Collective Capitalism: A look into Japan's Economy and Corporate Culture

History and Reason for Implementation 

Following its disastrous defeat in World War II, Japan underwent a massive social and economic reorganization program. For the next several decades, Japan transformed from a lagging. newly industrialized nation to becoming a modernized economic powerhouse. Indeed, Japan's industrial growth was outstanding, eventually becoming the third largest economy in the world.  Not only did industrialization improve the standard of living, but it also changed Japan's economic mentality. By the 1980s, Japan had fully embraced capitalism in its own unique way. 

Analysis of Model

Japan's interpretation of capitalism has often been referred to as collective capitalism. In this system, workers, especially those who work for large corporations like Sony, have a relationship with their employer that is unlike that of any other developed country. In an almost filial way, workers pour in many hours of hard work and loyalty in return for almost a life-time employment, social protection, status, and pension.  In this unique system, the worker's livelihood is at the mercy of the corporation he or she works for. This complete domination of the employee by the employer has a created a very stratified and hierarchical corporate culture that both promotes hard work and causes intense stress. 

Japan's corporate culture places an emphasis on long-term relationships fostered by cooperation among different companies, developing an economy based on interrelated markets. Many Japanese companies allow each other to purchase stock in their business; as a result, firms work together because they have a vested interest in each other's success. For example, one third of the stocks traded on the Tokyo Stock Exchange are owned by a coalition of companies known as keiretsu. Kigyo Shudan, another example of cross company cooperation, is a coalition of industrial firms that own approximately half of the shares traded on the stock exchange. This friendly atmosphere not only encourages growth, but it also reduces risky behavior and trades, hostile takeovers, and corrupt deals. These safeguards prevents the economic health of the nation from being tied to a handful of competing companies.


Many critics have voiced concerns regarding the employee's working conditions. Employers are very demanding and have their workers work for a very longtime. This has not only led to several negative mental health phenomena (e.g., "death by overworking"), but also has led to several family groups speaking out against this practice.