Makoto Itoh: The Japanese Economy Reconsidered

by tigermanifesto


The Japanese Economy Reconsidered is a short slice of Marxist economic history and analysis. Effectively summarizing the Japanese “lost decade,” which has by now accordioned out to more than two decades of stagnation, the book is an incomplete but strong primer on the Japanese economy in the 1990s. More than a factual account, however, it also offers a preliminary definition and critique of neoliberalism in the Japanese context.

It’s worth asking how Itoh is “reconsidering” the Japanese economy. He asks some of the same questions everyone was asking about Japan in the 1990s: what happened? Before the bubble burst, popular chatter about Japan ranged from idolization to outright terror.  Where he differs from the mainstream liberal discourse on Japan is in his diagnosis of the Japanese economy from the 1973 oil crisis onwards. Many accounts I’ve ready discuss how Japan weathered the oil embargo with relative ease, shifting towards an export-focused industrial strategy that ensured steady growth throughout the 1970s and 80s. Itoh, meanwhile, opens his book with: “In 1973, high economic growth in the Japanese economy…came to an end.”¹ Following the resource crunch and inflationary crisis of the 1970s, the Japanese state aggressively injected money into grandiose public works projects, assisted the implementation of automation in factories and offices, crushed public sector unions through privatizations, and fueled a temporary recovery. What came out of that was the famous bubble, where land prices escalated beyond all reason and financial speculation in land and stocks was feverish. After this bubble inevitably detonated, near-zero growth became the norm, which, combined with an aging population, has created an immense problem of planning and legitimacy.

Itoh fills in that basic narrative in chapters 2-5, investigating the role of information technologies, industrial hollowing-out and the effect of the boom and depression on family life, the process of the bubble’s bursting, and Japan’s position in the globalizing capitalist system. In that final chapter, the book focuses on Japanese industry’s increasing capital exports into other countries in Asia, particularly China and Southeast Asia. Given the publication date of the book (2000), it’s not surprising that it ends with a brief autopsy of the Asian boom of the 90s and the subsequent collapse of that bubble.

There is nothing difficult or unclear in Itoh’s book; there is nothing all that striking either. Well, there is one possible exception. While his diagnosis of the “failure of neoliberalism” in Japan might seem obvious in hindsight, it partially synthesizes its analysis of neoliberalism with the idea of Japan as a “company-cented society.”² We see the echoes of his concluding remarks in the 2007-8 global financial crisis, which reproduced many of the dynamics of the Japanese collapse in the 90s: “Company-centred restructuring combined with emergency economic policies that place priority on alleviating the difficulties of big business has deepened the hardship and worry in the economic life of the majority of people.”³ This reality, this induced existential fear, he argues, is part of what has depressed the Japanese birthrate to such lows.

It might be useful to take the longtime category of “company-centred society” and bring it to a more general analysis of neoliberal capitalism. When looking at the kind of civil societies the last forty years of capitalist mutation have produced, we see the gravitational pull of private firms increasing, orienting more and more of the rest of the state and nonstate sectors (NGOs, media, online communities, etc.) around capital accumulation. Indeed, given that most states’ response to the crisis was to violate neoliberal principles with gigantic public bailouts, the idea of company-centrism might even be more generally descriptive of the current form of capitalism in the First World than neoliberal.

Unfortunately, the lot of the Japanese working class has only deteriorated further in the sixteen years since the publication of The Japanese Economy Reconsidered, and the current Japanese government offers no chance of rescue from the vultures of corruption, bureaucratic domination, and industrial decay that have preyed on Japan for most of living memory. So Itoh’s short and straightforward work serves about as well as a book can: it informs and outlines what possible paths the Japanese people might take in liberating themselves.


  1. Makoto Itoh, The Japanese Economy Reconsidered (New York, NY: Palgrave MacMillan, 2000), 1.
  2. Ibid, 94-95.
  3. Ibid, 135-136