The pre-war economy of Japan was a Socialist economy and the country was ruled by an emperor up to WW2. After WW2 it started to lean towards a mixed market economy until what it is today. Although its government is Socialist it is leaning towards a mixed market economy. It is like this because almost all businesses are run by private corporations or people and that is the market in the economy. The reason they are thriving and are so competitive is because of the trade tariffs and quotas that the government has in place. These regulations include heavy taxes on some products and denial on some others for example: the way Japan will only let certain foreign cars in to Japan and even then they are so heavily taxed that the average Japanese person can’t pay that much and will have to buy a Japanese made car while at the same time in other countries they are selling their cars for less than anyone else in that country and that is what they do with most of their products and is how they get a trade surplus year after year.
Manufacturing is the most important economic activity in Japan – it accounts for about 28% of it’s GDP. The Japanese people import more than half of the products that they manufacture from other countries in their crudest form and manufacture them into transportation equipment, iron, steel, chemicals, petroleum and coal products and textiles. Most of these products are produced by large corporations with many employees. An aspect of a market economy that Japan has is the way the companies treat their workers. The way the Japanese treat their workers is so different from the way we treat our workers here. The Japanese are so much more respectful towards their employee (the exact opposite from other countries especially those with a centralised economy) and often work for one employer until retirement. Some of the special treatment that the workers receive is housing; some of the companies namely Honda have a special housing unit for their workers and their families and a company cemetery for all the workers and their families. Because of this the employees work habits are much more productive and a larger profit can be churned. In centralised economies very few luxuries are returned to the people and in market economies most of them are. In Japan there are two kinds of people- farmers and city dwellers, the farmers get no luxuries and live in poor conditions while the city dwellers on the other hand get just about all the luxuries like mass transit, hospitals and job financial security. The government keeps whatever is necessary & whatever the people will buy and will export the rest. In the farmlands there is a strong sense of a command system and in the city there is capitalistic economy.
Farming is one of the larger employers in Japan; it employs 9% of the work force but it only accounts for 3% of the GDP. There are few government owned companies- the only ones they own are some power plants, railways and some airlines as well as the commuting services and civil services. The government employs about 1 in 10 people in Japan mostly through civil services. There are some strict regulations set forth by the government to ensure that the country’s stores are filled with Japanese goods rather than foreign goods and they include trade restrictions such as tariffs, bands and quotas.
After reviewing all this evidence the Japanese economy is leaning heavily towards a market economy but does have some socialist government views and laws though the market out weighs the command.