Citations (18)



The Fable of the Keiretsu, and Other Tales of Japan we Wish were True

Yoshiro Miwa

Osaka Gakuin University

J. Mark Ramseyer

Harvard Law School

April 2004

Harvard Law and Economics Discussion Paper No. 471

Most of what we collectively think we know about the Japanese economy is urban legend. In fact:

- The keiretsu do not exist, and never did. An entrepreneurial research institute in the 1950s created the rosters to sell to Marxist economists looking for the monopoly capital that their theory told them would dominate their bourgeois capitalist world. Western scholars hoping for examples of culture-specific forms of economic organization then brought them back to the U.S.

- The zaibatsu did not succeed pre-war because they bought politicians, exploited the poor, or manipulated disfunctional capital markets. They succeeded for all the usual varied reasons a few firms succeed in any modern economy. They acquired the (pejorative) zaibatsu label because they happened to be thriving when muckraking journalists in the 1920s and 30s came looking for someone to blame for the depression.

- Japanese firms have no main bank system, and never did. Economists popularized the idea as an anecdote on which to peg their mathematical models, and non-economists use it (like the keiretsu) as yet another putatively culture-bound economic phenomenon.

- Japanese firms are neither short of outside directors nor badly governed. The charges simply represent yet another variant on populist journalism. Like firms in other competitive capitalist countries, Japanese firms survive only if they adopt governance mechanisms appropriate to the markets within which they must compete.

- The Japanese government never seriously guided or intervened in the Japanese economy. When the economy boomed, politicians and bureaucrats did take credit. They had created the success through their own far-sighted leadership, they claimed. Marxist scholars dominated Japanese social science departments, and they were not about to suggest instead that market competition might account for the success. Happy as they were to find an example of successful government intervention, neither were most Western scholars of Japan.

Number of Pages in PDF File: 6

JEL Classification: G3, K2, L1, P5, B14, E61, K21, K23, L13, L43

working papers series

Download This Paper

Date posted: October 19, 2004  

Suggested Citation

Miwa, Yoshiro and Ramseyer, J. Mark, The Fable of the Keiretsu, and Other Tales of Japan we Wish were True (April 2004). Harvard Law and Economics Discussion Paper No. 471. Available at SSRN: http://ssrn.com/abstract=607382 or http://dx.doi.org/10.2139/ssrn.607382

Contact Information

Yoshiro Miwa (Contact Author)
Osaka Gakuin University ( email )
2-36-1 Kishibe-Minami
Suita, Osaka 5645811
J. Mark Ramseyer
Harvard Law School ( email )
1575 Massachusetts
Hauser 406
Cambridge, MA 02138
United States
617-496-4878 (Phone)
617-496-6118 (Fax)
Feedback to SSRN

Paper statistics
Abstract Views: 2,379
Downloads: 480
Download Rank: 30,653
Citations:  18

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo8 in 0.500 seconds