The Fable of the Keiretsu: Urban Legends of the Japanese Economy

For Western economists and journalists, the most distinctive facet of the post-war Japanese business world has been the "keiretsu, " or the insular business alliances among powerful corporations. Within "keiretsu" groups, argue these observers, firms preferentially trade, lend money, take and receive technical and financial assistance, and cement their ties through cross-shareholding agreements. In "The Fable of the Keiretsu, " Yoshiro Miwa and J. Mark Ramseyer demonstrate that all this talk is really just urban legend. In their insightful analysis, the authors show that the very idea of the "keiretsu" was created and propagated by Marxist scholars in post-war Japan. Western scholars merely repatriated the legend to show the culturally contingent nature of modern economic analysis. Laying waste to the notion of "keiretsu," the authors debunk several related OC factsOCO as well: that Japanese firms maintain special arrangements with a OC main bank, OCO that firms are systematically poorly managed, and that the Japanese government guided post-war growth. In demolishing these long-held assumptions, they offer one of the few reliable chronicles of the realities of Japanese business."