Circles of Compensation: Economic Growth and the Globalization of Japan

Japan grew explosively and consistently for more than a century, from the Meiji Restoration until the collapse of the economic bubble in the early 1990s. Since then, it has been unable to restart its economic engine and respond to globalization. How could the same political–economic system produce such strongly contrasting outcomes?

This book identifies the crucial variables as classic Japanese forms of socio-political organization: the "circles of compensation." These cooperative groupings of economic, political, and bureaucratic interests dictate corporate and individual responses to such critical issues as investment and innovation; at the micro level, they explain why individuals can be decidedly cautious on their own, yet prone to risk-taking as a collective. Kent E. Calder examines how these circles operate in seven concrete areas, from food supply to consumer electronics, and deals in special detail with the influence of Japan's changing financial system. The result is a comprehensive overview of Japan's circles of compensation as they stand today, and a road map for broadening them in the future.

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Kent Calder is currently Director of the Reischauer Center for East Asian Studies at SAIS/Johns Hopkins University in Washington, D.C. Before arriving at SAIS in 2003, he taught for twenty years at Princeton University, and has also been Distinguished Visiting Professor at Seoul National University, Visiting Professor at Yangon University, and Lecturer on Government at Harvard University. Calder, a member of the Council on Foreign Relations since 1990, served as Special Advisor to the U.S. Ambassador to Japan (1997-2001), Japan Chair at the Center for Strategic and International Studies (1989-1993 and 1996); and as the first Executive Director of Harvard University’s Program on U.S.-Japan Relations (1979-1980). Calder received his Ph.D. from Harvard University in 1979, where he worked under the director of Edwin O. Reischauer. He is the author of ten books on East Asian political economy, energy geopolitics, Japanese politics, and US-Japan relations, including most recently Singapore: Smart City, Smart State (Brookings, 2016) Asia in Washington (Brookings, 2014), The New Continentalism (Yale, 2012); Ten of these books have been translated into Japanese. Calder was recently awarded the Order of the Rising Sun, Gold Rays with Neck Ribbon, for his contribution to Japan-US relations, and to the academic study of Japan.