Japan's Mercantilism Policies

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Japan’s policies of mercantilism have impeded its economic success for decades. Despite the countries numerous economic successes around the world, Japan has not reached its full economic potential. In the media, this argument has been framed with the classic American conservative and neoliberal bias-that Japan’s lack of free trade has led to this sudden urgency for them to diverge from their protectionist policies to more neoliberal policies in the future, that their current economic situation is not sustainable. More importantly they have not taken advantage of David Ricardo’s theory of comparative advantage. In the light of The Great Transformation, by Karl Polanyi, mercantilism has led to a great end; the end of preventing neoliberalism (free market & trade) from encroaching on Japan’s community. What Polanyi’s view fails to realize is that this policy of mercantilism has not allowed Japan to operate as economically efficiently as it could under the free market. In essence, Japan has not realized its potential economic wealth measured in GDP because it has not been operating under neoliberal policies. The first thing we must examine is how the elimination of trade barriers described in Ricardo’s theory comparative advantage might help Japan’s ailing economy. “The Ministry of Economy, Trade and Industry maintains that not taking part in the [Trans-Pacific Partnership] will cost Japan 136.1 billion in [GDP]” (Obe., Japan's Free-Trade Move Criticized). This clearly indicates that Japan’s ministry of economy, trade and industry realizes the necessity for the nation to break down free trade barriers for the future of their economic success. The theory essentially prescribes the highest degree of specialization possible... ... middle of paper ... ...end, the fairness camp, represented by Ricardo trumps the Community camp, represented by Polanyi in the case of Japan. Works Cited Melloan, George. "A Free Trade Plan to Save Japan." Wall Street Journal (Online) 7 November 2011. Murray, Alan. "Catching Up, Getting Ahead." Wall Street Journal (Online) 17 February 2011. Obe., Mitsuru. "Japan's Free-Trade Move Criticized." Wall Street Journal (Online) 14 November 2011. —. "Noda Pursues Trade Pact Despite Opposition." Wall Street Journal (Online) 2 November 2011. O'Grady, Anastasia. "The Case for Free-Trade Leadership." Wall Street Journal (Online) 9 October 2011. Polanyi, Karl. The Great Transformation. Boston: Beacon Press, 2001. Ricardo, David. On the Principles of Political Economy and Taxation. Library of Economics and Liberty, 1821. 12 November 2011. .

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