistic is Japan


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Goals of the social market economy:


. ) Unfair competition and exorbitant prices are prohibited and prevented:

A key factor in the social market economy is the regulation of prices. Care is taken to ensure that important foods such as milk and bread remain affordable for people with low incomes. Unfair competition is checked and prohibited, exorbitant prices can arise, but are quickly denounced and abolished.

.) an intensive education policy

School access for all classes of the population, including other educational paths

.) Income taxation based on earnings


Special forms of European social models:


.) The Scandinavian model:

Social spending is relatively high (Sweden is considered the ultimate welfare state)

.) The Anglo-Saxon model:

(Great Britain, Ireland) dismantling of the welfare state; State services are being privatized, which creates a greater sense of responsibility on the part of individuals.

.) The continental model:

(Germany, France, Italy, Austria) The welfare state is mainly financed by high non-wage labor costs.

.) The Mediterranean model:

(Spain, Portugal, Greece) poor economic, social security



Neo-mercantilism in Japan:

(Taiwan, South Korea, Singapore, partly India)



This was the predominant (European) economy until the 18th century.

The aim was to increase the wealth of the state for the benefit of the king. This was achieved through:

.) Low wages

.) high customs duties for finished goods from abroad

.) Promotion of the export of finished goods


Based on historical mercantilism, some economists refer to the Japanese economic system or that of the “tiger states” as neo-mercantilism, as certain features are similar.


Japan already had the highest economic growth rates in the post-war period. But in the 1980s things really got going economically for Japan and in less than two decades it became the third largest economic power in the world after the USA and the EU.


There are several reasons for the economic rise:

.) The Japanese economic system is a kind of mixture between a planned economy (= draft long-term development goals on the basis of related industries, e.g. strategic investment decisions, how high [percentage] will the market share in this industry be, what cost development will arise) and free market economy

.) military procedures in Japanese companies

.) Mentality of the population

.) Export subsidies


Japan has conquered all industries:

.) Automotive industry

.) Computer

.) photographic equipments

.) Clocks etc.

Japan became the electronics world power by the beginning of the 21st century. From this time on Japan got a competitor, China the new electronics superpower (China: from the planned economy [until 1978] to capitalism -> see “socialist market economy).


The former developing countries in East and Southeast Asia were also able to develop rapidly economically in the 1980s and 1990s (called "the tiger states" due to their rapid development).


The original four tiger states include:

.) South Korea

.) Taiwan

.) Singapore

.) Hong Kong (since 1997 with the PR China)


There are other countries that are catching up, such as:

.) Malaysia

.) Thailand

.) Philippines

.) Indonesia



Socialist market economy (PRChina, Vietnam):


Socialist market economy means that the economic order is capitalist, that is, private companies determine what happens in the economy. At the political level, however, there is only one party, namely the Communist Party. In principle, the party determines the direction of the economy, but does not interfere in the details.


China - from a planned economy to a socialist market economy (to capitalism):


Transformation process:


China has been a communist people's republic since 1949. Until 1978, the model of the planned economy was used.

In 1976 Mao-Tse-Tung, the founder of communist China, died. From 1978 the "socialist market economy" developed in China. The political system remained communist, but the economic system moved in a market economy.


American, Japanese and European companies have electronic devices such as cell phones, televisions and DVD players manufactured in China. The neighboring Taiwan is also outsourcing more and more productions to the cheap mainland. The Corporate headquarters and the Marketing departments , the factories are located in mainland China. The international automobile manufacturers also build huge plants here in China also millions cheap workers waiting for work.


However, the north or northeast of China, the former industrial center (huge steelworks) is impoverished, the south is promoted as a business location.


(Continued on page 4)