Americans persist in thinking that Adam Smith's rules for free trade are the only legitimate ones. But today's fastest-growing economies are using a very different set of rules. Once, we knew them—knew them so well that we played by them, and won. Now we seem to have forgotten
IN Japan in the springtime of 1992 a trip to Hitotsubashi University, famous for its economics and business faculties, brought me unexpected good luck. Like
several other Japanese universities, Hitotsubashi is almost heartbreaking in
its cuteness. The road from the station to the main campus is lined with cherry
trees, and my feet stirred up little puffs of white petals. Students glided
along on their bicycles, looking as if they were enjoying the one stress-free
moment of their lives.
They probably were. In surveys huge majorities of students say that they study
"never" or "hardly at all" during their university careers. They had enough of
that in high school.
I had gone to Hitotsubashi to interview a professor who was making waves. Since
the end of the Second World War, Japanese diplomats and businessmen have acted
as if the American economy should be the model for Japan's own industrial
growth. Not only should Japanese industries try to catch up with America's lead
in technology and production but also the nation should evolve toward a
standard of economic maturity set by the United States. Where Japan's economy
differed from the American model—for instance, in close alliances between
corporations which U.S. antitrust laws would forbid—the difference should be
considered temporary, until Japan caught up.