Japan: The Fading Economy
Oct 9, 2026 · 13 min · 8 segments
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Oct 9, 2026 · 13 min · 8 segments
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It is a country ravaged by the greatest conflict in human history.
Its schools, its factories and its cities lie in ruins after years of relentless bombing by the allied forces during World War II.
This was not a great place to start one of the biggest economic booms in history, if not for a genius bit of forethought by the victorious allies.
The war had been won, and after two horrendous world wars, the countries involved were very eager to learn from their mistakes and prevent another war from breaking out.
To do this, they enacted a huge foreign aid scheme that saw infrastructure rebuilt, industries modernized and trade agreements established.
The idea was that a prosperous nation was less likely to foster the kind of resentment that saw the rise of aggressive nationalist leaders like Mussolini or Adolf Hitler, and also prevent the spread of communism.
But that was more presented as a happy little side effect to this otherwise generous foreign aid.
The occupation and reconstruction of Japan is not to be confused with the Marshall Plan, which was basically the same thing but just taking place in Europe.
In the 1960s, Japan was growing at a rate of 10% a year, which for a national economy was unheard of at the time.
This economic growth continued and Japan was able to ride the wave of globalization as the world's low-cost manufacturer.
Japan developed a huge car industry, it was at the forefront of consumer electronics, and was working meticulously to make sure that this newfound wealth was being invested wisely into infrastructure like high-speed rail, airports, and metro systems that would make their economy even more efficient.
In the late 1980s, it was estimated that the Imperial Palace, covering an area of just 3.4 square kilometers in central Tokyo, had a real estate land value greater than all of the real estate in California.
Of course the Imperial Palace was never actually for sale and this was just based on the cost per square foot of land in this area, but it still gave you a really good idea of just how much money was washing around in Japan.
They were at the forefront of a booming computer industry.
Their companies were becoming international brand names.
It was the place to visit as a tourist.
And then, in the early 90s, it all just stopped.
This still makes it a huge economy, the third largest in the world behind China and the USA.
It is a country ravaged by the greatest conflict in human history.
Its schools, its factories and its cities lie in ruins after years of relentless bombing by the allied forces during World War II.
This was not a great place to start one of the biggest economic booms in history, if not for a genius bit of forethought by the victorious allies.
The war had been won, and after two horrendous world wars, the countries involved were very eager to learn from their mistakes and prevent another war from breaking out.
To do this, they enacted a huge foreign aid scheme that saw infrastructure rebuilt, industries modernized and trade agreements established.
The idea was that a prosperous nation was less likely to foster the kind of resentment that saw the rise of aggressive nationalist leaders like Mussolini or Adolf Hitler, and also prevent the spread of communism.
But that was more presented as a happy little side effect to this otherwise generous foreign aid.
The occupation and reconstruction of Japan is not to be confused with the Marshall Plan, which was basically the same thing but just taking place in Europe.
In the 1960s, Japan was growing at a rate of 10% a year, which for a national economy was unheard of at the time.
This economic growth continued and Japan was able to ride the wave of globalization as the world's low-cost manufacturer.
Japan developed a huge car industry, it was at the forefront of consumer electronics, and was working meticulously to make sure that this newfound wealth was being invested wisely into infrastructure like high-speed rail, airports, and metro systems that would make their economy even more efficient.
In the late 1980s, it was estimated that the Imperial Palace, covering an area of just 3.4 square kilometers in central Tokyo, had a real estate land value greater than all of the real estate in California.
Of course the Imperial Palace was never actually for sale and this was just based on the cost per square foot of land in this area, but it still gave you a really good idea of just how much money was washing around in Japan.
They were at the forefront of a booming computer industry.
Their companies were becoming international brand names.
It was the place to visit as a tourist.
And then, in the early 90s, it all just stopped.
This still makes it a huge economy, the third largest in the world behind China and the USA.
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