ily to produce Japanese cars. Prestowitz (1988) notes the differences in approach between the U.S. and Japan, a difference that has spawned both misunderstandings and confrontations over trade issues in recent years:
The crux of the situation is that the United States and Japan have fundamentally different understandings of the purposes and workings of a national economy. While the United States embraces Adam Smith, the seventeenth-century prophet of free trade, and has concentrated on consumption as the main economic engine, Japan has focused on production and dominance of key industries that will enhance its strategic position. While the United States has encouraged and written into law adversarial relationships between business and government and labor and management, Japan has striven to achieve cooperation. (Prestowitz, 1988, p. 13)
This has become a source of some tension between the U.S. and Japan, with the U.S. seeing the Japanese government as offering excessively protectionist policies to Japanese industry and business by excluding competition. Japan rebuilt after the war by using techniques that continue to be used today, though adapted to the changed circumstances on the international economic scene. Foreign experts were hired to come to Japan and transfer the technology and skills they had developed. Japan negotiated trade treaties so that foreigners were prevented from doing business in the interior of the country. Japan also avoided foreign investment and sought the technology of the West not to be westernized but to maintain her autonomy and purity as a society. All such efforts were at the behest and under the guidance of the government authorities, and this was a key element in the way Japanese business culture developed. Growth was rapid so today Japan's capital industries have reached a level of technology comparable to that of the West (Prestowitz, 1988, 7-9).
One of the major reasons why many i...