IDEAS home Printed from
   My bibliography  Save this paper

The Fable of the Keiretsu, and Other Tales of Japan We Wish Were True


  • Yoshiro Miwa

    (Faculty of Economics, The University of Tokyo)

  • J. Mark Ramseyer

    (Harvard Law School)


Most of what we collectively think we know about the Japanese economy is urban legend. In fact -- * The keiretsu do not exist, and never did. An entrepreneurial "research institute" in the 1950s created the rosters to sell to Marxist economists looking for the "monopoly capital" that their theory told them would dominate their "bourgeois capitalist" world. Western scholars hoping for examples of culture-specific forms of economic organization then brought them back to the U.S. * The zaibatsu did not succeed pre-war because they bought politicians, exploited the poor, or manipulated disfunctional capital markets. They succeeded for all the usual varied reasons a few firms succeed in any modern economy. They acquired the (perjorative) zaibatsu label because they happened to be thriving when muckraking journalists in the 1920s and 30s came looking for someone to blame for the depression. * Japanese firms have no "main bank system," and never did. Economists popularized the idea as an anecdote on which to peg their mathetical models, and non-economists use it (like the keiretsu) as yet another putatively culture-bound economic phenomenon. * Japanese firms are neither short of outside directors nor badly governed. The charges simply represent yet another variant on populist journalism. Like firms in other competitive capitalist countries, Japanese firms survive only if they adopt governance mechanisms appropriate to the markets within which they must compete. * The Japanese government never seriously guided or intervened in the Japanese economy. When the economy boomed, politicians and bureaucrats did take credit. They had created the success through their own faresighted leadership, they claimed. Marxist scholars dominated Japanese social science departments, and they were not about to suggest instead that market competition might account for the success. Happy as they were to find an example of successful government intervention, neither were most Western scholars of Japan.

Suggested Citation

  • Yoshiro Miwa & J. Mark Ramseyer, 2004. "The Fable of the Keiretsu, and Other Tales of Japan We Wish Were True," CIRJE F-Series CIRJE-F-278, CIRJE, Faculty of Economics, University of Tokyo.
  • Handle: RePEc:tky:fseres:2004cf278

    Download full text from publisher

    File URL:
    Download Restriction: no

    Other versions of this item:

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tky:fseres:2004cf278. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CIRJE administrative office). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.