Labor Markets and Firm Benefit Policies in Japan and the.pdfVIP

This PDF is a selection from a published volume from the National Bureau of Economic Research Volume Title: Labor Markets and Firm Benefit Policies in Japan and the United States Volume Author/Editor: Seiritsu Ogura, Toshiaki Tachibanaki and David A. Wise, editors Volume Publisher: University of Chicago Press Volume ISBN: 0-226-62094-8 Volume URL: /books/ogura03-1 Conference Date: January 20-23, 2000 Publication Date: January 2003 Title: Changing the Guard: The Rise of the United States to Peak Capitalist Economy Author: Richard B. Freeman URL: /chapters/c10301 1 Changing the Guard The Rise of the United States to Peak Capitalist Economy Richard B. Freeman 1.1 Introduction At the turn of the twenty-first century, many analysts view the United States as the peak capitalist economy—the economy whose institutions other countries should emulate. With an unemployment rate below 4 per- cent in 1999-2000—lower than in Japan or Germany or other European Union countries—a huge federal budget surplus, declines in crime, a booming stock market, rapid productivity growth, and the integration of welfare mothers into work, the United States seemingly found the magic formula for economic success in the new millennium. A decade or so earlier, analysts saw the United States in a very different light. In the 1970s and 1980s most viewed Japan as the peak capitalist econ- omy, whose institutions other countries should emulate. American business leaders feared Japanese competitors to the extent that they made the four- teenth-century samurai warrior Miyamoto Musashi’s A Book of Five Rings (1982) a best-seller on the business charts. Financial experts saw Japanese banks as the 800-pound gorillas on financial markets and wondered if lead bank-financing and monitoring firms worked better than stock market monitoring of performa