Overview
Imagine the IRS, the SEC, the Fed, and the U.S. Treasury all rolled into one agency, so that the resulting bureaucracy could do whatever it wanted, reporting to no higher authority.It's the stuff of Orwell in the U.S. but it's reality in Japan -- in the form of the Ministry of Finance, Japan's almighty Okurasho. This book is the first account in English of Japan's Ministry of Finance, the most powerful and the least scrutinized ministry in Japan, obscured until now by its cousin, the Ministry of International Trade and Industry. Hartcher exposes the Ministry as a network of good old boys who met in the elite Tokyo University Law School, and who've had very little financial or economic training, if any. What's more, the Ministry has the power to install its own members into key leadership positions throughout Japan's business world, thereby controlling most of the country's largest corporations, banks, and financial institutions. Any manager, investor, or regulator who deals with Japan should read this book.
An analysis of how abuses of power by Japan's Ministry of Finance could harm world markets.
Synopsis
An analysis of how abuses of power by Japan's Ministry of Finance could harm world markets.
Publishers Weekly
In some ways January's biggest scandal was on the business page. Two officials from Japan's powerful Ministry of Finance were arrested on the charge of taking payoffs. The finance minister and vice finance minister resigned, another bureaucrat killed himself, and some reports fingered the MoF in the collapse of the century-old Yamaichi Securities. And as the final indignity, an outsider was chosen to head what had been an old boys club since WWII. Although Hartcher's book was finished before this wave of scandals was reported, it as good as predicts them. Hartcher, Asia-Pacific editor for the Australian Financial Review, describes how the MoF, created to support the war and postwar rebuilding, outlived its purpose and fostered the bubble economy of the late 1980s and the subsequent bank crisis that almost crushed the miracle it helped create. By the 1970s, three of the MoF's most cherished tenets no longer heldits absolute unwillingness to resort to fiscal supports; its insistence that no bank be allowed to fail; its general lack of faith in free-market forces. The MoF was further hampered by simple self interest: supporting protectionist measures in order to maintain the ruling Liberal Democrats' electoral base; and maintaining weak institutions that served as cushy outplacement positions for senior MoF bureaucrats. It's not quite Den of Thievesaside from the incomplete example of ultimate bubble businessman, Haurnori Takahashi, the book lacks a human facebut it's filled with fascinating details and explanations that shine a needed light on Pacific Rim economics and into the fastness of the MoF. (Mar.) FYI: Hartcher will comment on recent events in an online postscript. The URL is www.hbsp.harvard.edu/the_ministry and will be posted March 18.
Editorials
Publishers Weekly -
In some ways January's biggest scandal was on the business page. Two officials from Japan's powerful Ministry of Finance were arrested on the charge of taking payoffs. The finance minister and vice finance minister resigned, another bureaucrat killed himself, and some reports fingered the MoF in the collapse of the century-old Yamaichi Securities. And as the final indignity, an outsider was chosen to head what had been an old boys club since WWII. Although Hartcher's book was finished before this wave of scandals was reported, it as good as predicts them. Hartcher, Asia-Pacific editor for the Australian Financial Review, describes how the MoF, created to support the war and postwar rebuilding, outlived its purpose and fostered the bubble economy of the late 1980s and the subsequent bank crisis that almost crushed the miracle it helped create. By the 1970s, three of the MoF's most cherished tenets no longer heldits absolute unwillingness to resort to fiscal supports; its insistence that no bank be allowed to fail; its general lack of faith in free-market forces. The MoF was further hampered by simple self interest: supporting protectionist measures in order to maintain the ruling Liberal Democrats' electoral base; and maintaining weak institutions that served as cushy outplacement positions for senior MoF bureaucrats. It's not quite Den of Thievesaside from the incomplete example of ultimate bubble businessman, Haurnori Takahashi, the book lacks a human facebut it's filled with fascinating details and explanations that shine a needed light on Pacific Rim economics and into the fastness of the MoF. (Mar.) FYI: Hartcher will comment on recent events in an online postscript. The URL is www.hbsp.harvard.edu/the_ministry and will be posted March 18.Richard J. Samuels
A sober presentation of how Japan's elite Ministry of Finance bureaucrats bungled management of the world's second-largest economy....It builds momentum through its often stunning accounts of betrayal of the public trust to become a searing indictment of Japanese bureaucrats lost in deep denial.--Richard J. Samuels, New York Times Book Review