The rise of Japan, like the phoenix bird from the ashes of total destruction to highly prosperous economy at present is a big surprise to external world. No country was ever able to achieve such rapid progress after such a big humiliation from a war. In fact, Japan has presented the external world another school of economics, the Japan model similar to the Marxist model and Keynesian model. Rixtel has argued that the topic of who is responsible for Japan’s economic progress since the Second World War is highly debatable. While on one side, market schools denied the government’s contributions, on the other side, the government controlled schools argue that Japan’s progress was mainly due to the economic policies of the government. Even though Japan has progressed a lot since the Second World War, its economic progress has slowed down a bit for the last two decades. China and India like Asian countries were progressed a lot and they escaped from the current financial crisis whereas Japan was not able to do so. This paper is written as a debate with respect to the political economy of Japan during the post-war era.
Japan has cleverly adopted a strategy during the post war in which they relied US for their security while concentrating on the economic growth alone. This strategy helped them to reduce their expenditure on defense and helped them to concentrate fully on the rebuilding process of the country. Japan has tried a dual strategy in their foreign policy towards United States which affected them in the long run. At one side they have given US the responsibility of protecting Japan from external threats. On the other side Japan tried to exploit the opportunities in US.