Customer Reviews

Blindside: Why Japan Is Still on Track to Overtake the U.S. By the Year 2000

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This book is truly looking at Japan through sakura-colored glasses. Nothing close to this fluff has been published since Herman Kahn in the 1970's. Somehow we're supposed to believe that Japan, in its worst economic crisis in FIFTY years, is supposed to economically overrun the U.S. in less than TWO. Well, if you're "persuaded" by that, I have some nice beach-front property in Arizona to sell you cheap. It's ironic that the media praising this book to the skies have never lived in Japan, don't work for a Japanese company, can't speak the language, and know little of the Japanese system.

Mr. Fingleton attacks western economists as all myopic dolts (he doesn't say much though about the Japanese economists who largely agree with them though). All of the Japan's miseries above are all just part of a Master Plan to fool the West before Japan races ahead of the world. He puts forth lots of facts and statistics, yet constantly draws the wrong conclusions. He says more Japanese buy diamonds than Americans, a fact in a vacuum that may be true. But to conclude by such that Japanese are now more affluent is absurd--it ignores consumer preferences--such as Americans would prefer to buy something else. Most of his other arguments have already been debunked by other authors.

If this book has any value at all, it's not to count the Japanese out--even if they're not going to own the world. I've worked in Japan for 11 years now and I can tell you that Fingleton's rosy predictions aren't going to come true any time soon, if ever.

But don't take my word for it--ask those in the Dead Fukuzawa Society, an e-mail discussion group of western and Japanese economists, financial experts, and ex-pats in Japanese corporations (and Fingleton himself is a member). More than a few have attacked the book as pseudo-intellectual rubbish. Not a single member of the 500 people have defended Fingleton's conclusions. But better yet, ask the Japanese themselves. They know their own country better than anyone and you don't see ANY of them rubbing their hands together, gloating about how they're going to storm the U.S. If you really want to learn about Japan, try reading Van Wolferen's "The Enigma of Japanese Power" or John Woronoff's "Japan - As Anything But- #1". They are far less flattering yet far more realistic books on Japan. But skip this lopsided, erroneous book on Japan.

From Tokyo Journal Magazine - www.tokyo.to

By Robert Guest

Inside the Puppet Kingdom

Blindside by Eamonn Fingleton

The stockmarket is sinking into Tokyo Bay, like a yakuza in concrete geta. GNP is growing like rice planted in a desert. Honda's stopped hiring, bad debts are menacing several medium-sized banks, and analysts are whispering that the entire financial system might be on the verge of collapse. Inside the Puppet Kingdom

This is probably not the best time to be publishing a book about the invincibility of the Japanese economic model. But that is exactly what Eamonn Fingleton, former Tokyo correspondent of Euro Money, has done. Blindside is turning out to be this summer's beach reading for bright young Japanologists everywhere. At elite private seminars, and on the Internet, young men with joint Japanese/Economics degrees and prominent Adam's apples are excitedly picking over Fingleton's thesis: that Japan is poised to overtake the United States as the world's largest economy by the year 2000.

This is what's politely called a "brave" argument. In other words, almost no one agrees with Fingleton. "Japan seen sliding into second recession," ran a recent headline in the Financial Times; "Crisis Among the Rabbit Hutches," observed the Sunday Telegraph. But Fingleton tackles the doom-merchants head on, with some perceptive observations about their over-reliance on Western securities analysts (who tend to be conventional free marketeers), and ignorance of Japanese economic history. "Some systematic flaw in Western psychology," he believes, "leads Westerners, and particularly Americans, to exaggerate Japan's weaknesses and belittle its strengths."

We all know that Japan rose from the rubble of defeat and transformed itself, phoenix-like, into the world's second biggest industrial power etc., etc. Where scholars, journalists and shot-bar bores are unable to agree is how the miracle occurred. The debate works something like this. On one side are those who reckon Japan got to be super-rich for very straightforward reasons: everyone worked hard, and the government orchestrated sensible macro-economic policies like keeping inflation down. This is the conventional, free-market view.

Opposed to it is that of the revisionists. Chalmers Johnson, the granddaddy of them all, pointed out a decade and a half ago that the Japanese government intervenes in its economy, and that these interventions seem to make rather a lot of difference. He argued that when those clever bureaucrats at MITI organized low-cost finance for high-tech industries, tolerated cartels, and gave an implicit guarantee that no big company would be allowed to go bust, it was the cozy confidence these policies fostered which allowed the bubble to expand so unstoppably.

Fingleton stands back to back with the revisionists, and in some ways overshadows them. His prose is fizzier and more arresting than scholarly Professor Johnson's, and commands a wider sweep than trade-negotiator-turned-sanctions-hawk Clyde Prestowitz.

In brutal summary, he believes that the Ministry of Finance (whose top bureaucrat has almost as much power at his disposal than the President of the United States) interferes with people's lives in such a way as to make everyone richer in the long term.

For an economy to grow, you need investment, and for investment you need capital. The MOF sees raising capital for industry as its most important task, and it gets its hands on the stuff by taking it from you and me. If we put our hard-earned yen into a Japanese bank, we earn lousy interest, because the boys at MOF want banks to lend money cheaply to the likes of Mitsubishi and Toyota.

If Junichiro Sixpack wants a loan to build an extension to his four-and-a-half mat, he can't have one. If he wants to take his money out of the bank after 7pm, he can't do that either, because MOF wants to make it hard for him to spend and easy for him to save. The will to save explains a lot about Japanese government. Why do we have trade barriers? Because they reduce the range of goods on Japanese shelves, thus dulling Junichiro's desire to go shopping. So he saves his money instead.

Such is the power of the sinister MOF that it can make politicians pass laws that their constituents hate. No one in the Diet wanted the consumption tax, but they voted for it anyway. When former Prime Minister Yasuhiro Nakasone made a stand, MOF had investigators look into his murky campaign finances, and forced his resignation. Politicians with equally grubby hands, but who supported the tax, were left alone. The consumption tax discouraged consumption, thus encouraging saving, thus giving industry more money to invest . . . which is what the Ministry of Finance wanted all along.

Bureaucratic brilliance is probably what allowed Japan to catch up so rapidly with the west-Fingleton is also right to point out the way in which South Korea has copied the Japanese model with such success. But at a time when the economic backroom boys-on both sides of the Sea of Japan-are pulling back from the economy, and undoing the old control mechanisms, Fingleton is struggling against the tide. As a work of theory, Blindside is readable, engaging and thoroughly recommended; as a chart for the stratospheric future rise of the Japanese economy, it is either a work of a busy ima

Writing in The New York Times Book Review in 1995, "Adam Smith" refers to Blindside as an "alarum." He is far too generous. That this unbalanced collection of anecdotal reasoning, historical inaccuracies, and revisionist tripe managed to capture the imaginations of so many respectable thinkers wishing to keep the "economic juggernaut" flames alive in the Nineties speaks volumes as to the extent of the ideological problems within Japan Studies.

Thankfully, with 92 days remaining until the end of Mr. Fingleton's punditry career, protectionists, mercantilists and AFL-CIO members will have to look elsewhere for indirect justification of their own political views. Despite Mr. Fingleton's assertion to the contrary, Japan will not be "overtaking the U.S. by the year 2,000"...if ever. Reality beckons.

In the late 1980s and early 1990s a number of journalistic books appeared which purported to explain how Japan was eating our lunch. "Blindside" is typical of the genre.

These books tended to be based on simplistic anecdote-based economics. Their starting point was Japan's strong postwar economic growth (exagerrated by Japan's asset price bubble of the late 1980s). They uncritically ascribed this to Japan's unique economic institutions or "the Japan model" and then extrapolated forward.

The subtitle of the book "why Japan is still on track to overtake the U.S. by the year 2000" hints that by the time this book was published in 1995 that something was going wrong. Indeed, by 1995, it was apparent to close watchers of the Japanese economy that something was seriously amiss, putting cheerleaders like author Eamonn Fingleton on the defensive. This one was past its "sell by" date the day it was published.

The intervening years have not treated Japan or this book gently. Rather than overtaking the U.S., Japan's economic performance between 1990-2000 was the worst decanal performance exhibited by any industrial country in the postwar period.

This book provides only inadvertant insight into why things went right in Japan for an extended period of time and then began going horribly wrong beginning around 1990.

I was speaking to a friend of mine who is in the insurance sector in Tokyo. During the course of our discussion, we came to the topic of economic slump and how people who visit Tokyo on business are led to believe that the slump is much larger and more devastating than what the press reports.
My friend laughed it off and said the Japanese are good artists of deception and he went on to give me an example. India ( like most developing countries of the region ) takes loans from ADB. apparently ADB is funded by Ministry of Finance, Japan to a large extent. Now an ADB loan is used for infrastructure development like say laying of roads.
Japanese cos. are given the contract for providing the raw material and equipment for the same like Mitsubishi Tar and Sumitomo cement and so on citing that Indian cos are below par for such raw material ( its a different matter that L & T cement is used in construction of airports in many countries )

Finally for the repayment of the loans, the Japanese Govt formally issues a soft loan to repay the ADB debt. In the larger scenario not only has the govt benefitted from this but Japanese cos also are benefitted in the longer run. So the money given out as loan by the govt reaches Japan through the Keiretsus.

A lot of this may not be available in the open to be proved but is definitely the source of speculation and thus may never be proved.

On reading Blindside such practices only come out in the open.

Overall, one of the best books i have read - both in fiction as well as non-fiction.

"Blindside" is a tour de force. When I casually picked up this title in a bookstore, I really didn't care much about the topic of economics (or Japan, for that matter). But after reading this absorbing, utterly fascinating book, cover to cover, I found myself reading it again. And again. Fingleton makes an absolutely iron-clad case for the superiority of the Japanese economic model. As it turns out, the Japanese system was specifically designed (and brilliantly so) for the demands of

the Information Age. By contrast, the U.S. is still mired in the hopelessly dated, utopian, and simplistic ideas of Adam Smith-style free market theories. Fingleton convincingly explains why Smith's 18th century ideas are less relevant than ever in today's economy. "Blindside" effectively demolishes the "free market" ideology that myopic Western economists espouse these days. It convincingly shows how the U.S. is squandering its lead, just as Britain did in the early part of the century. And it convincingly shows how a smug (and inept) Western media is badly misleading the public about Japan's supposedly weaknesses in the 1990s.

Brilliant analysis of a World beating economic system
Reviewer: Patrick Walsh from Amsterdam, North Holland The Netherlands
Don't pay any attention to the detractors of this author.
He lives in Japan.
He has worked as a successful financial journalist around the world.
His correct forecasting of the Japanese economy is on record (e.g. Euromoney Magazine).
Has been widely praised (see two sites, unsustainable dot org and, fingleton dot net).
Check out the above dot org site for current articles from
this author.
You will be surprised at the articles on there that deal with the press, who widely report a slump in Japan that never seems to happen
- if Japan is in a slump, why such continued strong export performance in the hi-tech area?
Japan may have "crippling" debts, but you can be sure its not
foreign debt and,
therefore much less of a problem, unlike the USA which is burdened by a debt with a large foreign component.
Fingleton rightly points out in this book that the Japanese economy cannot be understood
without looking at it in terms of a big picture.
Read the content on the above sites, think a little,
read this book and, his more recent work "In Praise of Hard Industries" and, you will be a lot farther along the road to understanding where the World economy is going.

It is very difficult to usefully understand anything(the tree`s) unless one has an overall view (the forest) of what is going on. Fingleton has written a book which cuts through all the PR and armchair magazine analysis that has been done on Japan to produce a work which should be read by anybody who is wondering why they have been laid-off or why their garduate daughter can`t get a job. In my opinion his analysis goes a long way towards explaining why Japan will be economically stronger than many countries in the near future. I especially liked the way in which his opinion`s were balanced and pointed the finger at Western countries, particularly, America, for being slow to adapt to Japan`s revolutionary economic structures

for anyone wishing to understand the Japanese economy and the people that make up that economy, this is the book. Fingleton gets beneath the surface-view of Japan that so many Westerners use to describe the country. those who label Fingleton as alarmist or racist follow the lead of typical Japanese thinking that equates criticism of the government's policies with anti-Japanese sentiment.

Fingleton has a deep respect for the Japanese government's ability to manipulate both its own citizens and the U.S. in order to strengthen its economy. The premise of the book is to reveal the mindset of the Japanese government and people so that Americans can better understand how they are viewed by Japanese and respond more adroitly to the challenges of the ever-expanding U.S.-Japan relations.

The most interesting part of the book are the 40 pages devoted to the history of U.S.-Japan relations in the chapter "The Will to Win".

If you need one book to give a well-documented overview of the Japanese economy, this is it!

Fingleton is an alarmist, but that does not detract from his overall message. Alarms exist for a reason.

Controversial books will always draw the ire of the mainstream, and this book is no exception. While Fingleton's specific numerical predictions (e.g., "The Year 2000") may fall short at times, this does not detract from his overall thesis.

As an American residing in Japan, I have often marveled at the paradox of a Japan "suffering through a lethal recession" while still enjoying lower unemployment figures than those of the US, which is currently experiencing a resounding economic "boom".

Having experienced the US recession in the early 1980's, I can personally attest to the fact that what is happening in Japan today is a "horse of a completely different color".

In fact, using the standard definition of "recession", i.e., two straight quarters of economic contraction, the Japanese economy is not even in a recession, never mind a "lethal" one. Japan has yet to experience even a single quarter of economic contraction.

Fingleton attempts to explain the current situation and why the West, and the US in particular, have consistently underestimated Japan's strengths and miscalculated her intentions, often with diasasterous consequences.

To quote author James Fallows:

"A generation from now, readers will recognize 'Blindside' as having offered crucial and prescient guidance... Those who read it now will be ahead of the game."

Highly recommended. For additional reading on the subject, I also recommend R. Taggert Murphy's "The Weight of the Yen".