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By John Gray

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For that and many other reasons, it cannot be replicated anywhere else in Europe. For different reasons, Japanese market institutions are no less of a singularity. The social contract in contemporary Japan, far from being immemorial, emerged from the intense industrial and political conflicts of the immediate post-war period. It has succeeded in keeping unemployment levels uniquely low by subsidising employment practices that are ‘economically inefficient’. It is highly probable, and no less desirable, that Japan will resist the importation of Western, and more particularly American, employment policies, even if the current forms of lifelong job-holding must of necessity be modified.

This does not mean that we cannot make Demos This page is covered by the Demos open access licence. Some rights reserved. uk/openaccess 47 After social democracy: politics, capitalism and the common life 9. 10. 11. 12. 13. 48 useful borrowings and adaptations from other economic cultures, as Will Hutton has argued in his important and illuminating book. , 1995, The trap and the response, London, Macmillan. H. ’. , 1993, Beyond the New Right, London and New York, Routledge; 76–92. , 1986, The morality of freedom, Oxford, Clarendon Press.

This may be true. But as The Economist recognises elsewhere in the same article, the effect of global integration has been to alter the consequences of using these powers, and thereby to impose new constraints on their uses. It can be argued that the impact of economic globalisation (in its various manifestations) on the macroeconomic policies of sovereign states has been exaggerated; it is silly to suggest that the costs of certain policy options have not greatly increased as a consequence of globalisation, increased so much indeed, as to remove them from the political agenda.

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