In This Review

The End of Japan, Inc.: And How the New Japan Will Look
The End of Japan, Inc.: And How the New Japan Will Look
By Christopher Wood
Simon & Schuster, 1994, 227 pp.
The Undefeated: The Rise, Fall & Rise of Greater Japan
The Undefeated: The Rise, Fall & Rise of Greater Japan
By Robert Harvey
Macmillan, 1994, 633 pp.

A few years ago, so-called "revisionist" writers on Japan were telling us that Japan, Inc. was immutable, infallible, and relentlessly set on a course of world economic domination. Today these theorists will have to explain Japan's worst postwar slump, the disintegration of its ruling party, the LDP, and the fact that America has toppled Japan's economy from its long-held position as the world's toughest competitor.

Wood, the former Tokyo bureau chief of The Economist, describes an ossified economic and political system that mistakenly believes that it can continue to export its way out of recession, aging politicians who continue to act as if relations between America and Japan can be conducted as usual, and a political system that has entered a turbulent period as rivals compete to fill the power vacuum left by the demise of the once-dominant LDP.

Harvey, a qualified admirer of the revisionists, argues that the "Japan problem" is not that identified by Karel van Wolferen -- i.e., that no one governs Japan -- but rather that its government is still, as it was in the days of the shogun, in the hands of elites barely responsible to the people.

Both of these books are provocative, readable, and lively. Wood may be overstating the depth of the Japanese economic crisis, but he does point to serious problems -- an automobile industry threatened by the rising yen, excess investment, and a huge loss of competitive advantage; and a new computer-led information economy in which America, not Japan, is leading the way.

Both of these books deserve wide readership. Critics will complain that each oversimplifies. But both identify fundamental questions about the future of Japan and its relations with the United States and offer sensible advice on what needs to be done.