Japanese in Control, Political_Science, College Term Papers.com


		Data Bases
		• Custom Term Papers • Free Term Papers • Free Research Papers • Free Essays • Free Book Reports • Plagiarism?

		Links
		• Top 100 Term Paper Sites • Top 25 Essay Sites • Top 50 Essay Sites • Search 97,000 Papers @ DirectEssays.com • Search 101,000 Papers @ ExampleEssays.com • Search 90,000 Papers @ MegaEssays.com

		Free Essays
		• Term Paper Sites • Chuck III's Free Essays • Free College Essays • TermPaperSites.com • My Term Papers • Get Free Essays • Essay World • Planet Papers

Search Lots of Essays

Back to Subjects - Political Science

Japanese in Control

Japanese in Control Americans who buy Japanese goods, or even US companies that actively source Japanese parts for their products unknowingly help Japanese reach the goal of their economic war. America often complains that Japan must change its ways to become more like us. However, this is not true, as America is not number one anymore. Today, the tables are turned. America, which used to be the world’s largest creditor nation, is now the world’s largest debtor nation. Currently, Japan is the world’s largest creditor nation and we are one of their biggest borrowers (Burnstein 77). Their strategies have helped Japanese industries take over in America. Moreover, Japan has taken control in the economic war with America. Japan is a major or dominant power in almost every world strategic industry including finance, communications, mass-transit, semi-conductors, motor vehicles, and popular-entertainment. Two of the three biggest movie/entertainment companies in America (Universal/MCA), the makers of "Jurassic Park", and Columbia/Tri-star are Japanese. Many big companies in the US like Loews Theatres, and Firestone Tires are Japanese. In fact, today 7 of the 10 largest companies in the world are Japanese. Furthermore, Japan today is the world's biggest manufacturer of autos, having surpassed the United States in the mid 1980's. These all used to be American dominated industries 25 years ago (Information Please! 144). Some claims echoed in America that are commonly dismissed as “Japan Bashing” statements, upon investigation these claims are in fact truthful. The following statements may seem brash right now, but their meanings will become clearer in the explanations and examples that follow. Japan is in a kind of economic war against us. Their objective is for them to win and for us to lose. Through the use of cartels, price fixing, government-corporate "anti-foreigner" tactics as well as adversarial trade and predation strategies, Japan is greatly weakening much of America's strategic industries, standard of living and national security. These actions are also destroying the jobs of ordinary American people. While America is being complacent with its industries, the greatest transfer of wealth in the history of the world from one country to another is happening right now, from the United States, to Japan (Melloan A15). Those who study these types of topics know that economic wars can be even more devastating to a country's long term future than conventional wars. Japan is organized to fight, employs a world economic strategy and has a fundamental plan. America's economic strategy is in disarray and there is no plan. As a result, America is losing the economic war by default. A very famous example of Japanese national government and corporate coordination to take over a foreign industry is that of the Japanese TV cartel, first set up in the 1960's. This is how Japan took the free-world TV industry away from the United States (Sato 32). In the 1960's, the Matsu*censored*a Industrial Electric Company, Sanyo, Toshiba, and others formed a TV cartel in Japan. They got US TV technology from the giants in the industry (Zenith, RCA, and Quasar) in the following way. The Japanese government prohibited US made TVs from being sold in Japan. Instead, they insisted that the technology be licensed to Japanese manufacturing companies rather than importing (still often the case today in Japan). The US companies thinking they could still make money this way, agreed to these terms which enabled the Japanese companies to acquire the technology on how to build TV’s (Sato 35). The above Japanese companies, with tacit approval from the Japanese government, set up a cartel to inflate TV prices in Japan in order to turn around and use the money to sell below cost TVs in America. This was to drive US makers out of the American and world markets. US TV makers went bankrupt or left the industry, as they could no longer fund research to continue making improved and high quality TVs. They could not compete with the artificially low Japanese TV prices in America and were forbidden to enter the Japanese market to take advantage of the high prices there. Hence, the US makers could not make money. Furthermore, secret deals to spoil US customs, which are illegal under US trade law, were set up by Japanese TV makers and US retailers such as Sears and Montgomery Ward to sell Japanese TVs under store brand names. At the same time, the Japanese mounted an important lobbying effort in Washington to ensure that this scheme was not disrupted by the US government or customs services. As a result, once famous brands such as Sylvania, Quasar, Admiral, Philco and RCA have vanished or are foreign/Japanese owned. Zenith is the only remaining US TV maker today. No US companies make VCRs although they were an American invention (Choate 63). In the 1980's the Japanese applied this same strategy to the computer flat panel display industry (also invented in the US) and now completely dominate that industry as well. Before that, they took over motorcycles, machine tools, and computer memory chips (Melloan A15). It will be happening again in the financial services industry, telecommunications equipment, kitchen/washing appliances and aircraft manufacturing during the twenty-first century. Several misleading claims are made in the media about how the trade situation today with Japan is fine. These will now be dispelled. One claim states that Japan is opening its market because it has increased imports by 9% in 1986-87 and 18% in 1988. This is a half-truth because Japanese exports during the same period increased by much more than that. In other words, the trade gap got bigger, not smaller between Japan and its trading partners. Furthermore, the trade deficit with Japan is actually worse than it appears to be. This is because Japanese goods manufactured by Japanese plants in other Asian countries and sold in the US do not appear in the US trade deficit figures with Japan (Schlesinger A11). Another false claim, most often made by Japanese trade representatives, states that it is naturally expected and ok that Japan has a trade surplus with America (Schlesinger A11). This is because if every Japanese bought $100 of goods from America, and every American bought $100 worth of goods from Japan, an imbalance would occur in Japan's favor as there are twice as many Americans as Japanese in the world. In the real world though, this is not ok, and cannot happen for very long without serious consequences. To see more clearly this picture, imagine a world with 2 countries, one with 100 citizens, and another with 1 citizen, you. Each person has $200 to his or her name. Every year you buy $100 of goods from the other country, and each of their citizens buys $100 of goods from your country. If you work out this example, you will see that in a little over two years, you will have accumulated all of the money in the world and the other country will be penniless. This is the current state of affairs between Japan and its trading partners. Although things are actually occurring more slowly, this is the trend. An extensive chain of command of small distributors and shops exists in Japan, which deters the distribution of foreign goods. When Americans say the Japanese distribution system is "difficult" or "complex", this is what they are referring to. In reality, the Japanese distribution system is fixed. This is why it is so difficult and complicated for the foreigner to succeed in the Japanese market. Since Japan is a communal society, it follows a strict code of loyalty. Shopkeepers have loyalty to their suppliers and customers. They also have loyalty to the nation, Japan. Undoing this arrangement that brought the country and its companies so much wealth and power via the entry of foreign goods would be disruptive to this system of loyalty. This is one reason it is so difficult for a foreigner to enter the Japanese market. There are higher forces at work too though. Their strategy includes business license paperwork (belonging to American entrepreneurs) getting misfiled or lost without explanation causing legal hardship. Also, goods will be delayed unloading off their ships because of “too busy customs officials” or “lost somewhere on the pier for 6 weeks” making them miss deliveries and angry customers. The consequences of the above tactics are seen in the US and Japan today. Hoover and GE make very few sales in Japan while Sanyo; Toshiba and all others sell many vacuums and appliances here in America. Ultimately, this weakens US firms like Hoover and GE and may one day cause them to leave these industries entirely. A US lamp manufacturing company encountered exactly this problem. It took them 9 months to get lamps off the ship sitting in the harbor and into retail stores in Japan after customs, and other government agencies stalled and stalled, which cost this company lots of money (Morrow 19). Making foreign goods (i.e. food, or apparel) which compete against domestic Japanese products wait on ships long enough to rot or not be desirable to the consumer is another practice. Many anti-foreign goods laws are often written in the form of "protection" to the consumer. These are applied discretionary and are really written to prevent or make it expensive, slow, or impossible for foreign goods to enter the Japanese market (Morrow 19). For example, one well-known Japanese tactic is the intentional use of too few "inspectors" who are responsible for "inspecting" every single one of an importer's products entering Japan (i.e. bicycles or cars). As every item must be individually "inspected" very carefully, this takes very long to do. This intentional holdup costs the importer lots of money as well as preventing timely delivery to the customer. Competing Japanese made goods are often exempt from these “consumer protection” laws as inspection is “done at the factory by the Japanese manufacturer”. As an example of a consumer "protection" law really created to prevent foreign competition in Japan, one may look at the auto industry. All non-Japanese cars that enter Japan today must be "safety-tested" by Japan for "safety to the consumer". The fee for this "safety-test" is several thousand dollars PER CAR imported and must be tolerated by the importer (and consequently the buyer) of the car. Cars made by Japanese companies (even if they originate from foreign Japanese plants such as the US Honda Accord plant) are exempt from the inspection and the fee since Japanese car companies are permitted to "safety" their cars themselves at their factories. The result of this practice is to make the prices of non-Japanese brand cars uncompetitive against Japanese brands sold within Japan. This law adds $5000 to the price of each US car for sale in Japan (Sato 97). To further discourage non-Japanese car purchases in Japan, auto insurance rates for non Japanese brand cars in Japan have been rigged by auto producers (who own many of the insurance companies) to be three times higher than rates charged for equivalent Japanese brand cars (Choate 156). It is these practices and laws that prevent US car companies from making headway in the Japanese market. Cartel or keiretsu is another financial strategy employed by Japan to conquer America economically. Keiretsu are business groupings that loosely linked “super-corporations”. Most of the Japanese companies whose brands we know and love here in the United States are in these cartels. Famous companies like Nissan and Toshiba are all in these cartels (Sato 147). This is important because each of the keiretsu has member companies under them who operate in each of the major critical business area. These include banking, distribution, steel making, and manufacturing. Each of the companies in the cartels is independent and very focused in what they do in all senses of the word except for loyalty. Their individual independence is what keeps things from getting too complicated and out of control. However, they are able to unite for issues important to the national or keiretsu effort. Every cartel has a bank that is the heart of the alliance and is similar to a national central bank. The bank takes foreign cash from winning companies in the keiretsu and gives it to new gambles in the union with out limiting them. This banking system is what enables Japanese companies to make very long term investments which US firms cannot make (since US investors are usually more reluctant to risk and are not as patient for returns as Japanese cartel banks are). In upcoming technologies such long-term investment before any payoff is vital. In these types of technologies Japanese firms, due to cartel banking, have enormous financial advantage over western companies which are not allied with each other. As a result, Japanese firms in keiretsu groups are much more likely than US firms not involved in keiretsu to invest large sums of money in long term projects. Therefore, their way of banking turns out to be more efficient and helpful to industries over ours. As a result, Japanese firms ultimately defeat foreign competitors and win in the market. Ironically, many US banks and investors, aware of what happens to industries targeted by the Japanese, act oppositely, avoiding to loan money to US company in an industry besieged by the Japanese (Hillenbrand 20). US investors know that it is almost impossible for independent US companies to survive against organized Japanese cartels and consequently, tend to abandon such US firms. This fact puts US companies at a brutal disadvantage against Japan. This is also the reason US firms try not to enter or strongly compete in a given market today dominated by the Japanese such as consumer electronics. This keiretsu financial strategy allows Japanese companies to out finance all other foreign competitors and ultimately take over almost any industry they choose. The above reasons are why buying Japanese products, even in an industry unrelated to the one who works in it, can actually cause the consumer to loose his job! This is much more likely than anyone may think. Japanese take the profit from a product a person buys (like a car), and transfer it, through the keiretsu bank, to develop, invest in, and dump products into the industry that person works in, which eventually puts them out of a job. Another clever tactic Japan employs to defeat American industries is perfecting products within their country. They will only sell the product outside of Japan once it has been perfected. Japanese industries fix the problem a product has tests it in their home market, and later export it abroad. This is why a lot of products hit the Japanese market before anywhere else. What they do next is sell their products at three-forth the cost to make in order to make it increase their market share and drive American industries out of business. The Japanese industry does not lose money as one may think. In order to make up for the loses, they sell the products at twice the cost in the home market. America would lose even if they tried to use the same strategy because American product are almost prohibited in Japan, and Japan would still dump their perfected goods in America, which unperfected American goods could not compete against. More so, prices can not be artificially raise to pay for dumping elsewhere since the US market is open to other countries. Accordingly, our industries lose to Japan. In addition, their successful take over of the LCD screen industry is helping them take control of more than one American industry (Morrow 19). These are special flat screens found on almost every portable computer today. Several years back, Japanese industry coordinated a successful attack to take over the entire world commercial supply of the LCD computer screen by selling them at one-third the price to make them, and waiting for small US upstarts to go bankrupt. As a result almost all LCD screens in the world are made in Japan. They have created a monopoly. This is very key point because these screens will be used in an array of products including portable computers, medical imaging equipment, videophones, HDTV, touch sensitive visual programming, etc. (Morrow 19). Every non-Japanese industry of any of these products will have to depend on the Japanese to buy these screens to put in their products. However, the Japanese companies also want to make the computers, HDTV, etc. and make America uncompetitive. As a result, they raise the cost of the screens to American industries that are forced to pay the inflated prices (since they have no other supply). This means American products will be more expensive than the Japanese ones and will eventually put them out of business. Once again, America loses. The Japanese have used several strategies including cartels, monopolies on LCD screens, and dumping products in the US to take a leap ahead of us economically. They have been quite successful industrially. Unfortunately, their success is paralyzing the American economy, stopping it from prospering as it should, and contributing to the US National debt. Japan’s unstoppable victory against us has helped them gain the position of being the richest country in the world, a position America used to hold. Works Cited Bibliography: Choate, Pat. Agents of Influence. New York: A.A. Knopf, 1990. Hillenbrand, Barry. “America in the Mind of Japan.” Time 139 February 1992: 20-21 Information Please!. Boston: Information Please LLC, 1997. Melloan, George. “Japan’s Economic Machine Needs an Overhaul.” Wall Street Journal 1 March 1993: A15. Morrow, Lance. “Japan in the Mind of America.” Time 139 February 1992: 16-19 Sato, Ryuzo. Global Competition and Integration. Boston: Kluwer Academic Publishers, 1999. Schlesinger, Jacob. “Japan’s Trade Surplus U.S. Likely is Wider if Output Elsewhere is Included.” Wall Street Journal 1 March 1993: A11.

Word Count: 2868