One of my favorite questions as an unashamed Japan optimist is ¡°what is the biggest problem of the Japanese economy?¡±
The answer is simple: Japan suffers from too much competition. Deflation, low profitability, poor investment returns, subpar foreign direct investment, falling tax revenues, you name it. Many of the ¡°Japanification¡± problems can be explained by Japan¡¯s unique ability to feed ever-more relentless competition.
In fact, Japan has long surpassed the United States as the world¡¯s leading example of a free market economy. This assertion may run counter to the standard mythology, in which Japan is often described as a kind of ¡°socialism that works.¡± But a look at the facts leaves no doubt that Japan, not America, is the world¡¯s beacon of free market competition.
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