Japanese developmentalism, which emerged in 1931–45 to combat the Great Depression and to sustain total war, was transformed from the military version to a trade version in the postwar period through several encounters with liberal capitalism, including the democratic reforms, the implementation of the Dodge Plan, and the liberalization of trade and capital investment. By the end of the 1960s, the contemporary Japanese economic system was largely patterned. During the transformation, many components of the wartime legacies were reformed, upgraded, and even transcended. Nevertheless, the focus on the national economy, the strong production orientation, the strategic view of the economy, the restraints on market forces, and the rejection of the profit principle remained as the basic ideological framework of Japanese industrial policy and were institutionalized in the governance mechanisms of the economy.

How does the later history shed light on these debates in 1931–65 documented in this book?

Between the first oil shock in 1973 and the end of the Cold War in 1989, Japanese developmentalism, exemplified by these debates, demonstrated great strength in international competition. It enabled the Japanese economy not only to respond successfully to two oil shocks in the 1970s, but also to cope effectively with the rapid appreciation of the yen resulting from the Plaza Agreement in 1985. Bypassing Britain and France in 1967 and West Germany in 1968 in total GNP, Japan has become an economic superpower, second only to the United States. In 1975, for the first time in the postwar period, Japan was invited to attend the summit meeting of major industrialized countries.