Thirty Years’ Intellectual Crisis

Economic controversies during the Great Stagnation were fiercely fought, and these controversies involved a wide variety of people, from policymakers to academic and business economists, the media, and the general public. As I argue in Chapter 1, any crisis involves that in the existing knowledge and policies, and in the time of an economic crisis, competition emerges among economic ideas. The focus of the controversies changed considerably over time, yet one can discern the recurrence of several dominant ideas. According to Asahi Noguchi of Sensyu University, who meticulously surveyed economic controversies from the late 1980s to the early 1990s, “Upon reviewing the policy discussions during the Great Stagnation, what strikes me is the fact that the same pattern of disagreements has emerged over and over again in a different context” (Noguchi 2005–2006, first installment, 35; Noguchi 2014). That same pattern is the conflict between two contending views of the economy, the structural view versus the macroeconomic view. The structural view seeks out the “deeper” causes of the Great Stagnation, whereas the macroeconomic view considers macroeconomic policy failures as the causes of the Great Stagnation. The structural view further identifies these “deeper” causes with the economic and legal structure of the Japanese economic system, although the precise meaning of the system tends to be elusive.