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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: David S. who wrote (5797)	8/23/1998 5:36:00 PM
From: Frodo Baxter	Read Replies (4) \| Respond to of 9980

for personal use only: Barron's Review Trading Places, The U.S. Trumps Japan Japan Edited By Scott Reeves Ten years ago, the U.S. auto, consumer electronics, semiconductor and steel industries were battered by Japanese competition. Trophy assets such as Rockefeller Center were snapped up by the Japanese. The yen continued to rise, along with the U.S. trade deficit. This led some to conclude that Japan and the U.S. were trading places as the world's leading economic power. Chalmers Johnson detailed the apparent change in his 1982 book MITI and the Japanese Miracle. Clyde Prestowitz added Trading Places: How We are Giving Our Future to Japan and How to Reclaim It. And Karel van Wolferen added The Enigma of Japanese Power. The writers shared a common theme: Japan's unique form of state-directed insider capitalism had outpaced Anglo-American free-market capitalism, and competitiveness de-manded adoption of the Japanese model. But the revisionists got it wrong. Japan's economy is battered and the U.S., despite its recently roiled stock market, is strong. Nations throughout the Pacific Rim are adopting free-market reforms and casting off crony capitalism. ''The revisionists' doom-and-gloom prophecies could not have been more wrong,'' Cato Institute researchers Brink Lindsey and Aaron Lukas conclude in a recent report. ''All their errors trace back to a common source: an inability to understand and appreciate the power of free markets. Suffering from what Nobel Prize-winning economist F.A. Hayek termed the 'fatal conceit,' they believed that a handful of government planners could out-think millions of private decision makers-could pick 'strategic' industries, allocate capital in defiance of market signals, and prop up the stock market and real-estate values. Like so many others before them, they prided themselves as sophisticated realists, yet in fact their faith in bureaucratic miracles was hopelessly naive.'' Looks like online trading is the next step in the free allocation of capital. Call it power to the people. Perhaps the revisionists now will be able to understand why a company such as E*Trade Group developed in America, rather than in Japan.