Embedded Capitalisms Under Siege: Japan and Germany

For several decades, Japan and Germany both embraced capitalist systems that rewarded patient capital and patient labor. Maximizing short-term profitability was valued less than was longer term predictability and social cohesion. Since at least the late 1980s however, both countries have seen their former systems subjected to massive outside economic pressures – pressures often summarized as “globalization”. Both the German and Japanese political economies have since confronted dramatic slowdowns from their previous growth rates and the systems as a whole have been subjected to massive reassessment. Interestingly, however, pressures on Japan have come primarily within capital markets whereas those in Germany have been most acute in labor markets.

T.J. Pempel is Boeing Professor of International Studies at the University of Washington. He has written extensively on problems of Japanese and comparative political economy. His most recent books are Regime Shift: Comparative Dynamics of the Japanese Political Econom (1998), and The Politics of the Asian Economic Crisi (1999), both in paperback from Cornell University Press.