Blinded by the Sun

Oren Grad from the November 1994 issue

(Page 3 of 3)

That's because Emmott makes no attempt to justify grand ideas. He simply assumes that neoclassical economic theory holds within a certain domain of validity. His books relentlessly pile up concrete details to build his case that the phenomena he describes are indeed understandable on his terms. But recall Fallows's gripe that neoclassical economics fails to explain differential growth adequately. By confining himself to a neoclassical framework, Emmott fails to address satisfyingly the underlying fears which give the revisionist approach its appeal.

These fears are perhaps more about ourselves than about Japan. Suppose, for example, that in all of the dimensions that matter, Japan is indeed converging on the West and is destined to settle into a respectably sluggish economic middle age typical of other G7 countries. Even if Japan were to negotiate the transition to slower growth without serious social mishap, we would still face a far greater challenge to our thinking about economy and society than any posed by Japan in miracle-growth mode. On present trends, we would be left with a situation in which developed nations settle into an indefinite period of slow growth, while rapid development is limited to nations playing catch-up.

Libertarian ideals are closely linked in the American psyche with ideas of steady progress and unlimited frontiers. Their survival depends on the identification and wide cultivation of those extra-economic virtues and habits which make continued growth possible. In that sense, at least, Fallows's alarm is a timely one. We still have our work cut out for us.