U.S. President-elect Joe Biden can learn a lot from Japan.
I say this not because Japan-style capitalism does not have its share of problems, but because the overall result generated by the Japanese economic system is extremely positive. Japan is the global best-in-class for balancing both income growth and income distribution. The result is not just extraordinary socioeconomic stability, but also strong resilience against the temptations of divisive populism — a la Donald Trump.
Creating and sustaining a stable society is one of the fundamental goals of economic policymaking. For this, an economy must both grow and distribute the spoils of wealth creation in a fair and equitable way. So what’s the score? How wealthy are the people and how is that wealth distributed? At the end of last year, the median net financial wealth — all financial assets minus liabilities — for households in Japan stood at $104,000. In the United States, it was $62,000.