From: aj843@cleveland.Freenet.Edu (Robert L. Stone)
Newsgroups: sci.research
Subject: Re: Japanese Economic War (?)
Date: 16 Dec 1992 16:24:07 GMT
Organization: Case Western Reserve University, Cleveland, Ohio (USA)
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From: "Robert Stone(student)" <rls@pennsy.med.jhu.edu>
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RS> I'm afraid I fail to see the relevance of this argument.
RS> The
RS> Japanese are not engaging in unfair practices by keeping all
RS> U.S.
RS> (and other 'foreign') companies out of their markets because
RS> the CIA
RS> overestimated the KGB years ago?  Come on!

RF> I'm pointing out the similarity of the reasoning processes, not
RF> adducing an argument about the Japanese from the CIA/KGB fallacy.
RF> You need more practice on reading comprehension.....

RS> While I believe in a free market (as long as it is open to
RS> all)
RS> as well as free government, I fail to see how transferring
RS> the
RS> wealth of the U.S. to Japan at an incredible rate counts as
RS> our
RS> system "having the laws of mathematics on its side."  That
RS> transfer
RS> is in fact taking place at a rate that by the year 2000
RS> Japan will
RS> surpass the U.S. and become the wealthiest country on the
RS> Earth.

RF> Your figures are considerably out of date.  The Japanese are having
RF> lots of problems with "wealth transfer," in fact.  <Rice example omitted>
RF> (Incidentally, the largest foreign ownership share of
RF> US assets is British, not Japanese.  Wonder why we aren't worried about
RF> them? After all, they're a monarchy with a more pervasive feudal system
RF> and an active left-wing party...)

We aren't worried about them because they compete on an equal footing with
U.S. companies (for the most part) in terms of access to markets, etc.  Have
you ever been to the U.K. and seen the number of U.S. products on the market
there?  Since there is free trade with the U.K., economic theory tells us that
both countries will prosper in the long run.  With Japan, however, it's a one-
way street with little to no reciprocity.

RS> Ahh, the classic argument!  "I have the evidence, but don't
RS> feel
RS> like posting it!"  Most often this is used only as a last
RS> resort by
RS> someone who does not have a complete grasp of the topic on
RS> which
RS> they argue.

RF> More flamage.  I refer you to any number of books by Milton Friedman,
RF> Ludwig von
RF> Mises, Friedrich Hayek, along with dozens of articles from the Wall St.
RF> Journal,
RF> Reason magazine, and publications by the Cato Institute, among loads of
RF> others. 
RF> There is plenty of evidence on the side of classical Austrian economics; I
RF> just
RF> don't plan to take up everyone's time and the net's bandwidth in posting
RF> it here
RF> when there are plenty of public libraries for people to read it in.

My problem with your first post is that you didn't give even these references
with it and just said that you had the proof.  While perhaps I stated my case
a bit forcefully, I am sometimes frustrated when reference is made to a line
of reasoning which is assumed to exist by an author.
The Wall Street Journal articles you mention are well known -
advocating allowing Japanese companies to dump goods in the U.S., since they
are 'wasting their money.'  Unfortunately, this leads to shutdown of U.S.
industry and when accomplished prices go up.

RS> I sincerely hope that Americans will soon wake up to the
RS> economic
RS> threat from Japan in time to alter our laws in such a way as
RS> to
RS> become a mirror of their trade laws and thereby force them
RS> to make
RS> their policies fair.  Hopefully, they will one day

RF> So we are to defeat the Japanese by becoming just like them?  Sounds more
RF> like surrendering to their world view to me.  In a world without free
RF> trade, everyone will become poorer.  Consult the works of David Ricardo
RF> on comparative advantage for further details the relevant economic theory.

No, it's playing them at their own game by their rules.  If you play chess
while I play Monopoly, and the only rule about money exchange is that I 
collect $200 from you each time I pass GO, it doesn't matter how good you
are at chess - you will lose.
Economic theory does clearly show that totally free trade between countries
benefits all countries involved in the long run because the markets regulate
themselves and supply and demand shapes the world economy.  In the case of
trade with Japan, however, the trade goes only one way and has the long-
term effect of draining capital from the U.S. to Japan. 
Some have argued that Japan is an excellent customer of the U.S. and this
is true - but only when it comes to buying U.S. means of production, keeping
the profits headed back overseas!

RS> discontinue their
RS> economic offensive and fully participate in free
RS> *multi*lateral
RS> world trade, which will be to the benefit of all.  Until
RS> that day,
RS> however, we must learn to look after ourselves and not
RS> naively
RS> depend on the benevolence of others.

RF> Funny, I thought that is what I was arguing for--looking after ourselves
RF> in the traditional individualistic American way.

Exactly. And this time looking after ourselves involves altering our laws to
keep other countries from taking advantage of them - until their laws change.

RF> Just one further comment:  The reason that Japan cannot become an
RF> effective democracy until it changes its ways (or will change its ways
RF> as soon as it does become a true democracy) is that the mass of 
RF> Japanese consumers are paying for the success of a few giant
RF> corporations and their managers.  As the original posting pointed out,
RF> prices are kept high in the home market, middle class Japanese live far
RF> more poorly than do comparable Americans, and the half of the Japanese
RF> population without a Y chromosome are almost completely shut out of any
RF> form of self-realization in their system.  To the extent that the US
RF> pressures Japan, we give them an external bogeyman to blame for their
RF> problems.  A free-trade policy by the US will leave that argument
RF> unsupported; we just have to sit back and wait for the inevitable
RF> upheaval from within.  It already happened in the former Soviet Union
RF> with the defense race of the early to mid-80's; free trade is our most
RF> potent weapon against the managed traders of the world.

RF> Roger.Firestone@f349.n109.z1.fidonet.org

I agree with the premise, that Japanese consumers are treated badly and
that women have almost no say in their society.  Free trade, however, is
NOT a weapon when it comes to competing with Japan.  It is an Achilles
heel - a vulnerability for the Japanese to exploit.  I believe that by
showing strength in trade (and trade laws) the U.S. might be able to re-
earn the respect of the Japanese, who generally think of the U.S. as 
full of lazy mixed-race people.  See the book "Japan That Can Say No!
(to America)" for details.  While this is (hopefully) not the prevailing
view among average Japanese citizens (in fact many like things associated
with America) it is apparently the view of those at the top.

-rls


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-- 
   _____  __    _______"Wake the neighbors and phone the kids,
  / __  // /   /  ____/it's time for viewer mail. Actual letters
 / /_/ // /__ /____  /from actual viewers, if they weren't, could
/_/ |_|/____//______/I do this?" aj843  (Bob Stone, Baltimore MD)
Newsgroups: sci.research