Marketcraft

Reviewed by: Marketcraft: How Governments Make Markets Work by Steven K. Vogel Leonard J. Schoppa (bio) Marketcraft: How Governments Make Markets Work. By Steven K. Vogel. Oxford University Press, New York, 2018. x, 187 pages. $34.95, cloth. Steven Vogel has written an ambitious book that challenges the orthodox view that "regulation" stands in opposition to "markets," by reflecting on economic reforms in Japan and the United States over the 35 years that [End Page 459] have passed since Prime Minster Nakasone Yasuhiro and President Ronald Reagan launched "neoliberal reforms." Vogel has been writing about economic reforms in Japan and other advanced industrialized nations since the start of this reform era, so he is in an excellent position to summarize what has changed and what has not changed over this period, and how it all fits together. But what makes the book stand out above others that have taken up similar material is its attempt to draw from this experience insights about the nature of political economy in our contemporary era that will force scholars who mostly write about the economies of Europe and North America to pay attention to Japan again. At the height of Japan's postwar growth era, back in the 1980s, Chalmers Johnson succeeded in bringing Japan's "developmental state" into the forefront of academic and popular discussions of political economy with his book MITI and the Japanese Miracle (Stanford University Press, 1982). Ronald Dore accomplished something similar with his books about how long-term relationships between firms, workers, and the Japanese state presented a model that was more productive and kinder than Anglo-Saxon capitalism. These insights, based on intensive fieldwork in Japan, were read and incorporated by leading scholars of comparative political economy into works that are still widely read in PhD seminars. Peter Hall and David Soskice's Varieties of Capitalism (Oxford University Press, 2001), for example, treats Japan and Germany as the exemplary cases of "coordinated market economies" that contrast across numerous dimensions with the "liberal market economies" of the United States and Britain. Johnson's and Dore's landmark research on the Japanese model examined a system that was in place from 1950 to 1985: just 35 years. It has now been about the same number of years since Nakasone began reforming the Japanese economy, and yet most pundits and scholars outside Japan studies (not to mention President Donald Trump) seem stuck on the views of the state-led, "coordinated" economy that were described at the height of the economic miracle. Most are aware that the model has not worked very well since the collapse of the bubble economy in 1990, but they have not been presented with an overview of the contemporary Japanese economy that compels them to update their understanding of the model. Vogel's book seeks to accomplish that task. Vogel's main argument is that there is no such thing as a "free market," except in the abstract theories of economists. All real-world markets require rules, regulations, and norms that structure deals between participants in the markets and make them function. As a result, there is also no such thing as "deregulation," since one cannot remove all of the rules and return to a "market" state of nature. All attempts to bring market forces to bear in areas that were previously dominated by regulated monopolies (e.g., telecommunications in the United States before the breakup of AT&T; electricity in [End Page 460] Japan), or public corporations (e.g., NTT and Japan National Railways in Japan) require more regulation, not less. Similarly, bringing market forces to bear on areas where the state managed supply and prices via regulations, or where private cartels managed supply and prices through collusion, requires more regulation rather than less. This framing of the problem faced by advanced industrialized nations leads Vogel to challenge the tendency of scholars and pundits to treat "deregulation" or the movement from "coordinated market economy" to a "liberal market economy" as a simple matter of liberating the market from government interference. The real challenge is to put in place and develop interrelated sets of regulations and norms that will allow competitive markets to function where they did

Economic history · Economic miracle · Economics · Miracle · Opposition (politics) · Political science · Politics · State (computer science) · China's Socioeconomic Reforms and Governance · Corruption and Economic Development · Law · Political Economy and Marxism